BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 215|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
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THIRD READING
Bill No: AB 215
Author: Alejo (D)
Amended: 6/2/15 in Assembly
Vote: 21
SENATE EDUCATION COMMITTEE: 8-0, 7/8/15
AYES: Liu, Runner, Block, Hancock, Leyva, Monning, Pan, Vidak
NO VOTE RECORDED: Mendoza
ASSEMBLY FLOOR: 78-2, 6/4/15 - See last page for vote
SUBJECT: Local agency employment contracts: maximum cash
settlement
SOURCE: Author
DIGEST: This bill reduces the maximum cash settlement that may
be paid to a school district superintendent upon termination
from 18 times of that employee's monthly salary to 12 times of
that employee's monthly salary. This bill also prohibits a cash
settlement 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.
ANALYSIS:
Existing law:
1)Permits, if the contract with a school district superintendent
is terminated, a cash settlement equal to the monthly salary
of the superintendent multiplied by the number of months left
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on the unexpired term of the contract up to a maximum of 18
months.
2)Permits a cash settlement of up to six months times the
monthly salary in the case of a superintendent who is
terminated because the school district believes and
subsequently confirms through an independent audit that the
superintendent has engaged in fraud, misappropriation of
funds, or other illegal fiscal practices.
This bill:
1)Reduces the maximum cash settlement that a local agency
employer can provide to a district superintendent upon
termination from 18 months of that employee's monthly salary
to 12 months of that employee's salary.
2)Prohibits a local agency employer from providing a cash or
noncash settlement to a superintendent upon termination if the
local agency believes, and subsequently confirms, pursuant to
an independent audit, that the superintendent has engaged in
fraud, misappropriation of funds, or other illegal fiscal
practices. This provision applies only to a contract for
employment executed on or after January 1, 2016.
Comments
According to the California Department of Education, the average
annual salaries for unified school district superintendents, by
district size, in 2012-13, is as follows:
1)$116,606 for districts with less than 1,500 average daily
attendance (ADA);
2)$151,912 for districts with 1,500 to 4,999 ADA;
3)$183,557 for districts with 5,000 to 9,999 ADA;
4)$206,292 for districts with 10,000 to 19,999 ADA; and
5)$227,183 for districts with more than 20,000 ADA.
The author's office indicates that the highest salaries range
from $265,773 to $322,159, which would translate to a range in
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cash settlements from $398,660 to $483,239 under existing law.
Some settlements have generated public scrutiny. In one
instance, a school district put its superintendent on a paid
leave of absence for six months and then provided an 18-month
cash settlement, essentially providing a 24 month "buy-out" at a
cost of approximately $325,000.
Unintended consequences. While the purpose of this bill is to
save money for students by placing a cap on school district
superintendents' severance pay, it could have several unintended
consequences. First, by reducing and/or eliminating some of the
"protections" in place for superintendents in existing law, this
bill could provide potential disincentives for highly-qualified
candidates to become a superintendent. This could also affect
the school district's recruitment efforts and its ability to
hire a quality superintendent.
Further, this bill could increase superintendent turnover by
reducing the penalty districts pay for terminations prior to the
fulfillment of a contract. While this bill reduces the cost of
a cash settlement in which there is more than 12 months
remaining on a contract, it is not clear that it will
necessarily reduce the cost of cash settlements overall. For
example, to the extent that the relatively high cost of a
settlement serves as a disincentive to terminate a contract,
reducing the cost of a settlement could have the opposite effect
and increase terminations. This would then increase the cost of
such settlements.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:NoLocal: No
SUPPORT: (Verified7/9/15)
None received
OPPOSITION: (Verified7/9/15)
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Association of California School Administrators
California School Boards Association
Small School Districts' Association
ARGUMENTS IN SUPPORT: According to the author's office, "the
combination of high paying salaries and high superintendent
turnover is a costly issue. 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: The Association of California School
Administrators (ASCA) indicates that this bill "unfairly singles
out school superintendents (arguably the most visible local
official) and reduces the Early Termination Clause for a breach
of contract to up to 12 months. Claiming that Early Termination
Clauses occur more frequently with school superintendents can in
part be attributed to the number of school districts (1,000)
nearly twice the total number of cities (482) and counties (58)
combined." ACSA further argues that superintendents are at-will
employees, who have no due process rights and can be terminated
any time with cause. When a superintendent is released from his
or her duties, it can be difficult to find another
superintendent's job and the release is often career ending.
"Early Termination Clauses are not considered extra pay nor are
they a gift of public funds." Rather, cash settlements are
"damages paid to an employee who is released by breach of
contract."
ASSEMBLY FLOOR: 78-2, 6/4/15
AYES: Achadjian, Alejo, Travis Allen, Baker, Bigelow, Bloom,
Bonilla, Bonta, Brough, Brown, Burke, Calderon, Campos, Chang,
Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dahle, Daly, Dodd,
Eggman, Frazier, Beth Gaines, Gallagher, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Grove, Hadley, Harper, Roger Hernández, Holden, Irwin, Jones,
Jones-Sawyer, Kim, Lackey, Linder, Lopez, Low, Maienschein,
Mathis, Mayes, McCarty, Medina, Melendez, Mullin, Nazarian,
Obernolte, O'Donnell, Olsen, Patterson, Perea, Quirk, Rendon,
Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Wagner, Waldron, Weber, Wilk, Williams,
Wood, Atkins
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NOES: Chávez, Levine
Prepared by:Lenin Del Castillo / ED. / (916) 651-4105
7/10/15 14:06:10
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