(a) Notwithstanding any other provision of this code, the
acceptance by a school district of an apportionment made pursuant to
Section 41320 that exceeds an amount equal to 200 percent of the
amount of the reserve recommended for that school district under the
standards and criteria adopted pursuant to Section 33127 constitutes
the agreement by the school district to the conditions set forth in
this article. Before applying for an emergency apportionment in the
amount identified in this subdivision, the governing board of a
school district shall discuss the need for that apportionment at a
regular or special meeting of the governing board of the school
district and, at that meeting, shall receive testimony regarding the
apportionment from parents, exclusive representatives of employees of
the school district, and other members of the community. For
purposes of this article, "qualifying school district" means a school
district that accepts a loan as described in this subdivision.
(b) The Superintendent shall assume all the legal rights, duties,
and powers of the governing board of a qualifying school district.
The Superintendent, in consultation with the county superintendent of
schools, shall appoint an administrator to act on his or her behalf
in exercising the authority described in this subdivision in
accordance with all of the following:
(1) The administrator shall serve under the direction and
supervision of the Superintendent until terminated by the
Superintendent at his or her discretion. The Superintendent shall
consult with the county superintendent of schools before terminating
the administrator.
(2) The administrator shall have recognized expertise in
management and finance.
(3) To facilitate the appointment of the administrator and the
employment of necessary staff, for purposes of this section, the
Superintendent is exempt from the requirements of Article 6
(commencing with Section 999) of Chapter 6 of Division 4 of the
Military and Veterans Code and Part 2 (commencing with Section 10100)
of Division 2 of the Public Contract Code.
(4) Notwithstanding any other law, the Superintendent may appoint
an employee of the state or the office of the county superintendent
of schools to act as administrator for up to the duration of the
administratorship. During the tenure of his or her appointment, the
administrator, if he or she is an employee of the state or the office
of the county superintendent of schools, is an employee of the
qualifying school district, but shall remain in the same retirement
system under the same plan that has been provided by his or her
employment with the state or the office of the county superintendent
of schools. Upon the expiration or termination of the appointment,
the employee shall have the right to return to his or her former
position, or to a position at substantially the same level as that
position, with the state or the office of the county superintendent
of schools. The time served in the appointment shall be counted for
all purposes as if the administrator had served that time in his or
her former position with the state or the office of the county
superintendent of schools.
(5) Except for an individual appointed as an administrator by the
Superintendent pursuant to paragraph (4), the administrator shall be
a member of the State Teachers' Retirement System, if qualified, for
the period of service as administrator, unless he or she elects in
writing not to become a member. A person who is a member or retirant
of the State Teachers' Retirement System at the time of appointment
shall continue to be a member or retirant of the system for the
duration of the appointment. If the administrator chooses to become a
member or is already a member, the administrator shall be placed on
the payroll of the qualifying school district for purposes of
providing appropriate contributions to the system. The Superintendent
may also require the administrator to be placed on the payroll of
the qualifying school district for purposes of remuneration, other
benefits, and payroll deductions.
(6) For purposes of workers' compensation benefits, the
administrator is an employee of the qualifying school district,
except that an administrator appointed pursuant to paragraph (4) may
be deemed an employee of the state or office of the county
superintendent of schools, as applicable.
(7) The qualifying school district shall add the administrator as
a covered employee of the qualifying school district for all purposes
of errors and omissions liability insurance policies.
(8) The salary and benefits of the administrator shall be
established by the Superintendent and paid by the qualifying school
district.
(9) The Superintendent or the administrator may employ, on a
short-term basis and at the expense of the qualifying school
district, any staff necessary to assist the administrator, including,
but not limited to, a certified public accountant.
(10) The administrator may do all of the following:
(A) Implement substantial changes in the fiscal policies and
practices of the qualifying school district, including, if necessary,
the filing of a petition under Chapter 9 (commencing with Section
901) of Title 11 of the United States Code for the adjustment of
indebtedness.
(B) Revise the educational program of the qualifying school
district to reflect realistic income projections and pupil
performance relative to state standards.
