State Allocation Board Adopts Increase to Level One Developer Fees That Can Be Imposed by School Districts

February 2016
Number 9

On February 24, 2016, the State Allocation Board (SAB) adjusted the amount of “Level 1” developer fees that school districts are authorized to collect to $3.48 per square foot of residential development and $0.56 for commercial development. The SAB’s action represents a 3.59 percent increase over the maximum amounts authorized as of January of 2015. The increase takes effect immediately, and may now be implemented by school districts through local action. The latest increase came after the SAB initially took action on January 27, 2016, to authorize a smaller increase of only 1.05 percent over the previously authorized amounts. Following that initial action, the SAB was made aware of a discrepancy in the data used to support the increase, and took further action on February 24 to resolve the discrepancy.

Government Code section 65995 authorizes the SAB to increase the amount of Level 1 developer fees that school districts are authorized to collect. Such an increase may be adopted in every even year. The SAB based increases prior to 2016 on the Marshall & Swift Eight California Cities Index for construction costs. In April of 2015, the SAB adopted the Class B construction cost index according to the RS Means Index. At its January meeting, the SAB based its 1.05 percent increase on the RS Means Index. After that increase was approved, RS Means provided corrected source data to the Office of Public School Construction (OPSC). OPSC staff reviewed the new data and recommended that the SAB amend the 2016 Level 1 assessment for development fees to reflect the corrected amounts. On February 24, 2016, the SAB approved that recommendation.

The SAB increase does not affect “Level 2” developer fees, which must be adopted annually based on a school district’s own School Facilities Needs Analysis. The change also does not affect “Level 3” fees, which school districts may not collect unless and until the SAB certifies that state funds for new school facility construction are no longer available. Since Level 3 fees were created by the Legislature nearly two decades ago, the SAB has never been willing to make that certification.

Based on this and other legal developments, Lozano Smith is preparing the 2016 update for Lozano Smith’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 can help school districts reduce their legal costs by providing comprehensive information regarding California law and process for school impact fees. Toward this end, the handbook contains procedures, time lines, checklists, and forms to be used when adopting and implementing fees and/or increases.

At this time, Lozano Smith is continuing to make the handbook available to school district clients at no cost. School districts that previously ordered the handbook will be sent the 2016 updates at no charge. School districts that have not previously ordered the handbook can do so here.

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. If you have any questions regarding the adoption or implementation of fee increases or any other developer fee issue, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Harold Freiman
Partner

Kelly Rem
Associate

©2016 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.

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Solar Energy Gets Two Important New Year Boosts

February 2016
Number 10

The future of solar energy projects for public agencies looks bright, as two important incentives expected to expire at the end of the year have instead been renewed. Specifically, the federal Solar Investment Tax Credit (ITC), which supports most power purchase agreements (PPAs), was set to expire December 31, 2016. In addition, by most estimates, the current Net Energy Metering program that the investor-owned utilities have up until now offered to their public agency customers (often called NEM 1.0) appeared likely to run out over the summer of 2016. Particularly in the latter half of 2015, school districts and other public agencies accelerated solar energy projects, and especially PPAs, in order to take advantage of these incentives before they expired.

These two pending expirations drove a veritable boom in solar projects planned for this year. However, Congress has now extended the ITC, and the Public Utilities Commission (the Commission) has created a successor Net Energy Metering program. These programs will continue to make the economics of new solar energy projects more attractive than ever to public agencies.

On December 18, 2015, Congress voted to extend the ITC for an additional five years. The ITC offers a federal tax credit of thirty percent of the total cost of qualified solar energy projects. Originally established by the Energy Policy Act of 2005, the ITC was set to expire at the end of 2016. However, as part of the Consolidated Appropriations Act of 2015 (H.R. 2029), Congress extended the thirty percent tax credit for projects beginning prior to January 1, 2020. The ITC will then be gradually phased out through 2022. In practical terms, the ITC makes it possible for a solar energy provider to offer low, fixed rates of energy through a PPA, because the solar energy provider can utilize the ITC to offset tax costs elsewhere in its portfolio. The extension of the ITC has been widely seen as a victory for clean energy projects nationwide.

