Wednesday, January 30, 2013

AB 182 Seeks to Limit School Districts' Issuance of Capital Appreciation Bonds

Last week a bill was introduced that would affect school districts' ability to issue capital appreciation bonds ("CABs").

AB 182 would require the ratio of total debt service to principal for each bond series to not exceed four to one (4:1). The bill would also require each CAB maturing more than ten years after its date of issuance to be subject to mandatory tender for purchase or redemption before its fixed maturity date beginning no later than the tenth anniversary of the date the CAB was issued.

The bill would also require changes to how the information is presented to the board of education, including specifying that CABs are proposed and requiring that the board be presented with an analysis containing the overall cost of the CABs, a comparison to the overall cost of current interest bonds, the reason the CAPS are being recommended, and a copy of certain disclosures made by the underwriter.

You can read the letter from State Superintendent of Public Instruction, Tom Torlakson, and State Treasurer, Bill Lockyer, cautioning against the issuance of CABs until legislative reforms are enacted here.

The full text of the proposed legislation, AB 182, is available here.

Meghan Covert Russell

Tuesday, January 22, 2013

Summary of 2012 Education Legislation

KMTG has compiled its 2012 education legislation Legal Alerts into one easy to reference location.  Here you will find a recap of all the legislation we summarized, along with a link to the actual Legal Alert, as well as the bill itself.

You can access the 2012 Education Legislation Summary here.

Meghan Covert Russell

Wednesday, January 16, 2013

Legislature Expands Definition of "Direct Cost" Relating to Reimbursement for Use of Civic Center Act Facilities

SB 1404 expands the scope of direct costs that school districts can recover for allowing Civic Center use of its facilities.  The new legislation, which went into effect January 1, 2013, amends Education Code section 38134, known as the Civic Center Act, which allows the governing board of a school district to authorize the use of school facilities or grounds under the district’s control to certain organizations or clubs.  In making these changes to the Civic Center Act, the Legislature declared that it intended to “encourage all school districts to maximize opportunities to make available and accessible public school facilities and grounds to their communities as civic centers.”

SB 1404 notes that it was the intent of the Legislature to amend the Civic Center Act in order to “ authorize a school district to charge an organization using school facilities or grounds an amount proportional to the organization’s use of the school facilities or grounds to maintain, repair, restore, and refurbish the school facilities or grounds and to limit the proportional costs related to maintenance, repair, restoration, and refurbishment to only a school’s nonclassroom space and grounds.”

For more information, read KMTG's full Legal Alert here.

Meghan Covert Russell

Tuesday, January 15, 2013

New LAO Report "Overview of Special Education in California"

On January 3, 2013, the State's Legislative Analyst's Office ("LAO") issued a report entitled Overview of Special Education in California. The report provides a broad summary of special education.

Below is the Executive Summary of the report.  A link to the full report is at the bottom of this page.

LAO's Executive Summary

Special education is the “catch–all” term that encompasses the specialized services that schools provide for disabled students. This report provides a comprehensive review of special education—conveying information on applicable laws, affected students, services, funding, and student outcomes.

Public Schools Must Provide Special Support for Disabled Students. Federal law requires schools to provide “specially defined [sic] instruction, and related services, at no cost to parents, to meet the unique needs of a child with a disability.” The law requires schools to provide disabled students with these special supports from age 3 until age 22, or until they graduate from high school, whichever happens first. These services are in addition to what a nondisabled student receives.

About One in Ten California Students Receives Special Education Services. About 686,000 students with disabilities (SWDs) receive special education services in California, comprising about 10 percent of the state’s public school enrollment. Specific learning disabilities—including dyslexia—are the most common diagnoses requiring special education services (affecting about 4 percent of all K–12 students), followed by speech and language impairments. While the overall prevalence of students with autism and chronic health problems still is relatively rare (each affecting 1 percent or less of all public school students), the number of students diagnosed with these disabilities has increased notably over the past decade.

Special Education Services Vary Based on Individual Student Needs. Federal law only requires schools to provide special education services to students with diagnosed disabilities that interfere with their educational attainment. To determine a student’s need and eligibility for special education, schools must conduct a formal evaluation process. If schools determine that general education programs cannot adequately meet a disabled student’s needs, they develop Individualized Education Programs (IEPs) to define the additional services the school will provide. Each student’s IEP differs based on his or her particular disability and needs. Specialized academic instruction is the most common service that schools provide. This category includes any kind of specific practice that adapts the content, methodology, or delivery of instruction to help SWDs access the general curriculum. Other commonly provided services include speech and language assistance and various types of therapies for physical and psychological needs that may be impeding a SWD’s educational attainment. Although federal law encourages schools to educate disabled students in mainstream settings, most (about three–quarters) of special education services are delivered in settings other than regular classrooms.