(C) Encourage all members of the school community to accept a fair
share of the burden of the fiscal recovery of the qualifying school
district.
(D) Consult, for the purposes described in this subdivision, with
the governing board of the qualifying school district, the exclusive
representatives of the employees of the qualifying school district,
parents, and the community.
(E) Consult with, and seek recommendations from, the
Superintendent, the county superintendent of schools, and the County
Office Fiscal Crisis and Management Assistance Team authorized
pursuant to subdivision (c) of Section 42127.8 for purposes described
in this article.
(F) With the approval of the Superintendent, enter into agreements
on behalf of the qualifying school district and, subject to any
contractual obligation of the qualifying school district, change
existing school district rules, regulations, policies, or practices
as necessary for the effective implementation of the recovery plans
referred to in Sections 41327 and 41327.1.
(G) Request the advice and assistance of the California
Collaborative for Educational Excellence pursuant to paragraph (1) of
subdivision (f) of Section 52074.
(c) (1) Except as provided for in paragraph (2), the period of
time during which the Superintendent exercises the authority
described in subdivision (b), the governing board of the qualifying
school district shall serve as an advisory body reporting to the
state-appointed administrator, and has no rights, duties, or powers,
and is not entitled to any stipend, benefits, or other compensation
from the qualifying school district.
(2) (A) After one complete fiscal year has elapsed following the
qualifying school district's acceptance of an emergency
apportionment, the governing board of the qualifying school district
may conduct an annual advisory evaluation of an administrator for the
duration of the administratorship.
(B) An advisory evaluation of an administrator shall focus on the
administrator's effectiveness in leading the qualifying school
district toward fiscal recovery and improved academic achievement.
Advisory evaluation criteria shall be agreed upon by the governing
board of the qualifying school district and the administrator before
the advisory evaluation. The advisory evaluation shall include, but
not be limited to, all of the following:
(i) Goals and standards consistent with Section 41327.1.
(ii) Commendations in the areas of the administrator's strengths
and achievements.
(iii) Recommendations for improving the administrator's
effectiveness in areas of concern and unsatisfactory performance.
(C) An advisory evaluation of an administrator conducted by the
governing board of a qualifying school district shall be submitted to
the Governor, the Legislature, the Superintendent, and the County
Office Fiscal Crisis and Management Assistance Team.
(3) Upon the appointment of an administrator pursuant to this
section, the district superintendent is no longer an employee of the
qualifying school district.
(4) A determination of the severance compensation for the district
superintendent shall be made pursuant to subdivision (j).
(d) Notwithstanding Section 35031 or any other law, the
administrator, after according the affected employee reasonable
notice and the opportunity for a hearing, may terminate the
employment of a deputy, associate, assistant superintendent, or other
school district level administrator who is employed by a qualifying
school district under a contract of employment signed or renewed
after January 1, 1992, if the employee fails to document, to the
satisfaction of the administrator, that before the date of the
acceptance of the emergency apportionment he or she either advised
the governing board of the qualifying school district, or his or her
superior, that actions contemplated or taken by the governing board
of the qualifying school district could result in the fiscal
insolvency of the qualifying school district, or took other
appropriate action to avert that fiscal insolvency.
(e) The authority of the Superintendent, and the administrator,
under this section shall continue until all of the following occur:
(1) (A) After one complete fiscal year has elapsed following the
qualifying school district's acceptance of an emergency apportionment
as described in subdivision (a), the administrator determines, and
so notifies the Superintendent and the county superintendent of
schools, that future compliance by the qualifying school district
with the recovery plans approved pursuant to paragraph (2) is
probable.
(B) The Superintendent may return power to the governing board of
the qualifying school district for an area listed in subdivision (a)
of Section 41327.1 if performance under the recovery plan for that
area has been demonstrated to the satisfaction of the Superintendent.
