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ACSA Advises Care with Administrators' Contracts as New Legislation Takes Effect on January 1

December 1, 2011

The Association of California School Administrators (ACSA) is advising school districts to be aware of new legislation that will take effect on January 1, 2012 which could impact individual contracts for superintendents and other senior administrators.

The legislation is AB 1344, authored by Assemblyman Mike Feuer (D-Los Angeles), which was approved by the legislature and signed by the Governor earlier this year. When Feuer wrote the bill, he said it was a response to “Unethical compensation practices in the cities of Bell, Vernon, and elsewhere (that) have uncovered deficiencies in local governance laws that are being exploited by some public officials for their personal gain. To help prevent these abuses, I introduced AB 1344, which prescribes a broad set of reforms aimed at increasing transparency in local government. Taxpayer dollars should never go to enriching the few at the expense of the many, and this bill will make it harder for such unethical practices to take place.”

While Feuer’s focus was undoubtedly on recent scandals in city government relating to inflated salaries for managers (including “escalator” clauses that triggered automatic pay increases), AB 1344 also applies to school districts under certain circumstance – and this means school boards need to be aware of the new law as they consider contracts with senior administrators.

Laura Preston, who works in ACSA Governmental Relations, sent a memo to ACSA members this week that said:

The bill applies to the chief executive officer of a local agency. In the case of schools this would be the superintendent, and a person who is the head of a department of the local agency who could be a deputy, assistant or associate superintendent or other department heads that are not part of a represented employee group.  The key in the latter is whether they have a contract or not.  Many in this latter category do not have a separate contract with the district so the provisions of the bill would not apply.  Beginning January 1, 2012, any new contract or renewal of a contract is prohibited from containing an automatic renewal that provides for an automatic increase in the level of compensation that exceeds a COLA.  AB 1344 defines compensation to include an annual salary or stipend; automobile and equipment allowances; incentives and bonus payments; and payment in excess of the “regular” benefits the district provides for all other employees.  In addition, AB 1344 would prohibit a cash settlement for an executive, including a school superintendent, which exceeds the eighteen months of salary plus benefits currently allowed under statute.

As AB 1344’s provisions take effect, Preston advises that school boards will need to be careful to follow the procedures outlined in the new law. Preston wrote:

A governing board is prohibited from calling a special meeting to approve a contract for a superintendent or others who fall under the parameters of the bill.  Regularly scheduled board meetings and following all of the Brown Act provisions are required for the meeting where a new contract or renewal is adopted.  If your district maintains a website, the agenda needs to be posted with the regular scheduled meeting agenda requirement of 72 hours in advance of the meeting.  A special meeting is not allowed regarding salaries, salary schedules, or compensation paid in the form of fringe benefits of a local agency executive.  AB 1344 cannot and does not abrogate an existing contract.

Finally, the bill adds procedures to replace local agency resources should the chief executive officer be found guilty of a felony that is tied to his/her position.  Additional language will need to be added to a new or renewed contract that provides for reimbursement of any paid leave if the chief executive officer is convicted of a crime involving an abuse of his/her position; funds for the legal criminal defense should he/she be found guilty; and regardless of the term of a contract, any cash settlement for an early termination of a contract tied to the conviction of a felony.

Preston is careful to note that she is not an attorney and does not provide legal advice, but she adds:

“I did work on the bill and can inform you of its intent. The intent of the bill was to ensure transparency for local agency executives.  When you initiate a new contract after January 1, 2012 or renew your contract, the action will need to take place in a regularly scheduled meeting of your Board and shall be posted on your website if there is one.  The bill maintains the current 18-month buyout of your contract including salary and benefits should the need occur.  However, if there is an additional payment or bonus tied to it above the 18 month salary and benefits, then the provisions of AB 1344 apply.”

Source:  Association of California School Administrators