Also in December 2015, the Commission issued a decision proposing to adopt a new Net Energy Metering (NEM) program. Under the current NEM 1.0 program, solar projects may receive a financial credit from the three investor-owned utilities (Pacific Gas & Electric (PG&E), Southern California Edison (SCE) and San Diego Gas & Electric (SDGE)) for unused power, to offset future energy bills. For instance, if a school district has installed a solar photovoltaic system on a school facility under NEM 1.0, it is able to sell unused power generated by that system (for instance, power generated during the summer when the facility is unoccupied) to its utility at the same rate at which the district would purchase power from the utility when its system is not generating sufficient energy for the facility’s needs (e.g., during evening functions at the facility). NEM 1.0 is limited to a set number of megawatts of energy for each utility, and is forecasted to end sometime in 2016 once it reaches the program capacity.

On January 28, 2016, the Commission’s proposed decision was adopted. As a result, many of the benefits of NEM 1.0 have been extended with NEM 2.0. Eligible solar energy projects will continue to receive a credit for unused power generated. The new NEM program also retains an annual net metering calculation which is particularly important to school districts and other agencies with a large seasonal variation in electricity usage. While the new NEM program retains many of the benefits of the original NEM program, it does allow utility providers to charge an interconnection fee and other nonbypassable charges. The Commission will review the new NEM program in 2019 to evaluate possible adjustments. You can read the decision here.

NEM 2.0 will take effect for new NEM customers after the utilities’ existing NEM program participation caps are met, or July 1, 2017, whichever comes first. Customers who enroll prior to the expiration of the existing NEM program will be eligible for NEM 1.0.

These two actions means that the economic conditions for solar projects remains favorable, but of course each project should be evaluated on its own merits. For more information on the legal landscape of solar energy projects, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Devon Lincoln
Partner

Shawn VanWagenen
Associate

©2016 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.

Tactical Response Plans and SB 707: Are Your Schools Prepared to Evaluate and Respond to Threats?

February 2016
Number 8

Recently, various school district officials nationwide received anonymous communications threatening violent attacks. These events, and the school districts’ responses, highlight the importance of having appropriate plans in place to evaluate and respond to threats.

The California Education Code establishes the basic framework for school districts to take steps to make schools safe. Each school in a district is required to develop a comprehensive school safety plan “that addresses the safety concerns identified through a systematic planning process.” (Ed. Code, § 32280.) A “safety plan” is “a plan to develop strategies aimed at the prevention of, and education about, potential incidents involving crime and violence on the school campus.” (Ed. Code, § 32280.) The plan must be annually reviewed and updated by March 1. (Ed. Code, § 32286.)

Generally, the school site council is responsible for developing the safety plan. (Ed. Code, § 32281.) However, in lieu of the school site council, a school district or county office of education may elect to develop confidentially the portions of the safety plan that include tactical responses to criminal incidents that may result in death or serious bodily injury at the school site, otherwise known as a “tactical response plan.” (Ed. Code, § 32281(f)(1).) The term “tactical response” means the “steps taken to safeguard pupils and staff, to secure the affected school premises, and to apprehend the criminal perpetrator or perpetrators.” (Ed. Code, § 32281(f)(2).) When developing a tactical response plan, district or county officials must consult with law enforcement officials and invite representatives of exclusive bargaining units of district employees to participate. (Ed. Code, § 32281(f)(1).)

The range of incidents that may be addressed in a tactical response plan is broad, and may include serious criminal threats and acts such as bomb threats, active shooter situations, and terrorist attacks. Tactical response plan considerations will vary by district and school. What may be a critical need during an emergency for a large urban school district may not be a concern for a rural school district. Similarly, rural schools may not be able to rely on the resources provided to schools in urban areas. Recognizing this reality, the components of a tactical response plan are purposefully broad to allow educators and law enforcement officials to tailor plans to the unique needs of their district.

Because of the sensitive nature of tactical response plans, they are afforded special protection from disclosure to the public. For example, a governing board may meet in closed session to discuss the tactical response plan. (Ed. Code, § 32281(f)(3); Gov. Code, § 54957.) Additionally, the plan may be exempt from disclosure under the California Public Records Act. (Ed. Code, § 32281(f)(1); Gov. Code, § 6254(aa).) However, a governing board must publically announce the outcome of any vote to approve the plan. (Ed. Code, § 32281(f)(3).)