(2) The Superintendent has approved all of the recovery plans
referred to in subdivision (a) of Section 41327 and the County Office
Fiscal Crisis and Management Assistance Team completes the
improvement plans specified in Section 41327.1 and has completed a
minimum of two reports identifying the qualifying school district's
progress in implementing the improvement plans.
(3) The administrator certifies that all necessary collective
bargaining agreements have been negotiated and ratified, and that the
agreements are consistent with the terms of the recovery plans.
(4) The qualifying school district has completed all reports
required by the Superintendent and the administrator.
(5) The Superintendent determines that future compliance by the
qualifying school district with the recovery plans approved pursuant
to paragraph (2) is probable.
(f) When the conditions stated in subdivision (e) have been met,
and at least 60 days after the Superintendent has notified the
Legislature, the Department of Finance, the Controller, and the
county superintendent of schools that he or she expects the
conditions prescribed pursuant to this section to be met, the
governing board of the qualifying school district shall regain all of
its legal rights, duties, and powers, except for the powers held by
the trustee provided for pursuant to Article 2 (commencing with
Section 41320). The Superintendent shall appoint a trustee under
Section 41320.1 to monitor and review the operations of the
qualifying school district until the conditions of subdivision (b) of
that section have been met.
(g) Notwithstanding subdivision (f), if the qualifying school
district violates a provision of the recovery plans approved by the
Superintendent pursuant to this article within five years after the
trustee appointed pursuant to Section 41320.1 is removed or after the
emergency apportionment is repaid, whichever occurs later, or the
improvement plans specified in Section 41327.1 during the period of
the trustee's appointment, the Superintendent may reassume, either
directly or through an administrator appointed in accordance with
this section, all of the legal rights, duties, and powers of the
governing board of the qualifying school district. The Superintendent
shall return to the governing board of the qualifying school
district all of its legal rights, duties, and powers reassumed under
this subdivision when he or she determines that future compliance
with the approved recovery plans is probable, or after a period of
one year, whichever occurs later.
(h) Article 2 (commencing with Section 41320) shall apply except
as otherwise specified in this article.
(i) It is the intent of the Legislature that the legislative
budget subcommittees annually conduct a review of each qualifying
school district that includes an evaluation of the financial
condition of the qualifying school district, the impact of the
recovery plans upon the qualifying school district's educational
program, and the efforts made by the state-appointed administrator to
obtain input from the community and the governing board of the
qualifying school district.
(j) (1) The district superintendent is entitled to a due process
hearing for purposes of determining final compensation. The final
compensation of the district superintendent shall be between zero and
six times his or her monthly salary. The outcome of the due process
hearing shall be reported to the Superintendent and the public. The
information provided to the public shall explain the rationale for
the compensation.
(2) This subdivision applies only to a contract for employment
negotiated on or after June 21, 2004.
(k) (1) When the Superintendent assumes control over a qualifying
school district pursuant to subdivision (b), he or she shall, in
consultation with the County Office Fiscal Crisis and Management
Assistance Team, review the fiscal oversight of the qualifying school
district by the county superintendent of schools. The Superintendent
may consult with other fiscal experts, including other county
superintendents of schools and regional fiscal teams, in conducting
this review.
(2) Within three months of assuming control over a qualifying
school district, the Superintendent shall report his or her findings
to the Legislature and shall provide a copy of that report to the
Department of Finance. This report shall include findings as to
fiscal oversight actions that were or were not taken and may include
recommendations as to an appropriate legislative response to improve
fiscal oversight.
(3) If, after performing the duties described in paragraphs (1)
and (2), the Superintendent determines that the county superintendent
of schools failed to carry out his or her responsibilities for
fiscal oversight as required by this code, the Superintendent may
exercise the authority of the county superintendent of schools who
has oversight responsibilities for a qualifying school district. If
the Superintendent finds, based on the report required in paragraph
(2), that the county superintendent of schools failed to
appropriately take into account particular types of indicators of
financial distress, or failed to take appropriate remedial actions in
the qualifying school district, the Superintendent shall further
investigate whether the county superintendent of schools failed to
take into account those indicators, or similarly failed to take
appropriate actions in other school districts with negative or
qualified certifications, and shall provide an additional report on
the fiscal oversight practices of the county superintendent of
schools to the appropriate policy and fiscal committees of each house
of the Legislature and the Department of Finance.
