What the Education Budget Trailer Bill Requires of School District Budgets and Reserves

June 2014
Number 31

Governor Brown has now signed the State Budget, including the Education Budget Trailer Bill (SB 858). While the impact on school district budgets and reserve funds has been the subject of much discussion and controversy, the following is a summary of the two separate provisions of SB 858 directed at district reserve funds and a brief outline of the requirements of each.

First, the bill amends Education Code section 42127 to provide that, beginning in 2015-16, if the district’s proposed budget includes a local reserve above the minimum recommended level, the governing board must provide the following information for review at the annual public hearing on its proposed budget:

  • The minimum recommended reserve adopted by the State Board of Education;
  • The district’s fund balance in excess of the recommended reserve; and
  • A statement substantiating the need for the excess reserve level.

This information is to be included in a district’s budgetary submission to its county superintendent, and the county superintendent must verify that each district has complied with these requirements. Budgets prepared by county superintendents must also comply with the above requirements. This provision is effective for the 2015-16 school year and is not contingent on the voters approving the “rainy day fund” in November.

The second provision of SB 858 is not yet effective, but is contingent on voters approving the “rainy day fund” in November. This second provision adds section 42127.01 to the Education Code, to provide that in any fiscal year immediately after a fiscal year in which a transfer is made by the State to the “rainy day fund,” a school district may not adopt a budget that contains a reserve in excess of twice the applicable minimum reserve amount, or three times the applicable reserve amount in the case of Los Angeles Unified School District. This cap on reserves does not appear to apply to county offices of education.

A county superintendent may grant a school district an exemption from the limitation on reserves for up to two consecutive fiscal years if the school district provides documentation indicating that “extraordinary fiscal circumstances” substantiate the need for a higher ending balance.

Section 42127.01 shall become operative on December 15, 2014, but only if the voters approve the “rainy day fund” initiative in November.

If you have any questions regarding the impact or implementation of SB 858 or any other issues, please contact one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Ruth Mendyk
Partner
Fresno Office
rmendyk@lozanosmith.com

Michael Dunne
Paralegal
Fresno Office
mdunne@lozanosmith.com

©2014 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.

Proposition 42: The State Can Refuse to Reimburse Local Agencies for Compliance with Mandatory Provisions of Open Meeting Laws

June 2014
Number 30

A recently passed voter initiative mandates compliance with the Brown Act and the Public Records Act even if compliance is not reimbursed by the state. A 2004 initiative, Proposition 59, made compliance with California’s open meeting laws, including the Brown Act and the California Public Records Act (PRA), a matter of constitutional right, and mandated that those laws be broadly construed in furtherance of the public’s “right of access to information concerning the conduct of the people’s business.” Now Proposition 42, approved by the voters on June 3, 2014, expands upon that constitutional mandate by making compliance with both the Brown Act and PRA mandatory even if the State Legislature suspends reimbursable mandates for compliance with those laws.

There have been a few occasions in the past where the Legislature suspended, or threatened to suspend, certain mandates under the Brown Act or PRA in order to save the costs of reimbursing local agencies for compliance with those mandates. Although reimbursement from the State has been effectively non-existent for some time now, with the approval of Proposition 42, it is now clear that local governments must comply with the Brown Act and PRA even when there is a funding dispute between the State and local governments.

Proposition 42 increases the importance of compliance with both the Brown Act and PRA, continuing the trend started in 2004 and once again emphasizing that the people of the State of California have a right to know what their local agencies are doing. However, it is important to note that Proposition 42 does not take away a public agency’s ability to recover its direct costs of duplication from the party requesting records.

If you have any questions about compliance, including public meeting agenda preparation and responding to Public Records Act requests, please contact one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

David J. Wolfe
Partner
Fresno Office
dwolfe@lozanosmith.com

George J. Vasquez
Associate
Fresno Office
gvasquez@lozanosmith.com

©2014 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.

Every Vote Counts: Local Election Invalidated Under California Voting Rights Act

June 2014
Number 29

On May 28, 2014, a California appellate court upheld a decision to invalidate the City of Palmdale’s city council election for violating the California Voting Rights Act (CVRA), a decision that comes at no small expense for the City.

The CVRA, enacted in 2002, applies to all California public agencies. The law was designed to protect minority voters by prohibiting public agencies from conducting elections that impair racial, ethnic, or language minority groups’ ability to elect candidates of their choice or to influence election outcomes. The remedies under the CVRA for non-compliant elections include imposing an alternate election and requiring the public agency to pay plaintiffs’ attorneys’ fees, both of which remedies can be very expensive. Successful plaintiffs in these cases have been awarded several hundred thousand to over one million dollars, even when the cases settled at the outset of litigation.

Like many California cities, the City of Palmdale used an at-large election system. At-large elections allow all members of a community to vote for each seat on a city council or other legislative body. In Jauregui v. City of Palmdale (May 28, 2014) __ Cal.App.4th __ 2014 WL 2200912, the plaintiffs challenged a City election by alleging that the City’s at-large voting system diluted Latino and African-American votes, in violation of the CVRA. On appeal, the City did not dispute the evidence that minority votes were diluted, but argued that the City was not subject to the CVRA as a charter city because its elections were “municipal affairs.” The Court rejected the City’s argument, stating: “[t]he dilution of votes of a protected class is a matter of statewide concern,” and clarifying that the CVRA applies to all public agencies, including charter cities.

In contrast to at-large election systems, by-district elections (also known as by-trustee area elections for school districts) require candidates to reside within defined districts. Only voters residing within the same specified districts can vote for those candidates. A minority group with a high concentration in a district or trustee area has a higher probability of electing its candidate of choice in by-district elections because votes will not be diluted by the population outside of the district or area where the group is concentrated. A hybrid system is sometimes also used, which requires candidates to reside within a specified district or area but allows the entire community to vote for each candidate. However, such elections are defined as at-large elections by the CVRA.

Jauregui acts as a reminder that all public agencies with at-large or hybrid election systems should review their election practices to ensure that they comply with the CVRA. It is likely that lawsuits alleging a violation of the CVRA will continue to be filed against public agencies that use at-large or hybrid systems, especially due to the ability to recover attorneys’ fees.

If you have questions about your agency’s election practices or the CVRA, please contact one of our eight offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Laurie Avedisian-Favini
Partner
Fresno Office
lavedisian@lozanosmith.com

George J. Vasquez
Associate
Fresno Office
gvasquez@lozanosmith.com

©2014 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.