STATE OF NEW YORK
________________________________________________________________________
5059--A
2015-2016 Regular Sessions
IN ASSEMBLY
February 11, 2015
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Introduced by M. of A. NOLAN -- (at request of the State Education
Department) -- read once and referred to the Committee on Education --
recommitted to the Committee on Education in accordance with Assembly
Rule 3, sec. 2 -- committee discharged, bill amended, ordered
reprinted as amended and recommitted to said committee
AN ACT to amend the education law, in relation to intervention in school
districts with chronic fiscal mismanagement and/or in chronic fiscal
distress
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The education law is amended by adding a new section 211-g
2 to read as follows:
3 § 211-g. Intervention in school districts with chronic fiscal misman-
4 agement and/or in chronic fiscal distress. 1. Stage one fiscal at-risk
5 status. a. The commissioner shall identify as being in stage one fiscal
6 at-risk status a school district in which the board of education has
7 failed to exercise appropriate fiscal management of the school district
8 by failing to take actions necessary to keep the school district budget
9 in balance and/or maintain an appropriate fund balance for a period of
10 at least two school years while maintaining appropriate educational
11 programming; provided that, in the case of a school district that meets
12 the criteria for stage one fiscal at-risk status and has been designated
13 as a district requiring academic progress and/or a focus district for
14 eight or more years and has nine or more schools identified as persis-
15 tently lowest-achieving schools, schools under registration review or
16 focus or priority schools or schools for comprehensive support and
17 improvement or schools required to implement a targeted support and
18 improvement plan, the commissioner may immediately identify such
19 district as being in stage two fiscal intervention status pursuant to
20 subdivision two of this section.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08743-06-6
A. 5059--A 2
1 b. Within ninety days of identification as being in stage one fiscal
2 at-risk status, a school district shall develop a plan or include in any
3 existing state approved plan specific, measurable goals designed to
4 remove the district from stage one fiscal at-risk status. For districts
5 identified as being in stage one fiscal at-risk status, such goals must
6 include, where applicable, but need not be limited to: (i) a plan to
7 maintain balanced revenues and expenditures and an appropriate fund
8 balance while maintaining appropriate educational programming; (ii) a
9 description of the technical assistance and specific staff development
10 to be provided and sustained in support of the plan; and (iii) such
11 other goals as may be prescribed by the commissioner. The district shall
12 submit such plan to the commissioner for approval. The district's plan
13 shall be developed with the assistance of a fiscal team appointed by the
14 commissioner and its implementation must be supported by targeted tech-
15 nical assistance and professional development, consistent with article
16 fourteen of the civil service law, from an external provider approved by
17 the commissioner at an expense to be borne by the district. The reason-
18 able and necessary expenses incurred in the performance of the fiscal
19 team's duties shall be a charge upon the school district. If the commis-
20 sioner determines that the district's proposed plan is not approvable,
21 he or she shall return the plan to the board of education or trustees
22 with an explanation of the reasons for rejection of the plan. The board
23 of education may resubmit the plan for approval with modifications to
24 address the issues raised by the commissioner within a time period
25 prescribed in the regulations of the commissioner.
26 c. The commissioner shall remove a district from stage one fiscal
27 at-risk status, and place the district in stage two fiscal intervention
28 status, if the district's plan is not approved upon resubmission pursu-
29 ant to paragraph b of this subdivision. If the district meets and main-
30 tains its plan goals for three consecutive school years it shall be
31 removed from stage one fiscal at-risk status. If the district fails to
32 meet and maintain its plan goals for three consecutive school years, the
33 commissioner shall identify such district as being in stage two fiscal
34 intervention status, provided that the commissioner may, at any time
35 during stage one fiscal at-risk status, identify a district as being in
36 stage two fiscal intervention status where such district is found to be
37 in noncompliance with its plan or is unwilling or unable to make
38 substantial progress towards accomplishing its plan goals.
39 2. Stage two fiscal intervention status. a. Upon identification of a
40 school district as being in stage two fiscal intervention status, the
41 commissioner may appoint a fiscal administrator to monitor and assist
42 the district in meeting its plan goals. The reasonable and necessary
43 expenses incurred in the performance of the duties of the fiscal admin-
44 istrator shall be a charge upon the school district.
45 b. Upon appointment, the fiscal administrator shall have the power and
46 duty to: (i) review and monitor the district's implementation of and
47 compliance with its plan; (ii) conduct an intensive review of district
48 and school systems, structures, operations and facilities; (iii) recom-
49 mend administrative and operational improvements to strengthen the
50 fiscal efficiency of systems; (iv) work with district staff, adminis-
51 tration and the board of education to review fiscal data, including
52 revenues and expenditures and overall budget; (v) notwithstanding any
53 other provision of law, rule or regulation to the contrary, approve any
54 proposed contract or other obligation having a projected cost of fifty
55 thousand dollars or more; (vi) recommend to the board of education such
56 measures as he or she deems appropriate to assist the district's
A. 5059--A 3
1 progress toward meeting its plan goals, including making recommendations
2 concerning strategies to achieve cost reduction and other fiscal effi-
3 ciencies and all estimates of district revenues to ensure the accuracy
4 of such revenue estimates, and making findings regarding whether the
5 authorization by the board of education of items of expenditure, contin-
6 uation of budget appropriations by the board of education and/or budget-
7 ing of future appropriations by the board of education are consistent
8 with the requirements of a balanced budget, an appropriate unreserved
9 fund balance in accordance with section thirteen hundred eighteen of the
10 real property tax law and the district's plan goal; and (vii) recommend
11 modifications to the district's plan which may include such other meas-
12 ures as he or she deems appropriate to assist the district's progress
13 toward meeting its plan goals.
