Senate Bill S7841

                                 BILL NUMBER:  S7841

 TITLE OF BILL :  An act to amend the education law, in relation to
intervention in school districts with chronic fiscal mismanagement
and/or in chronic fiscal distress

 PURPOSE OF THE BILL :

To provide for a system of supports and interventions, aligned with
the framework established in Chapter 57 of the Laws of 2007 and the
Department's Elementary and Secondary Education Act (ESEA) waiver
application, that is designed to build the capacity of school
districts in fiscal distress and the appointment of an education
oversight board in cases where a district is found to be in stage
three fiscal restructuring status.

 SUMMARY OF PROVISIONS :

Section 1 of the bill would permit the Commissioner of Education to
designate a school district as being in stage one fiscal at-risk
status, stage two fiscal intervention status, and stage three fiscal
restructuring status. A district would be designated as being in stage
one fiscal at-risk status where its board of education has failed to
exercise appropriate fiscal management of the school district by
failing to take actions necessary to keep the school district budget
in balance and/or maintain an appropriate fund balance for a period of
              

at least two school years while maintaining appropriate educational
programming. In the case of a school district that meets the criteria
for identification as being in stage one fiscal at-risk status and has
been designated as a. district requiring academic progress and/or a
focus district for eight or more years and has nine or more schools
identified as persistently lowest-achieving schools, schools under
registration review or focus or priority schools or schools for
comprehensive support and improvement or schools required to implement
a targeted improvement plan, the Commissioner may immediately identify
such district as being in stage two fiscal intervention status
pursuant to subdivision two of the bill.

With assistance from a fiscal team appointed by the Commissioner, a
district in stage one fiscal at-risk status would be required, within
ninety days of such designation, to develop a plan or include in its
existing plan specific, measurable goals designed to remove the
district from such status. The bill would require that the district's
plan be supported by targeted technical assistance and professional
development from an approved external provider approved by the
Commissioner at an expense to be borne by the district and that the
plan be submitted to the Commissioner for approval. The reasonable and
necessary expenses incurred in the performance of the joint school
intervention team/integrated intervention team's duties would be a
charge upon the school district.

A district would be removed from stage one fiscal at-risk status if it
meets and maintains its plan goals for three consecutive school years.
If the district fails to do so, the Commissioner would identify the
district as being in stage two fiscal intervention status. The
Commissioner could also, at any time during stage one fiscal at-risk
status, identify the district as being in stage two fiscal
intervention status where the district is found to be in noncompliance
with its plan or is unwilling or unable to make substantial progress
towards accomplishing its plan goals.

Upon identification of a school district as being in stage two fiscal
intervention status, the bill authorizes the Commissioner to appoint a
fiscal administrator to monitor and assist the district in meeting its
plan goals. The reasonable and necessary expenses incurred in the

performance of the duties of the fiscal administrator would be a
charge upon the school district.

Pursuant to the bill, the duties of the fiscal administrator would
include reviewing and monitoring the district's implementation of and
compliance with its plan and recommending measures to the board to
assist the district's progress toward meeting its plan goals. The
fiscal administrator would also have the duty to review district and
school systems, structures, operations and facilities; work with
district administration and the board of education to review data,
analyze district and school structures, plan for improvement, assist
in targeting district priorities; facilitate increased student
performance across the district; and recommend administrative and
operational improvements to strengthen fiscal efficiency of system.
The fiscal administrator's duties would include approving any proposed
contract or other obligation having a projected cost of $50,000 or
more, making recommendations concerning strategies to achieve cost
reductions and other fiscal efficiencies, reviewing all estimates of
district revenues to ensure accuracy, and making findings regarding
whether the authorization by the board of education of items of
expenditure and other appropriations are consistent with the
requirements of a balanced budget and the district's plan goals.

The bill provides that the fiscal administrator would submit periodic
reports to the Commissioner on the district's progress toward meeting
its plan goals and may make certain recommendations to the
Commissioner.

A district would be removed from stage two fiscal intervention status
if it meets and maintains its plan goals for three consecutive school
years. If the district fails to do so, the Commissioner would identify
the district as potentially being in stage three fiscal restructuring
status. The Commissioner could also, at any time during stage two
fiscal intervention status, identify the district as potentially being
in stage three fiscal restructuring status where the district is found
to be in noncompliance with its plan or is unwilling or unable to make
substantial progress towards accomplishing its plan goals.

Upon identification of a district as potentially being in stage three
fiscal restructuring status, the Commissioner would appoint an
independent review team to assess the reasons for the district's
potential designation and the prospects for improvement and report to
the Board of Regents. If the independent review team concludes that
the board of education's actions and/or omissions have interfered with
implementation of the district's plan, the Board of Regents may
declare that problems in governance are a substantial factor in the
district's chronic fiscal mismanagement and that the district is in
stage three fiscal restructuring status. In this case, the Board of
Regents would appoint a three-member team to serve as an education
oversight board for the school district, which would have all the
powers and duties of the board of education. Upon appointment of the
education oversight board, all members of the board of education would
be removed from office and no new board members could be elected or
appointed while the education oversight board is in place.  Where the
independent review team so recommends and the Board of Regents accepts
such recommendation, the superintendent of schools would vacate his or
her office and would be deemed removed for cause and the education
oversight board would have the authority to appoint a new
superintendent of schools.

