Supreme Court Decision Eliminates Redevelopment Agencies: What Is The Impact On School Funding?

January 2012
Number 06

In connection with approval of the state budget for fiscal year 2011-2012, the California Legislature enacted two bills addressing redevelopment agencies. ABX1 26 suspended all redevelopment activities and scheduled dissolution of redevelopment agencies.  ABX1 27 would have allowed redevelopment agencies to remain in existence by agreeing to pay an amount set by formula to their county auditor-controllers for distribution to other taxing entities, including schools. ABX1 26 and ABX1 27 went into effect on June 29, 2011. A lawsuit was filed in the California Supreme Court on July 18, 2011 (California Redevelopment Association, et al. v. Ana Matosantos, et al ., Case No. 5194861), challenging the constitutionality of ABX1 26 and ABX1 27 on behalf of cities, counties and redevelopment agencies, and requesting a stay of enforcement.

On December 29, 2011, the Supreme Court issued a decision in Matosantos that ABX126, which dissolves redevelopment agencies, is valid, but that ABX1 27, which gave redevelopment agencies the option of making a payment in order to remain in existence, is invalid. As a result of this decision, and unless other pending litigation or legislative action changes the course of this matter, all redevelopment agencies will be dissolved effective February 1, 2012.

As of that date, all assets of each former redevelopment agency will be transferred to the control of a “successor agency” which will carry out the enforceable obligations and wind down the activities of the former redevelopment agency. In most cases, the successor agency will be the city or the county that created the redevelopment agency. The actions of each successor agency will be subject to review by a seven-member local Oversight Board which will be formed by May 1, 2012. Each Oversight Board will include, as a representative of local school districts, a member appointed by the county superintendent of schools, if the superintendent is elected, or by the county office of education, if the county superintendent is appointed.

The Governor targeted the elimination of redevelopment agencies in part to redirect some property tax revenues to school districts. School districts are now waiting to see what impact the Matosantos decision will have on the state budget for 2012-2013.

It appears that revenues previously allocated by redevelopment agencies to school districts will continue to be received by those districts. Property tax revenues formerly collected by each now-defunct redevelopment agency will be collected in a trust fund within each county treasury and administered by that county’s auditor-controller, who will distribute the moneys in that fund according to the following priorities. First, the county auditor-controller will continue to make statutory passthrough payments to school districts, as required by the reforms enacted by AB 1290 in 1993. After these payments are made, the county auditor-controller will allocate moneys in the trust fund to successor agencies to pay for certain enforceable obligations, including those embodied in existing passthrough agreements between school districts and former redevelopment agencies. The third priority is administrative costs of successor agencies in carrying out their statutory obligations.

Finally, any funds remaining after these priorities are met will be distributed to local agencies and school entities according to a complex formula set forth in the bill.  However, if at any time the funds available to the successor agency are not sufficient to meet the enforceable obligations of the former redevelopment agency, the deficiency shall be made up by the county auditor-controller from the trust fund, which could cancel out amounts due to local taxing entities.
Therefore, while school districts may expect to continue to receive revenue they would have received prior to the elimination of redevelopment agencies (such as statutory passthrough amounts and payments required by passthrough agreements executed between districts and redevelopment agencies prior to ABX1 26), the dissolution of redevelopment agencies is unlikely to provide school districts with additional revenue.

In his proposed 2011-2012 budget, the Governor projected that with ABX1 26 and ABX127, local educational agencies could expect to receive $1.7 billion in additional revenue in 2012-2013 and $400 million each year in future years in the form of payments from redevelopment agencies that remained in existence under ABX1 27. Since ABX127 was struck down, annual revenues to local educational agencies under ABX1 26 are now projected to be closer to $1 billion, and this amount will, under the Governor’s recently proposed state budget for 2012-2013, be used to offset the state’s revenue limit funding obligations.