One current, critical issue related to tactical responses for active shooter situations is permitting the presence of concealed weapons on campus. Recently passed legislation, Senate Bill (SB) 707, gives district officials the authority to determine whether concealed weapon permit holders may possess firearms on school grounds. However, SB 707 provides no guidance to district officials on appropriate standards and procedures in exercising that authority. As a result, school officials are left to struggle with important questions, including:

  • Should concealed weapons be permitted at district sites at all?
  • Who should be granted permission?
  • What criteria should be applied for granting permission?
  • What conditions should be imposed on the storage, handling and use of concealed weapons?

The answers to these questions implicate student and staff safety, district and individual liability exposure, and risk management.

The recent threats across the country are a reminder to California educators to be vigilant and to proactively address student safety, including by paying close attention to the tactical response components of school safety plans.

Lozano Smith will be presenting workshops on topics relating to school safety and SB 707 implementation. For information on our next series of workshops click here.

If you have any questions regarding comprehensive school safety plans, tactical response plans, and SB 707, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Trevin Sims
Partner

Eric Barba
Associate

©2016 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.

A Recent Federal Court Ruling Clarifies that Discrimination Claims Based on Sexual Orientation Are Covered Under Title IX as Sex Discrimination Claims

February 2016
Number 7

The United States District Court in Videckis v. Pepperdine University, (C.D. Cal, December 15, 2015) 2015 U.S. Dist. Lexis 167672, recently addressed the question of whether discrimination on the basis of sexual orientation is actionable under Title IX of the Education Amendments of 1972 (Title IX). In its decision, the court denounced any distinction prior courts have made between “sex discrimination” and “sexual orientation discrimination,” and ruled that such a distinction is “illusory,” “artificial” and “does not exist.” The court held that sexual orientation discrimination is sexual harassment and thus covered under Title IX.

In Videckis, two female, student athletes, Layana White and Haley Videckis (jointly referred to as “Plaintiffs”) filed suit against Pepperdine University, alleging that their basketball coach, Coach Ryan, and other staff members harassed and discriminated against them after concluding that Ms. White and Ms. Videckis were lesbians and were in a relationship. Specifically, Ms. White and Ms. Videckis claimed they were repeatedly interrogated by Coach Ryan and asked, among other things, how close they were to each other, whether they took vacations together, where they slept, whether they went on dates, and whether they would live together. Plaintiffs claimed they were also told by Coach Ryan that lesbianism was a big concern for him and for women’s basketball, that it was a reason why teams lose, and that it would not be tolerated on the team.

Plaintiffs further alleged they were not cleared to play basketball because of Pepperdine University’s discriminatory views. Ms. White’s request that an appeal be filed with the NCAA to allow her to play basketball as a transfer student was ignored. Similarly, Ms. Videckis who had previously sustained a tailbone injury, was not cleared by the staff to play basketball even after she submitted her medical records, which verified she had no physical restrictions or limitations. Ms. White claimed the stress of discrimination caused her to suffer from severe depression and even attempt suicide.

Nevertheless, Pepperdine University requested that the court dismiss three of Plaintiffs’ seven claims and argued that Title IX did not apply to claims based on sexual orientation. Plaintiffs argued that they had an actionable Title IX claim because Title IX covers sexual orientation discrimination, even if Title IX does not explicitly state so.

Title IX provides, in relevant part, that “[n]o person in the United States shall, on the basis of sex . . . be subjected to discrimination under any education program or activity receiving Federal financial assistance.” (20 U.S.C. § 1681(a)) In interpreting Title IX, courts often look to Title VII of the Civil Rights Act of 1964 (Title VII) because the legislative history of Title IX “strongly suggests that Congress meant for similar substantive standards to apply under Title IX as had been developed under Title VII.” (Videckis, 2015 U.S. Dist. Lexis 167672 at 14, citing Emeldi v. Univ. of Oregon (9th Cir. 2012) 698 F.3d 715, 724.) Title VII protects individuals against employment discrimination on the basis of race, color, national origin, sex, and religion. (Title VII, 42 U.S.C. § 2000e et. seq.) Prior court decisions have found that “sex” for purposes of Title IX and Title VII means “gender,” applies “in the biological sense,” and includes “discrimination based on gender stereotypes.” (Videckis, 2015 U.S. Dist. Lexis 167672 at 14 (9th Cir. 2001.).)