(a) In accordance with timelines, instructions, and a format
established by the Superintendent of Public Instruction, the
state-appointed administrator shall prepare or obtain the following
reports and plans:
(1) A management review and recovery plan.
(2) A multiyear financial recovery plan. The multiyear financial
recovery plan shall include a plan, to be submitted annually on or
before July 1, to repay to the state any and all loans owed by the
district.
(3) During the period of service by the state-appointed
administrator, an annual report on the financial condition of the
district, including, but not necessarily limited to, all of the
following information:
(A) Specific actions taken to reduce district expenditures or
increase income to the district, and the amount of the resulting cost
savings and increases in income.
(B) A copy of the adopted district budget for the current fiscal
year.
(C) The amount of the district budgetary reserve.
(D) The status of employee contracts.
(E) Any obstacles to the implementation of the recovery plans
described in paragraphs (1) and (2).
(b) Each of the reports or plans required under this section, or
under any other law that requires the district to prepare reports or
plans, shall be submitted to the Superintendent of Public Instruction
for approval, after his or her consideration of comments and
recommendations of the county superintendent of schools. The
Superintendent of Public Instruction may accept and approve, for the
purposes of this section, any reports or plans that were prepared by
or for the district prior to the district's acceptance of a loan as
described in subdivision (a) of Section 41326.
(c) With the approval of the Superintendent of Public Instruction,
the state-appointed administrator may enter into agreements on
behalf of the district and, subject to any contractual obligation of
the district, change any existing district rules, regulations,
policies, or practices as necessary for the effective implementation
of the recovery plans referred to in subdivision (a).
(a) The state board shall adopt and may periodically
update by regulation a comprehensive list of professional and legal
standards that all districts are encouraged to use as a guide to
conduct a good educational program and fiscal and management
practices that shall be used as the basis of evaluating the
improvement of qualifying districts pursuant to this article. These
standards shall, at a minimum, address all of the following areas:
(1) Financial management.
(2) Pupil achievement.
(3) Personnel management.
(4) Facilities management.
(5) Community relations.
(b) If an administrator is appointed pursuant to Section 41326,
the County Office Fiscal Crisis and Management Assistance Team
established pursuant to Section 42127.8 shall conduct comprehensive
assessments in the five areas specified in subdivision (a).
(c) After the assessments specified in subdivision (b) are
completed, the Superintendent, in consultation with the County Office
Fiscal Crisis and Management Assistance Team and the county
superintendent of schools, shall determine, based upon the district's
particular needs and circumstances, the level of improvement needed
in the standards adopted pursuant to subdivision (a) before local
authority will be returned pursuant to subdivision (f) of Section
41326. Based upon this determination, the County Office Fiscal Crisis
and Management Assistance Team shall complete improvement plans in
the five areas specified in subdivision (a) that focus on the agreed
upon standards, and that are consistent with the financial
improvement plan.
(d) Beginning six months after an emergency loan is approved, and
every six months thereafter until local authority is returned
pursuant to subdivision (f) of Section 41326, the County Office
Fiscal Crisis and Management Assistance Team shall file a written
status report with the appropriate fiscal and policy committees of
the Legislature, the Members of the Legislature that represent the
qualifying district, any advisory council of the school district, the
Superintendent, the county superintendent of schools, and the
Director of Finance. The reports shall indicate the progress that the
district is making in meeting the recommendations of the improvement
plans developed pursuant to this section.
(e) If the County Office Fiscal Crisis and Management Assistance
Team indicates in writing that it has insufficient resources to
complete the comprehensive assessments, improvement plans, and
progress reports required pursuant to this section, the department
shall request proposals to complete these tasks, and subject to the
approval of the Department of Finance, select an entity to complete
the tasks assigned to the County Office Fiscal Crisis and Management
Assistance Team pursuant to this section.