Had it survived legal challenge, ABX1 27 could have provided significant ongoing revenue to school districts. As it stands, revenue districts should not expect to receive any financial gain due to the dissolution of redevelopment agencies. Basic aid districts may see an increase in the local property tax revenues they receive, but that will depend on whether sufficient funds exist for distribution to local educational agencies after other obligations of the former redevelopment agencies are satisfied.

There remains a separate lawsuit challenging ABX1 26 on different grounds than were raised in Matosantos, which could yet save redevelopment agencies from elimination. Legislation has also been proposed that would prolong the life of redevelopment agencies for a short time to allow for a more orderly wind-down, but that bill’s future is uncertain. Additionally, because the Court overturned ABX1 27, which would have allowed redevelopment to continue in certain instances, there are new legislative efforts to resurrect at least some redevelopment activities. However, as of this time, redevelopment agencies must still wind down effective February 1, 2012. We will continue to monitor these developments.

If you have any questions about the elimination of redevelopment agencies and its impact on school funding, please do not hesitate to contact one of our eight offices located statewide or consult our website.

 

Written by

Harold Freiman
Shareholder
Walnut Creek Office
hfreiman@lozanosmith.com

Devon Lincoln
Senior Counsel
Monterey Office
dlincoln@lozanosmith.com

 

©2012 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

State Allocation Board Increases Developer Fees; 2012 Updates To Lozano Smith’s Developer Fee Handbook Are Now Available

January 2012
Number 05

On January 25, 2012, the State Allocation Board (SAB) approved a substantial inflationary increase applicable to “Level 1” developer fees. Based on application of the Marshall & Swift Eight California Cities Index for construction costs, SAB adjusted the Level 1 fee to $3.20 per square foot for residential development and $.51 for commercial development. Pursuant to Government Code section 65995, the fee may be increased in every even year. Because there was no inflationary increase in 2010, the fee had remained at the prior levels of $2.96 and $.47 for the past four years. School districts must now take action locally to implement the Level 1 increase.

The alternative “Level 2” fee is not tied to this SAB action, and a Level 2 school district must adopt the fee annually based on its own School Facilities Needs Analysis. However, with the Level 1 fee now at $3.20 for residential development, some Level 2 school districts may find that the new Level 1 fee has exceeded their existing or anticipated Level 2 fees. As a result, Level 2 school districts whose fees are in the $3.00 range may wish to consider reassessing their fees in light of the SAB’s recent action.

We are also pleased to announce that the 2012 update is now available for Lozano Smith’s Facilities and Business Practice Group’s publication, Developer Fee Handbook for School Facilities: A User’s Guide to Qualifying for, Imposing, Increasing, Collecting, Using and Accounting for School Impact Fees in California. The handbook is designed to assist school districts in dealing with numerous developer fee issues. The handbook can help school districts reduce their legal costs by providing comprehensive information regardingCalifornia law and process for school impact fees. Toward this end, the handbook contains procedures, time lines, checklists and forms to be used when adopting fees and/or fee increases.

In light of the current economic environment, we understand that it may be difficult to afford the upfront cost of purchasing a new Developer Fee Handbook. For a limited time, Lozano Smith is making the handbook available to school districts at no present cost. School districts that previously purchased the handbook will be sent the 2012 updates at no additional charge.

If we can be of assistance regarding adoption of fee increases or any other developer fee issue, please feel free to contact any of our eight offices statewide. For more information on the Developer Fee Handbook, or to order a copy, please contact our Client Services department at: clientservices@lozanosmith.com, or call (800) 445-9430.

 

Written by

Harold Freiman
Shareholder
Walnut Creek
hfreiman@lozanosmith.com

Megan Macy
Shareholder and Co-Chair of the Facilities and Business Practice Group
Sacramento
mmacy@lozanosmith.com

 

©2012 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

California Schools Will Compete To Become Nationally Recognized Green Ribbon Schools

January 2012
Number 04

The California Department of Education (CDE) has announced that California schools are now eligible to apply for the Green Ribbon Award from the U.S. Department of Education. Schools must be nominated by state education officials and do not apply directly to the U.S. Department of Education. California will select up four state nominees to compete for the national Green Ribbon Award.