14 c. The fiscal administrator shall submit periodic reports as may be
15 required by the commissioner on the district's progress toward meeting
16 its plan goals and may make recommendations to the commissioner that the
17 commissioner order the implementation of other measures as appropriate
18 to assist the district in implementing its plan and meeting its plan
19 goals; and/or that the commissioner identify the district as potentially
20 being in stage three fiscal restructuring status.
21 d. The commissioner shall remove a district from stage two fiscal
22 intervention status if it meets and maintains its plan goals for three
23 consecutive school years. If the district fails to meet and maintain its
24 plan goals for three consecutive school years, the commissioner shall
25 identify such district as potentially being in stage three fiscal
26 restructuring status, provided that the commissioner may at any time
27 during stage two fiscal intervention status identify a district as
28 potentially being in stage three fiscal restructuring status where such
29 district is found to be in noncompliance with its plan or is unwilling
30 or unable to make substantial progress towards accomplishing its plan
31 goals.
32 3. Stage three fiscal restructuring status: appointment of an educa-
33 tion oversight board. a. Upon identification of a school district as
34 potentially being in stage three fiscal restructuring status, the
35 commissioner shall appoint an independent review team to assess the
36 reasons for the district's potential fiscal restructuring status and the
37 prospects for improvement and report to the board of regents.
38 b. In the event that the independent review team concludes that the
39 board of education's actions and/or omissions have interfered with
40 implementation of the district's plan, the board of regents may declare
41 that problems in governance are a substantial factor in the district's
42 chronic fiscal mismanagement and that the district is in stage three
43 fiscal restructuring status. Upon issuance of such declaration, the
44 board of regents shall appoint a three member team to serve on an educa-
45 tion oversight board for the school district, which shall have all the
46 powers and duties of the board of education. Upon appointment of an
47 education oversight board, all members of the board of education shall
48 be removed from office and no new board members may be elected or
49 appointed while the education oversight board is in place. Where the
50 independent review team so recommends and the board of regents accepts
51 such recommendation, the superintendent of schools shall vacate his or
52 her office and be deemed removed for cause and the education oversight
53 board shall appoint a new superintendent of schools.
54 c. In the event that the independent review team does not conclude
55 that the board of education's actions and/or omissions have interfered
56 with implementation of the district's plan or the board of regents does
A. 5059--A 4
1 not declare that problems in governance are a substantial factor in the
2 district's chronic fiscal mismanagement, the district shall return to
3 stage two fiscal intervention status until it meets and maintains its
4 plan goals for three consecutive school years. When the district returns
5 to stage two fiscal intervention status, the fiscal administrator may
6 make recommendations for additional measures the district must implement
7 to assist its progress toward meeting and maintaining its plan goals.
8 d. Notwithstanding any other provision of law, rule or regulation to
9 the contrary, where the commissioner removes at least a majority of the
10 members of a board of education pursuant to section three hundred six of
11 this title, the board of regents may declare that the district is in
12 stage three fiscal restructuring status and appoint a three member team
13 to serve on an education oversight board for the school district pursu-
14 ant to this subdivision.
15 e. At least once every four years, the commissioner shall appoint an
16 independent review team to evaluate and make recommendations to the
17 board of regents on the effectiveness of the education oversight board
18 and the need, if any, to continue to have an education oversight board
19 in place. If the board of regents determines that continuation of an
20 education oversight board is necessary, they may reappoint members of
21 the oversight board or appoint a new oversight board pursuant to this
22 subdivision. If the board of regents determines that continuation of an
23 education oversight board is not necessary and that the education over-
24 sight board should be eliminated, the commissioner shall order that a
25 special election be held and when all such newly elected board members
26 take office, the education oversight board shall be terminated.
27 f. At any time after the appointment of an education oversight board,
28 twenty-five qualified voters, or five percent of the number of voters
29 who voted at the last election of members of the board of education,
30 whichever is greater, may petition the commissioner for a determination
31 whether the appointed education oversight board should be modified or
32 eliminated and whether the school district is no longer in fiscal
33 at-risk status. The determination of the commissioner shall be subject
34 to review by the board of regents. If the board of regents determines
35 that the education oversight board should be eliminated, the commission-
36 er shall order that a special election be held and when all such newly
37 elected board members take office, the education oversight board shall
38 be terminated.
39 g. For purposes of this section, "school district" shall mean a
40 common, union free, central, central high school or city school
41 district, other than a city school district in a city having a popu-
42 lation of one million or more.
43 h. The commissioner is authorized to promulgate any regulations and to
44 take any other measures necessary to implement the provisions of this
45 section.
46 § 2. This act shall take effect immediately.
