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As Passed by the Senate
122nd General Assembly
Regular Session
1997-1998 | Sub. H. B. No. 412 |
REPRESENTATIVES CATES-PRINGLE-CLANCY-TERWILLEGER-O'BRIEN-MOTTLEY-
TIBERI-GARCIA-CORBIN-OLMAN-COLONNA-JACOBSON-FOX-HARRIS-
OGG-BRADING-GARDNER-PERZ-PADGETT-BUCHY-LUCAS-THOMAS-
BATCHELDER-MYERS-HOTTINGER-CAREY-JONES-GRENDELL-VERICH-
VESPER-WINKLER-BRADY-KREBS-JOHNSON-WACHTMANN-WILLIAMS-SALERNO
SENATORS CUPP-KEARNS-DRAKE-WATTS-GILLMOR-FINAN
A BILL
To amend sections 3313.94, 3316.03, 3316.07, 3319.17, 5705.29, 5705.38,
5705.391, and 5705.412;
to enact sections 3301.85, 3313.484, 3315.17, 3315.18, 3316.042, 3316.20, and
3319.225; and to repeal section 133.301 of the Revised Code and Section 50.51
of Am. Sub. H.B. 215 of the 122nd General Assembly
relative to school district
fiscal accountability.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 3313.94, 3316.03, 3316.07, 3319.17, 5705.29, 5705.38,
5705.391, and
5705.412 be amended and sections 3301.85, 3313.484, 3315.17, 3315.18,
3316.042, 3316.20, and 3319.225 of the Revised Code be enacted
to read as follows:
Sec. 3301.85. (A)(1) THERE IS HEREBY CREATED THE GOVERNING
COUNCIL OF THE OFFICE OF
EDUCATION ACCOUNTABILITY AND PRODUCTIVITY CONSISTING OF EIGHT
VOTING MEMBERS. OF THE EIGHT MEMBERS, FOUR SHALL BE MEMBERS OF THE GENERAL
ASSEMBLY APPOINTED AS FOLLOWS: ONE SHALL BE APPOINTED BY
THE SPEAKER OF THE HOUSE OF REPRESENTATIVES; ONE SHALL BE
APPOINTED BY THE MINORITY LEADER OF THE HOUSE OF
REPRESENTATIVES; ONE SHALL BE APPOINTED BY THE PRESIDENT OF THE
SENATE; AND ONE SHALL BE APPOINTED BY THE MINORITY LEADER OF THE
SENATE. THE STATE SUPERINTENDENT OF PUBLIC
INSTRUCTION OR A DESIGNEE OF THE SUPERINTENDENT, THE DIRECTOR OF BUDGET AND
MANAGEMENT OR A DESIGNEE OF THE
DIRECTOR, THE CHAIRPERSON OF THE HOUSE EDUCATION COMMITTEE, AND THE
CHAIRPERSON
OF THE SENATE EDUCATION COMMITTEE
SHALL SERVE AS EX OFFICIO MEMBERS.
THE DIRECTOR OF BUDGET AND MANAGEMENT
SHALL BE CHAIRPERSON OF THE COUNCIL UNLESS THE COUNCIL ELECTS A DIFFERENT
MEMBER TO BE CHAIRPERSON.
LEGISLATIVE MEMBERS SHALL SERVE FOR THE REMAINDER OF THE SESSION IN WHICH
THEY ARE APPOINTED UNLESS REMOVED BY THE APPOINTING AUTHORITY. SUCH MEMBERS
MAY BE
REAPPOINTED. ANY APPOINTED MEMBER WHO CEASES TO BE A MEMBER OF
THE LEGISLATIVE HOUSE FROM WHICH THE MEMBER WAS APPOINTED SHALL
CEASE TO BE A MEMBER OF THE COUNCIL. VACANCIES AMONG
APPOINTED MEMBERS SHALL BE FILLED IN THE MANNER PROVIDED FOR
ORIGINAL APPOINTMENTS.
SECTIONS 101.82 TO 101.84 of the Revised Code SHALL
NOT APPLY TO THE GOVERNING COUNCIL.