Considering past precedent, including a recent ruling under Title VII by the Equal Employment Opportunity Commission (EEOC), the Videckis court denied Pepperdine University’s motion to dismiss Plaintiffs’ Title IX claims based on sexual orientation discrimination. The court ruled “that sexual orientation discrimination is not a category distinct from sex or gender discrimination.” (Id. at 23.) The court noted that “the “actual” sexual orientation of a plaintiff is irrelevant to a Title IX or Title VII claim because it is the biased mind of the alleged discriminator that is the focus of the analysis.” (Id. at 17.) The court went on to state:

Here, Plaintiffs allege that they were told that ‘lesbianism’ would not be tolerated on the team. If Plaintiffs had been males dating females, instead of females dating females, they would not have been subjected to the alleged different treatment. Plaintiffs have stated a straightforward claim of sex discrimination under Title IX. (Id. at 22.)

While Videckis is non-precedential since it is a trial court decision, it is significant because it is the first time a federal court in California has ruled that allegations of discrimination based on sexuality states a Title IX claim on the basis of sex or gender. This holding likely expands the ability of gay and lesbian plaintiffs to successfully bring forth discrimination claims based on sexual orientation alone in the Title IX context. Plaintiffs will no longer be limited to challenging sexual orientation discrimination under Title IX as “gender nonconformity” (i.e., on the basis of one’s appearance or mannerisms).

The law already prohibits discrimination based on sexual orientation. Now this prohibited form of discrimination may be actionable under Title IX as well. If you have any questions regarding this decision, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

 

Written By

Michelle Cannon
Senior Counsel

Stephanie White
Associate

©2016 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.

Notice of Disclosure of Student Records

February 2016

The California Department of Education (“CDE”) recently sent an alert to school districts, charter schools and special education local plan areas (“SELPA”) describing a pending court action and requesting that certain information be posted on their websites. The court action involves student records and the posting is intended to notify families of relevant Family Educational Rights and Privacy Act (“FERPA”) provisions. In addition to posting the specific information and link requested by the CDE, additional information may need to be included in order to meet all of the requirements of FERPA.

In the court action, Morgan Hill Concerned Parents Ass’n v. Cal. Dep’t of Educ. (E.D. Cal. January 26, 2016) Case No. 2:11-cv-3471, 2016 U.S. Dist. LEXIS 8952, two organizations filed a lawsuit against the California Department of Education (CDE) alleging widespread, systemic non-compliance by local education agencies with the IDEA and Section 504. As part of the pending litigation discovery process, the court has ordered the CDE to produce documents and data that contain personally identifiable information of students and former students, including students with and without disabilities.

The court order also provides that families may object to the disclosure of their students’ records. The deadline for filing the objection is April 1, 2016. The CDE’s information includes a link to the form and instructions for filing such an objection.

If you have any questions regarding the CDE’s alert or how best to convey the information to families in compliance with the FERPA notification requirements, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Harold Freiman
Partner

Ruth Mendyk
Partner

Anahid Hoonanian
Senior Counsel

©2016 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 Signs CalSTRS Sponsored Legislation Grandfathering CalSTRS Enrollees Into the System, Providing Option to Change Retirement Systems and Revising the Definition of Creditable Service

February 2016
Number 6

On January 1, 2016 Assembly Bill (AB) 963, a CalSTRS-sponsored bill addressing creditable service issues, became law. With the law now in final form, this Client News Brief updates our Client News Brief No. 26, April 2015.

AB 963 accomplishes four goals:

  1. The bill “grandfathers” in all service that did not meet the definition of creditable service in place at the time but was reported to CalSTRS anyway on or before December 31, 2015.
  2. The bill allows members who are grandfathered in to elect to move to a different public retirement system and allows such members who were previously removed from CalSTRS to elect to move back.
  3. The bill clarifies and amends the definition of creditable service for service performed on or after January 1, 2016.
  4. The bill requires employers to provide CalSTRS with information regarding the certification and/or minimum qualifications of members the employer reports to CalSTRS.

Grandfathering In Employees & Retirees Erroneously Enrolled in CalSTRS

AB 963 provides a one-time remedy for employees and retirees whose employers erroneously reported non-creditable work to CalSTRS. Any employee or retiree who was performing non-creditable work on or before December 31, 2015 and whose employer enrolled then in CalSTRS are grandfathered into the system. Employees who change positions on or after January 1, 2016 will need to ensure compliance with the new definition of creditable service and election requirements for movement between CalSTRS and CalPERS.