Green Ribbon Schools are part of a comprehensive federal policy for schools that incorporates existing standards related to environment, health and education. The factors for identifying Green Ribbon Schools include many of the elements of existing “green schools” programs such as LEED for Schools and the Collaborative for High Performance Schools (also known as CHPS).

Applicants will be scored on the three Green Ribbon School Pillars: Environmental Impact and Energy Efficiency, Healthy School Environments, and Environmental and sustainability Education. Incorporated into these three pillars are a wide variety of environmentally sensitive benchmarks, including zero greenhouse gas emissions, food that is locally sourced and sustainable, and curriculum that ensures all students receive instruction on environmental and sustainability issues.

No funding is associated with the award, but a Green Ribbon School will be nationally recognized for performance related to environmental impact, health and education. The deadline to apply to CDE is February 17, 2012. The CDE will select up to four nominees by March 22, 2012. The U.S. Department of Education is expected to announce the winners on Earth Day, April 22, 2012. Additional information is located at http://www2.ed.gov/programs/green-ribbon-schools/index.html. To view the application, visit the CDE website at http://www.cde.ca.gov/ls/fa/sf/greenribbonprog.asp.

If you have questions about meeting environmental standards for construction, or about facilities issues generally, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

 

Written by

Devon Lincoln
Senior Counsel
Monterey Office
dlincoln@lozanosmith.com

Rachel Gardunio
Associate and LEED Certified
Walnut Creek Office
rgardunio@lozanosmith.com

 

©2012 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Charter School Is Liable For Failing To Provide Special Education Services

January 2012
Number 03

In a recent decision issued by the California Office of Administrative Hearings (OAH), an administrative law judge (ALJ) ruled that a charter school was liable for failing to provide a special education student with needed transition services. ( Student v. Horizon InstructionalSystemsCharterSchool (2012) OAH Case No. 2011060763.) The case is noteworthy because the charter school, which provided an independent study program, was operating as its own local educational agency (LEA) for the purposes of special education, and therefore it was the school, and not the chartering agency, that was found to be responsible for providing special education students with a free appropriate public education (FAPE). The case highlights the complexities – for both charter schools and their chartering entities – of ensuring that charter school students receive a FAPE.

Charter schools are subject to all of the requirements of special education laws to the same extent as traditional public schools. Many charter petitions and agreements between districts and charter schools provide that the charter school will assume some responsibility for providing special education services; however, the ultimate responsibility for providing special education services to charter school pupils depends on whether the charter school is deemed a public school of the district that granted the charter, or in the alternative, is operating as its own LEA for special education purposes.

A charter school wishing to operate as its own LEA must apply for and be admitted to membership in a special education local plan area (SELPA). Once approved, the charter school participates in the SELPA to the same extent as all other member LEAs. Under this scenario, the charter school is solely responsible for the provision of special education and related services to all of its eligible students. Alternatively, in the case of a charter school operating as a public school of the LEA that granted the charter, the LEA retains responsibility for ensuring that the charter school’s pupils receive a FAPE. In this case, a student with autism enrolled in a homeschool/independent study program operated byHorizonInstructionalSystemsCharterSchool (Horizon) in 2006. Horizon is an independent charter school and operates as its own LEA for special education purposes. The student’s mother provided instruction to the student in the home during the week, and a teacher from Horizon met with the student and his mother periodically to review the student’s progress in the general education curriculum.

When the student turned 16, his IEP team met to develop a new IEP that included a transition plan. Special education law requires a transition plan to include postsecondary goals based on assessments related to training, education, employment, and where appropriate, independent living skills. The IEP must also include transition services needed to assist the student in meeting those goals. In 2011, the student filed a complaint with OAH alleging that the transition plans and services in the IEPs developed for his junior and senior years failed to address his needs in the areas of independent living, mobility, vocational training, and community and work experiences.