If the independent review team does not conclude that the board of
education has interfered with the implementation of the district's
plan or the Board of Regents does not declare that governance problems
are a substantial factor in the district's chronic fiscal
mismanagement, as described above, the bill provides that the district

would return to stage two fiscal intervention status until it meets
and maintains its plan goals for three consecutive school years.

The bill would also provide the Board of Regents with the authority to
appoint an education oversight board in school districts in which the
Commissioner has removed at least a majority of the members of a board
of education pursuant to Education Law § 306.

An education oversight board would report directly to the
Commissioner; its members would be appointed for terms of up to four
school years and would serve at the pleasure of the Board of Regents.
Members of the education oversight board would be provided defense and
indemnification by the state pursuant to section 17 of the Public
Officers Law. Pursuant to the bill, at least once every four years,
the Commissioner would appoint an independent review team to evaluate
and make recommendations to the Board of Regents as to the oversight
board's effectiveness and the need, if any, for such board to
continue.

The bill also provides a petition process through which the
Commissioner would determine whether the appointment of an education
oversight board should be modified or eliminated and whether the
school district is no longer in fiscal restructuring status. The bill
provides that the Commissioner's determination would be subject to
review by the Board of Regents. Should the Board of Regents determine
that the education oversight board be eliminated, the bill provides
that the Commissioner would order that a special election be held and
when all newly elected board members take office, the appointment of
the education oversight board would be terminated.

For purposes of this bill, "school district" would mean a common,
union free, central, central high school or city school district,
other than a city school district in a city having a population of one
million or more.

The bill also authorizes the Commissioner to promulgate any
regulations to take any other measures necessary to implement the
provisions of the bill.

§ 2 of the bill would be the effective date.

 STATEMENT IN SUPPORT OF THE BILL :

The Regents Reform Agenda is closely aligned with the school
turnaround initiatives in the Department's successful 2010 Race to the
Top application, and the recently granted ESEA Waiver. The close
alignment of this bill to the elements of those reform initiatives
provides another critical tool to help New York achieve its goal of
graduating students who are college and career ready.

Consistent with current accountability frameworks, the purpose of this
bill is to provide a system of targeted and progressive supports and
interventions that will strengthen and improve school district
governance in school districts where governance problems are a
substantial factor in the district's chronic fiscal underperformance.
School boards have played a critical role in the history of American
public schools and they represent our country's firm belief in the
importance of local governance. While effective school boards support
and enhance staff instructional focus and student academic
achievement, ineffective school boards can negatively impact all
levels of district performance and fiscal stability.

To address the need for school governance teams to focus on increasing
student achievement and maintaining fiscal stability, this bill would
provide authority for the Board of Regents and the State Education
Department to implement a system of progressive interventions in
fiscally distressed districts, including the appointment of an
education oversight board in cases where governance problems are a
substantial factor in the district's chronic fiscal mismanagement.
The education oversight board would have all the powers and duties of
the board of education. Upon appointment of the oversight board, all
members of the board of education would be removed from office, no new
board members could be elected or appointed while the education
oversight board is in place, and, in certain circumstances, the
superintendent of schools would vacate his or her office and would be
deemed removed for cause. The education oversight board would have the
authority to appoint a new superintendent of schools.

This bill builds on the framework of supports established by Chapter
57 of the Laws of 2007 and the Department's ESEA waiver application in
order to build the capacity of the board of education and its members
through professional development, training, and the assistance of
accomplished practitioners who can help the board and district achieve
the appropriate focus on governance that will positively impact
student achievement. In cases where both an independent review team
and the board of regents find that board governance is a factor in the
most serious fiscal distress, the bill also provides a structure for
holding such boards accountable while assisting and supporting the
district in achieving academic and/or fiscal stability.

 BUDGETARY IMPLICATIONS OF THE BILL :

While the bill does not impose direct costs to the State, the
Department will be required to redirect existing resources to fulfill
the technical assistance, oversight and monitoring responsibilities
set forth in the bill.

It is expected that an identified school district that moves through
all three stages described in the bill would incur the following
annual costs: $15,000 for expenses related to the appointment of a
joint school intervention team; $10,000 for training and/or
professional development (based on a seven-member board receiving five
trainings per year), $100,000 for an appointed Distinguished Educator,
and/or $150,000 for an appointed fiscal administrator (based on a 1.0
FTE).

 PRIOR LEGISLATIVE HISTORY :

In 2011, this bill was introduced in the Assembly as A.8319, referred
to the Education Committee, and no further action was taken. In 2012,
this bill was introduced in the Senate as S.6687 and reintroduced in
the Assembly as A.8319. Subsequently, in 2013 and 2014 the bill was
introduced in the Senate as S.4183 and in the Assembly as A.6480. Both
bills were referred to the Education Committee and no further action
was taken. In 2015, the bill was introduced in the Assembly as A.5059,
and in the Senate as S.4217.  Both bills were referred to the
Education Committee, and no further action was taken

 EFFECTIVE DATE :
The bill would take effect immediately.