Grandfathered Employees & Retirees: Option to Change Public Retirement Systems

Any employee or retiree who has been grandfathered into the system under AB 963 because they were erroneously reported to CalSTRS may choose to move to the CalPERS system. Additionally, any employee or retiree who was ejected from CalSTRS based on creditable service issues may re-enroll in CalSTRS. The deadline for electing the option to change public retirement systems is June 30, 2016.

School district employers likely have obligations regarding notice to employees and retirees potentially impacted by the option to change public retirement systems and regarding reporting duties for employees who elect to change systems. School districts should consult with legal counsel regarding compliance with these requirements and the costs associated with changes to enrollment under AB 963.

Amended Definition of Creditable Service

Retirement benefits under the Defined Benefit Plan administered by CalSTRS are calculated using a member’s years of creditable service, age at retirement, and final compensation. However, compensation is reported to CalSTRS only if paid for work that constitutes “creditable service,” as defined by applicable law. Generally, school district employees not performing “creditable service” should be enrolled in CalPERS.

Under AB 963, “creditable service” is still defined under a two-part test: (1) the employee must be required by law to hold a credential (or, in the community college setting, meet minimum qualifications for an educational administrator or faculty position); and (2) the employee must perform certain duties set forth by statute. Generally speaking, the prescribed duties are instructional or relate to student services. New activities that will count as creditable service include activities connected with the enforcement of laws relating to compulsory education, mentorship of teachers and principals, and the work of community college presidents and chancellors. Importantly, there is still ambiguity regarding proper enrollment of “mixed duty” positions (i.e., those positions that have a mix of creditable and non-creditable duties). These positions should be analyzed on a case by case basis.

Proving Creditable Service

The new statutes require employers to provide information to CalSTRS, upon request, substantiating that employees enrolled in CalSTRS meet the above described test. Accordingly, employers should become familiar with the new creditable service definition and proper enrollment procedures for CalSTRS, including election requirements for employees and new hires moving into new positions that potentially require enrollment in a different public retirement system. Additionally, job descriptions and job vacancy announcements may need to be revised in light of the new creditable service definition.

Lozano Smith attorneys are available to provide guidance on creditable service, creditable compensation and other pre- and post- retirement employment issues for CalSTRS and CalPERS members, including the changes proposed by AB 963.

For a copy of AB 963 in final form, click here.

If you have any questions about CalSTRS or how retirement law governs public schools and their employees, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By

Michael Smith
Partner

Thomas Manniello
Partner

Ashley Emerzian
Senior Counsel

Inna Volkova
Associate

©2016 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.

Good for a Limited Time Only: MCDC Settlement Offers on the Way

February 2016
Number 5

On Wednesday, February 10, 2016, the Government Finance Officers Association (GFOA) issued an alert urging bond issuers to be on the lookout for calls from the Securities and Exchange Commission’s Enforcement Division with settlement offers under the Municipalities Continuing Disclosure Cooperation (MCDC) Initiative. Based on the SEC’s treatment of underwriters in recent rounds of settlement negotiations (in which underwriters were given as little as one week to agree to settlement terms), the GFOA cautions issuers to be prepared for a similarly short timeline to agree to the terms of settlement.

As we reported in 2014 (see Client News Brief No. 45, July 2014), the MCDC Initiative was launched in early 2014 by the SEC to allow bond issuers and underwriters to self-report potential violations of their disclosure obligations. The deadline for bond issuers to participate in the MCDC Initiative was December 1, 2014.

Careful consideration should be given by any bond issuer, in consultation with its legal experts, before entry into a settlement under the MCDC Initiative. As reported in the Wall Street Journal, Lozano Smith negotiated the nation’s first settlement under the MCDC Initiative, on behalf of a California school district. Read the article here or here. Our firm has assisted many school districts, community colleges, and other public agencies as bond counsel, disclosure counsel, and district counsel. If you have any questions about the MCDC Initiative, please contact one of our nine offices located statewide. You can also visit our website, follow us on Facebook or Twitter, or download our Client News Brief App.

Written By
Daniel Maruccia
Partner

Sean Mick
Associate

©2016 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.