Compromise in the works for bill restricting schools use of long-term bonds

Stakeholders battling over legislation that would restrict schools from using long-term bonds appeared Wednesday to find compromise on amendments that would make the bill more palatable to districts.

The Senate's education committee decided to delay further action until next week, giving Assemblywoman Joan Buchanan, D-Alamo, time to consider proposed changes to AB 182.

Meanwhile, the panel moved several other key education bills including one that would rewrite the rules implementing sanctions against school officials who fail to report changes in an employee's work status while an allegation of misconduct is pending.

Interest in regulating schools' access to long-term, high interest bonds was sparked last fall on the cusp of the November election and the all-important tax hike for schools. Press reports attracted statewide attention to $105 million in borrowing assumed by Poway Unified using capital appreciation bonds that will eventually cost taxpayers close to $1 billion.

Currently, districts have authority to issue bonds under various sections of both the Education Code and the Government Code. But in attempting to tighten up regulations around CABs, Buchanan proposed limiting schools' bond finance options to the more restrictive Education Code.

I think the issue that we're trying to deal with right now is do we try and streamline it so it's clear that schools issue under the Education Code, period, or do we have a dual track system where they can issue under either the Education Code or the Government Code," Buchanan told education panel members.

Critics of the use of CABs as a financing option have also pointed out that their issuance has increased since the downturn in the housing market as schools have struggled to keep up with facilities needs despite a drop-off in state support.

Testifying on Wednesday, state treasurer Bill Lockyer called CABs "foolish policy" and said they should be banned as a borrowing tool for public education. San Diego Treasurer-Tax Collector Dan McAllister said CABs come from "the unscrupulous side of the financial world" and create "unwarranted tax burdens" on community college and K-12 districts.

But education groups including the California Association of School Business Officials, the Association of California School Administrators, the California School Boards Association, California's Coalition for Adequate School Housing and the community college Association of Chief Business Officials lined up to argue that while they support some regulations on capital appreciation bonds, to outlaw them or reduce a district's borrowing options can restrict their ability to maintain or build adequate school facilities.

Also moving Wednesday was Assemblyman Al Muratsuchi's AB 449, which specifies that failure to report changes in the employment status of an individual facing misconduct charges constitutes unprofessional conduct and could subject the school administrator to adverse action by the Commission on Teacher Credentialing, as well as criminal penalties of between $500 and $1,000.

In addition, AB 449 makes it clear that a change in employment status due to unsatisfactory performance or a reduction in workforce is not an allegation of misconduct for review by the CTC.

Other bills moved by the Senate education committee included:

AB 308 by Assemblyman Curt Hagman, R-Chino Hills, which would authorize the State Allocation Board to establish a program to require a school district, county office of education or a charter school to return funding received under the state's School Facility Program if it sells or leases real property purchased, modernized or constructed with those funds.

Conditions established under the bill include that the money must be returned unless:

  • The property is sold or leased to a charter school, a school district, a county office of education or an agency that will use the property exclusively for the delivery of child care and development services, pursuant to existing provisions governing the sale or lease of surplus property

  • The proceeds from the sale or lease of the property are used for capital outlay
AB 514 by Assemblyman Rob Bonta, D-Alameda, would expand the existing list of resources the Superintendent of Public Instruction is required to post on his/her website to include resources for youth who have been affected by gangs, gun violence, and psychological trauma caused by violence at home and at school.

AB 626 by Assemblywoman Nancy Skinner, D-Berkeley, would make numerous changes to state school nutrition standards to conform with the federal Healthy and Hunger Free Kids Act of 2010 and implements recommendations of a Senate report relative to use of cafeteria funds.

The bill would ban or limit the sale of certain items and types of foods to certain times of the day.

AB 700 by Assemblyman Jimmy Gomez, D-Los Angeles, would establish voter education curriculum for pupil instruction. more