BILL ANALYSIS Ó AB 215 Page 1 ASSEMBLY THIRD READING AB 215 (Alejo) As Amended May 4, 2015 Majority vote ------------------------------------------------------------------- |Committee |Votes |Ayes |Noes | | | | | | | | | | | |----------------+------+---------------------+---------------------| |Education |6-1 |O'Donnell, Kim, |Chávez | | | |McCarty, Santiago, | | | | |Thurmond, Weber | | | | | | | | | | | | ------------------------------------------------------------------- SUMMARY: Reduces the maximum cash settlement that may be paid to a school district superintendent in the case of terminations of employment. Specifically for contracts of employment negotiated on or after January 1, 2016. Specifically, this bill: 1)Reduces the maximum cash settlement that may be paid to a school district superintendent from 18 times the monthly salary to 12 times the monthly salary, unless the superintendent was dismissed for cause, in which case the maximum cash settlement is six times the monthly salary. AB 215 Page 2 2)Reduces the maximum cash settlement that may be paid to a school district superintendent in the case of a termination in which the school district believes and subsequently confirms that the superintendent has engaged in fraud, misappropriation of funds, or other illegal fiscal practices from six times the monthly salary to three times the monthly salary. FISCAL EFFECT: Unknown. This bill is keyed non-fiscal by the Legislative Counsel. COMMENTS: This bill reduces from 18 times the monthly salary to 12 times the monthly salary the maximum cash settlement that may be paid to a school district superintendent whose employment has been terminated. In the case of a termination in which the school district believes and subsequently confirms that the superintendent has engaged in fraud, misappropriation of funds, or other illegal fiscal practices, this bill reduces the maximum cash settlement from six times the monthly salary to three times the monthly salary. In no case can the amount of the cash settlement exceed the number of unexpired months on the contract. According to the California Department of Education (CDE) the average annual salaries for unified school district superintendents, by district size, in 2012-13 as follows: 1)One hundred sixteen thousand six hundred six dollars for districts with less than 1,500 average daily attendance (ADA); 2)One hundred fifty-one thousand nine hundred twelve dollars for districts with 1,500 to 4,999 ADA; 3)One hundred eighty-three thousand five hundred fifty-seven dollars for districts with 5,000 to 9,999 ADA; AB 215 Page 3 4)Two hundred six thousand two hundred ninety-two dollars for districts with 10,000 to 19,999 ADA; and 5)Two hundred twenty-seven thousand one hundred eighty-three dollars for districts with more than 20,000 ADA. There is considerable variance around these averages. Information provided by the author's office shows that the highest salaries range from $265,773 to $322,159. With salaries in this range, the maximum cash settlement could range from $398,660 to $483,239 under existing law. Arguments in support. The author's office argues that, "by placing a cap on district superintendent's severance pay, we can save money for students, begin to improve our school administrative processes, and demonstrate fiscal discipline in the administration of taxpayer dollars." Arguments in opposition. Opponents argue that superintendents are at-will employees, who have no due process rights and can be terminated any time without cause. This action can end the career of a superintendent. Rather than being extra pay or a gift of public funds, cash settlements are damages paid to a superintendent "who is released by breach of contact." Analysis Prepared by: Rick Pratt / ED. / (916) 319-2087 FN: 0000458 AB 215 Page 4