Following a due process hearing, the judge issued a decision finding that the charter school had denied the student a FAPE on a number of grounds. The ALJ’s findings included the following:

  • Because the student did not drive and was dependent on his mother for transportation, his need for training in using public transportation was substantial. However, other than showing the student a copy of a local bus schedule, the charter school did not address his mobility needs. The ALJ rebuked the charter school, noting that the student should have received actual practice in taking public transportation.
  • No Horizon special education staff had observed the student in the home or off campus for the purpose of evaluating his daily living skills, including money handling, shopping, personal hygiene, and self-advocacy. As a result, the judge concluded that “Horizon’s attempts to address those needs have been inadequate.”
  • Following the mother’s request that the charter school secure employment for the student though a “workability” program, Horizon notified her that the charter school “does not have programs to connect into the community to provide jobs for students.” The judge noted that the charter school’s failure to expose the student to vocational and community experiences had caused him “significant educational loss.”

By way of remedy, Horizon was ordered to hire an independent assessor to evaluate the student’s functional skills, and to provide him with an adult guide trained to provide mobility training and a job coach to assist him in securing employment and to supervise his job performance after placement.

The responsibility for providing FAPE is one of the many challenges that face charter schools and their chartering authorities. Many charter schools that operate as online or independent study schools have faced the question of how to serve students with special needs outside of a classroom environment. Charter schools that assume responsibility for acting as their own LEAs trade greater autonomy in special education decisions for increased risk of liability, and those risks may be increased where the charter school does not have a daily classroom component. School districts and county offices of education that oversee non-LEA charter schools, including those that offer online or independent study, must evaluate carefully how best to ensure that students enrolled in such schools receive FAPE.

If you have any questions about charter schools and special education generally, please do not hesitate to contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

 

Written by

Devon Lincoln
Senior Counsel and Charter School Practice Group Co-Chair
Monterey Office
dlincoln@lozanosmith.com

Claudia Weaver
Associate
Monterey Office
cweaver@lozanosmith.com

 

©2012 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Governor’s 2012-2013 Budget Proposal Would Eliminate Funding For Transitional Kindergarten

January 2012
Number 02

Governor Brown recently issued his 2012-2013 budget proposal in which he proposes the elimination of funding for the transitional kindergarten program provided for under Senate Bill (SB) 1381 and due to be implemented at the commencement of the 2012- 2013 school year. It is estimated that the elimination of funding for the transitional kindergarten program would save the state $223.7 million during the 2012-2013 school year.

SB 1381 advanced the date by which a child must turn age five before enrolling in kindergarten and age six before enrolling in first grade. To enroll in kindergarten, a child must be five years old on or before December 2 for the 2011-2012 school year, November 1 for 2012-2013, October 1 for 2013-2014, and September 1 for 2014-2015 and thereafter. Corresponding changes are made to the cutoff dates for enrollment in first grade: a child must be six years old on or before December 2 for the 2011-2012 school year, November 1 for 2012-2013, October 1 for 2013-2014, and September 1 for 2014-2015 and thereafter.

SB 1381 also provided that children whose enrollment in kindergarten is delayed due to this new law shall be admitted to transitional kindergarten, the first year of a two-year kindergarten program. Specifically, school districts were required to enroll the following children in transitional kindergarten: in 2012-2013, children who have their fifth birthdays between November 2 and December 2; in 2013-2014, children who have their fifth birthdays between October 2 and December 2; and in 2014-2015 and subsequent school years, children who have their fifth birthdays between September 2 and December 2.

Based upon the Governor’s budget proposal, there is a possibility that the transitional kindergarten program will not be funded for the 2012-2013 school year. There are several practical impacts resulting from this contingency. First, based on SB 1381 and the assumption that a transitional kindergarten program would be required for the 2012-2013 school year, school districts may currently be in the process of developing the required curriculum for such a program. The Governor’s proposed budget puts the utility and exigency of such efforts in limbo. Second, school districts should consider advising affected families of the potential elimination of transitional kindergarten for 2012-2013, as well as determining how the Governor’s proposed elimination of funding for transitional kindergarten would impact their staffing needs for the 2012-2013 school year.