(2) THE GOVERNING COUNCIL SHALL MONITOR AND OVERSEE THE
OPERATIONS AND DUTIES OF THE OFFICE OF EDUCATION ACCOUNTABILITY
AND PRODUCTIVITY ESTABLISHED UNDER DIVISION
(B) OF THIS SECTION. IN ADDITION, THE GOVERNING COUNCIL MAY DEVELOP
AND ISSUE POLICIES
TO GUIDE THE OFFICE OF EDUCATION
ACCOUNTABILITY AND PRODUCTIVITY IN IMPLEMENTING ITS
DUTIES.
(B) THE OFFICE OF
EDUCATION ACCOUNTABILITY AND PRODUCTIVITY IS HEREBY ESTABLISHED
TO PROVIDE OVERSIGHT OVER COLLECTION
AND ANALYSIS OF SCHOOL DISTRICT EDUCATION PERFORMANCE AND FISCAL DATA. THE
OFFICE SHALL BE UNDER THE
SUPERVISION OF A DIRECTOR WHO SHALL BE APPOINTED AND MAY BE REMOVED BY THE
DIRECTOR
OF BUDGET AND MANAGEMENT.
THE DIRECTOR OF THE OFFICE OF EDUCATION
ACCOUNTABILITY AND PRODUCTIVITY SHALL DIRECT THE OFFICE IN THE
ADMINISTRATION OF ALL ITS DUTIES. THE DUTIES OF THE OFFICE OF
EDUCATION ACCOUNTABILITY AND PRODUCTIVITY SHALL INCLUDE ALL OF
THE FOLLOWING:
(1) ISSUE ANNUAL REPORT CARDS FOR EACH SCHOOL DISTRICT
AND FOR THE STATE AS A WHOLE BASED ON EDUCATION AND FISCAL
PERFORMANCE DATA;
(2) DEVELOP PROCEDURES, INCLUDING PROCEDURES TO ENSURE COMPLIANCE, TO
GUARANTEE THAT THE DATA AND INFORMATION REPORTED BY EACH SCHOOL DISTRICT
PURSUANT
TO SECTION 5705.391 AND DIVISION (F) OF SECTION
3301.0714 OF THE REVISED CODE AND FOR ALL OTHER PURPOSES OF
STATE LAW ARE ACCURATE AND RELIABLE;
(3) ASSIST THE DEPARTMENT OF EDUCATION IN DEVELOPING AND SPECIFYING
STANDARDS FOR THE UTILIZATION OF
HARDWARE AND SOFTWARE FOR THE OPERATION OF THE EDUCATION
MANAGEMENT INFORMATION SYSTEM PURSUANT TO SECTION 3301.0714 OF
THE REVISED CODE TO ENSURE THAT THE
REPORTED DATA CAN BE ANALYZED WITH MAXIMUM UTILITY AND
FLEXIBILITY;
(4) UTILIZE DATA TO ESTABLISH BENCHMARKS FOR CURRENT STATE AND SCHOOL
DISTRICT ACADEMIC AND OPERATIONAL PERFORMANCE LEVELS, COMPARE THESE LEVELS TO
THOSE IN OTHER STATES, AND MEASURE IMPROVEMENT IN THE STATE'S OVERALL PUBLIC
EDUCATION SYSTEM AND ITS STATUS VERSUS OTHER STATES OVER TIME;
(5) MONITOR THE IMPLEMENTATION OF SIGNIFICANT EDUCATION LEGISLATION AND
REPORT ON THE STATE'S PROGRESS TOWARD ACHIEVING THE GOALS OF THE LEGISLATION;
(6) OBJECTIVELY ANALYZE, ORGANIZE, AND AT LEAST ANNUALLY REPORT TO THE
GENERAL ASSEMBLY, GOVERNOR, STATE BOARD OF
EDUCATION, AND STATE SUPERINTENDENT OF PUBLIC INSTRUCTION
REGARDING THE ACADEMIC AND FISCAL PERFORMANCE DATA OF EACH
SCHOOL DISTRICT.
(C) THE OFFICE MAY CONTRACT WITH ANY PERSON OR GOVERNMENTAL
ENTITY TO SELECTIVELY EXAMINE EDUCATIONAL PROGRAMS, DELIVERY MECHANISMS, AND
SCHOOL DISTRICT OPERATIONS TO FACILITATE IMPROVED PERFORMANCE, ACCOUNTABILITY,
AND PRODUCTIVITY. THE OFFICE MAY EVALUATE
OR CONTRACT FOR A STUDY OF OTHER SIGNIFICANT COMPONENTS OF THE PUBLIC
EDUCATION SYSTEM AND MAY MAKE RECOMMENDATIONS BASED ON THE EVALUATIONS OR
STUDIES.