In General, the State Uses a Regional Structure to Organize Special Education. Because economies of scale often improve both programmatic outcomes and cost–effectiveness, special education funding and some services are administered regionally by 127 Special Education Local Plan Areas (SELPAs) rather than by the approximately 1,000 school districts in the state. Most SELPAs are collaborative consortia of nearby districts, county offices of education (COEs), and charter schools, although some large districts have formed their own independent SELPAs, and three SELPAs consist of only charter schools.

The Excess Costs Associated With Providing Special Education Services Are Supported by Federal, State, and Local Funds. Schools receive billions of dollars to provide a basic educational program—including teachers, instructional materials, academic support, and enrichment activities—for all students, including SWDs. The average annual costs of educating a SWD, however, are more than double those of a mainstream student—approximately $22,300 compared to $9,600. (It is important to note that most SWDs require less severe, less costly services, whereas some students require intensive interventions that cost notably more than $22,300 per year.) Schools receive categorical funds to cover a portion of these additional, or “excess costs,” associated with addressing students’ disabilities. Because federal and state special education funds typically are not sufficient to cover the costs of all IEP–required services, however, schools spend from their local unrestricted general funds to make up the difference. In 2010–11, special education expenditures totaled $8.6 billion. State special education categorical funds covered the largest share of these costs (43 percent), combined with spending from local general purpose funds (39 percent) and federal special education funds (18 percent). Over the past several years, a combination of increasing special education costs and relatively flat state and federal special education funding has resulted in local budgets covering an increasing share of these costs.

Special Education Funds Allocated to SELPAs Based on Overall Student Population, Not Number of Disabled Students. California relies primarily on a “census–based” funding methodology that allocates special education funds to SELPAs based on the total number of students attending, regardless of students’ disability status. This funding model implicitly assumes that SWDs—and associated special education costs—are relatively equally distributed among the general student population and across the state. The amount of per–pupil funding each SELPA receives varies based on historical factors. In 2011–12, the weighted statewide average per–pupil rate was $645 per student (including both state and federal funds). After receiving its allocation, each SELPA develops a local plan for how to allocate funds to the school districts and charter schools in its region based on how it has chosen to organize special education services for SWDs.

Mixed Academic Outcomes for Disabled Students. Some performance indicators suggest SWDs generally are performing well, whereas other indicators are less encouraging. For example, performance on standardized tests (including those specifically designed for SWDs) has improved over the past several years, but a majority of SWDs still fail to meet state and federal achievement expectations. As SWDs near the end of their time receiving special education services, data show that about 60 percent of SWDs graduate on time with a high school diploma and about two–thirds of SWDs are engaged productively after high school (with about half enrolled in an institute of higher education and 15 percent competitively employed within one year after high school).


The complete report, Overview of Special Education in California, is available in PDF or HTML from the LAO.

Monday, January 14, 2013

Join KMTG Attorneys at the ACSA Every Child Counts Symposium!

The 2012 Association of California School Administrators (ACSA) Every Child Counts Symposium will take place this year on January 16-18 at the Portola Hotel and Spa in Monterey. This annual event is hosted by ACSA’s Student Services and Special Education Council.

This year several KMTG attorneys were again selected as speakers and panel participants, including Diane Beall on the hot-topics Legal Issues Panel on Thursday afternoon and Meghan Covert Russell presenting “Leaving a Paper Trail: Best Practices for District Retention and Disclosure of Documents” on Thursday at 8:30 a.m.

If you are attending the ACSA symposium you won't want to miss these insightful presentations by members of the KMTG Special Education group. We hope to see you there!

For more information about the symposium, please visit ACSA's website here.

Friday, January 11, 2013

Court of Appeal Grants Petition for Rehearing in School District Parcel Tax Case

The court of appeal in Borikas v. Alameda Unified School District (--- Cal.Rptr.3d ----, Cal.App. 1 Dist., December 6, 2012; re-hearing granted January 7, 2013) held that the school district did not have the authority to impose a special tax (a parcel tax in this case) that classifies and differentially taxes property within the district.

This initial appellate decision held that a special tax is invalid where it imposes differential tax rates based on the taxpayer or parcel.  In this case, the court initially found that the District had violated Government Code section 50079 where the District’s Measure H taxed residential taxpayers at $120 per parcel per year and commercial and industrial parcels on a per square foot basis (not to exceed $9,500 per year).  According to the court, treating residential and commercial parcels differently when applying a qualified special tax violates the provision that taxes apply uniformly to all taxpayers or all real property within the school district, except where exempted.

However, the court of appeal has granted the District’s petition for rehearing.  KMTG will follow this case and provide an update to our Legal Alerts as this case proceeds in the appellate process.

To read more, please see KMTG's full legal alert on Borikas here.

Meghan Covert Russell

Thursday, January 10, 2013

1% Assessment on Lumber Products

Starting January 1, 2013, lumber and engineered wood products purchased for use in California are subject to a 1% assessment based on the sales price.  This includes many wood products used for school construction, including lumber, plywood, and lath.  However the assessment does apply to products such as furniture, cabinets, or windows. 

For more detailed information you can read the Special Note from the State Board of Equalization here.

Meghan Covert Russell