If you have any further questions regarding transitional kindergarten, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

 

Written by

Sloan Simmons
Shareholder and Co-Chair of the Student Practice Group
Sacramento Office
ssimmons@lozanosmith.com

Andrea Epps
Associate
Los Angeles Office
aepps@lozanosmith.com

 

©2012 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.

Attorney General Addresses When School Counselors May Disclose A Student’s Pregnancy Or Abortion-Related Information

January 2012
Number 01

On December 29, 2011, the California Attorney General issued a long-awaited opinion which will guide school counselors in determining when a counselor may disclose personal information about the pregnancy or abortion plans of a student twelve years of age or older. (____ Ops.Cal.Atty.Gen. ____ (Dec. 29, 2011). In short, the Attorney General opined that a school counselor may, but is not required to, disclose such private health matters when necessary for the protection of the student’s health and safety.

The Attorney General stated that Education Code section 49602 mandates that a student’s personal information “shall not be revealed, released, discussed, or referred to,” subject to specified exceptions. One of these exceptions is found in Education Code section 49602 subdivision (c), which states that a student’s personal information may be disclosed when “[r]eporting information to the principal or parents of the pupil when the school counselor has reasonable cause to believe that disclosure is necessary to avert a clear and present danger to the health, safety or welfare of the pupil” or other members of the school community. The Attorney General concluded that section 49602 subdivision (c) permits, but does not require, a school counselor to disclose information about a student’s pregnancy or abortion to the parent or principal when the counselor has reasonable cause to believe that disclosure is necessary to avert a clear and present danger to the student’s health, safety or welfare.

The Attorney General reiterated that minors have constitutional privacy rights and noted that school districts may not require parental consent before a student is released from school for “confidential” medical services, including pregnancy- or abortion-related care. Balanced against this privacy interest is a concern for the student’s health and safety. The Attorney General attempted to strike this balance by recognizing an exception that permits a concerned counselor to make a disclosure where there is a compelling state interest in protecting the health of the minor, such as when the minor intends to self-abort her pregnancy or seek an abortion from an unlicensed provider, or she is refusing medical treatment for serious pregnancy-related complications.

The Attorney General cautioned that a “perceived danger to a student’s health, safety or welfare should not be interpreted too loosely.” While no bright line test was provided, the Attorney General stressed that the exception allowing disclosure will be narrowly construed. The Attorney General did clearly note that “an individual’s or a community’s moral, ethical or religious values should not be considered in determining whether there is a clear and present danger to the health and safety of the student . . . [and] section 49602 would not permit a counselor to reveal a student’s pregnancy-related or abortion related personal information based solely on the counselor’s personal views on the subject of teen pregnancy or abortion, or on the counselor’s or community’s subjective belief that this is the type of information that every parent should know.”

The second part of the opinion examined whether a counselor’s failure to disclose such personal information to a parent or principal can result in civil liability to the counselor or the district if a student suffers harm that could have been prevented by disclosure. The Attorney General first determined that the California Government Claims Act does not provide discretionary immunity for this type of decision. The Attorney General then rejected the doctrine of negligence per se, which is a special form of negligence liability based on the violation of a statutory duty. The Attorney General stated that neither a counselor nor his or her employer can be found negligent per se for a failure to disclose information under section 49602 because the statute only allows, but does not require, disclosure. The Attorney General acknowledged that other potential bases for liability could exist but are beyond the scope of this opinion.

For assistance in interpreting this and other counseling and privacy issues, please contact one of our eight offices located statewide, visit our website, or follow Lozano Smith on Facebook.

 

Written by

Thomas Manniello
Shareholder and Student Practice Group Co-Chair
Monterey Office
tmanniello@lozanosmith.com

Patricia G. Andreen
Senior Counsel
Monterey Office
pandreen@lozanosmith.com

 

©2012 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.