Sec. 3313.484. NO LOAN SHALL BE APPROVED UNDER SECTIONS 3313.483 TO
3313.4811 of the Revised Code AFTER MARCH 1, 1998.
Sec. 3313.94. The board of education of each school
district shall issue an annual report of school progress for each
school under its control and for the district according to
guidelines established by the state board of education. The
reports shall contain a ten-year projection of its enrollment, by
year and by grade level; FINANCIAL REPORTING PURSUANT TO THE REQUIREMENTS
OF DIVISION (B) OF SECTION 3301.07 of the Revised Code; the names,
addresses, and home telephone
numbers of the members of the state board of education, the Ohio
house of representatives, and the Ohio senate elected from
districts within which the school district has territory; and
information about the achievements, problems, plans, and
improvements in the school district. The guidelines shall be
developed in consultation with representatives of the education
profession, local boards of education, and other residents of the
state and shall require some information common to all schools
and school districts, permit reporting of information particular
to each school and district, and permit schools and school
districts to take maximum advantage of reports already required
by their board of education and other governmental units. The
reports shall be provided upon request to members
of the local community of each school and
district and shall be made in formats useful for parents and
residents of the district. The board of education of each school district
shall make the local community aware of the availability of the report.
However, nothing in this section shall be construed to require any school
board to expend funds on advertisements about the reports or on mass mailings
as a means of distributing the reports to the local community.
Sec. 3315.17. (A) THE
BOARD OF EDUCATION OF EACH CITY, EXEMPTED VILLAGE, LOCAL, AND
JOINT VOCATIONAL SCHOOL DISTRICT SHALL ESTABLISH A TEXTBOOK AND
INSTRUCTIONAL MATERIALS FUND AND SHALL DEPOSIT INTO THAT FUND
FOUR PER CENT, OR ANOTHER PERCENTAGE IF ESTABLISHED IN RULES
ADOPTED UNDER DIVISION (B) OF
THIS SECTION, OF ALL REVENUES RECEIVED BY THE DISTRICT FOR
OPERATING EXPENSES. MONEY IN THE FUND SHALL BE USED SOLELY FOR
TEXTBOOKS, INSTRUCTIONAL SOFTWARE, AND INSTRUCTIONAL MATERIALS,
SUPPLIES, AND EQUIPMENT. ANY MONEY IN THE FUND THAT IS NOT USED
IN ANY FISCAL YEAR SHALL CARRY FORWARD TO THE NEXT FISCAL
YEAR.
(B) THE STATE
SUPERINTENDENT OF PUBLIC INSTRUCTION AND THE AUDITOR OF STATE
JOINTLY SHALL ADOPT RULES IN ACCORDANCE WITH
CHAPTER 119. OF THE
REVISED CODE DEFINING WHAT CONSTITUTES
TEXTBOOKS, INSTRUCTIONAL SOFTWARE, AND INSTRUCTIONAL MATERIALS,
SUPPLIES, AND EQUIPMENT FOR WHICH MONEY IN A SCHOOL DISTRICT'S
TEXTBOOK AND INSTRUCTIONAL MATERIALS FUND MAY BE USED. THE
JOINTLY ADOPTED RULES ALSO MAY DESIGNATE A PERCENTAGE, OTHER
THAN FOUR PER CENT, OF DISTRICT OPERATING REVENUES THAT MUST BE
DEPOSITED INTO THE FUND.
THE AUDITOR OF STATE SHALL ADOPT RULES UNDER SECTION 117.20 OF THE
REVISED CODE
AUTHORIZING UP TO A THREE-YEAR PHASE-IN PERIOD FOR DISTRICT BOARDS TO MEET THE
PERCENTAGE REQUIREMENTS OF DIVISION (A) OF
THIS SECTION.
(C) NOTWITHSTANDING
DIVISION (A) OF THIS SECTION, A
DISTRICT BOARD OF EDUCATION IN ANY FISCAL YEAR MAY APPROPRIATE
MONEY IN THE DISTRICT TEXTBOOK AND INSTRUCTIONAL MATERIALS FUND
FOR PURPOSES OTHER THAN THOSE PERMITTED BY THAT DIVISION IF BOTH
OF THE FOLLOWING OCCUR DURING THAT FISCAL YEAR:
(1) ALL OF THE FOLLOWING CERTIFY TO THE DISTRICT BOARD IN WRITING
THAT THE DISTRICT HAS SUFFICIENT TEXTBOOKS, INSTRUCTIONAL
SOFTWARE, AND INSTRUCTIONAL MATERIALS, SUPPLIES, AND EQUIPMENT
TO ENSURE A THOROUGH AND EFFICIENT EDUCATION WITHIN THE
DISTRICT:
(a) THE DISTRICT SUPERINTENDENT;
(b) IN DISTRICTS REQUIRED TO HAVE A BUSINESS ADVISORY COUNCIL, A
PERSON DESIGNATED BY VOTE OF THE BUSINESS ADVISORY COUNCIL;
(c) IF THE DISTRICT TEACHERS ARE REPRESENTED BY AN
EXCLUSIVE BARGAINING REPRESENTATIVE FOR PURPOSES OF
CHAPTER 4117. OF THE
REVISED
CODE, THE PRESIDENT OF THAT
ORGANIZATION OR THE PRESIDENT'S DESIGNEE.
(2) THE DISTRICT BOARD ADOPTS, BY UNANIMOUS VOTE OF ALL
MEMBERS OF THE BOARD, A RESOLUTION STATING THAT THE DISTRICT HAS
SUFFICIENT TEXTBOOKS, INSTRUCTIONAL SOFTWARE, AND INSTRUCTIONAL
MATERIALS, SUPPLIES, AND EQUIPMENT TO ENSURE A THOROUGH AND
EFFICIENT EDUCATION WITHIN THE DISTRICT.
(D) NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN
CHAPTER 4117. of the Revised Code, THE REQUIREMENTS OF THIS SECTION PREVAIL OVER ANY
CONFLICTING PROVISIONS OF AGREEMENTS BETWEEN EMPLOYEE ORGANIZATIONS AND PUBLIC
EMPLOYERS ENTERED INTO ON OR AFTER THE EFFECTIVE DATE OF THIS SECTION.
Sec. 3315.18. (A) THE BOARD OF EDUCATION OF EACH CITY,
EXEMPTED VILLAGE, LOCAL, AND JOINT VOCATIONAL SCHOOL DISTRICT
SHALL ESTABLISH A CAPITAL AND MAINTENANCE FUND AND SHALL DEPOSIT
INTO THAT FUND FOUR PER CENT, OR ANOTHER PERCENTAGE IF
ESTABLISHED IN RULES ADOPTED UNDER DIVISION (B) OF THIS SECTION,
OF ALL REVENUES RECEIVED BY THE DISTRICT THAT WOULD OTHERWISE
HAVE BEEN DEPOSITED IN THE GENERAL FUND, EXCEPT THAT MONEY
RECEIVED FROM A PERMANENT IMPROVEMENT LEVY AUTHORIZED BY SECTION
5705.21 of the Revised Code MAY REPLACE GENERAL REVENUE MONEYS IN
MEETING THE REQUIREMENTS OF THIS SECTION. MONEY IN THE FUND
SHALL BE USED SOLELY FOR ACQUISITION, REPLACEMENT, ENHANCEMENT, MAINTENANCE,
OR REPAIR OF PERMANENT IMPROVEMENTS, AS THAT TERM IS DEFINED IN
SECTION 5705.01 of the Revised Code. ANY MONEY IN THE FUND THAT
IS NOT USED IN ANY FISCAL YEAR SHALL CARRY FORWARD TO THE NEXT
FISCAL YEAR.
(B) THE STATE SUPERINTENDENT OF PUBLIC INSTRUCTION AND
THE AUDITOR OF STATE JOINTLY SHALL ADOPT RULES IN ACCORDANCE
WITH CHAPTER 119. of the Revised Code DEFINING WHAT CONSTITUTES
EXPENDITURES PERMITTED BY DIVISION (A) OF THIS SECTION AND MAY
DESIGNATE A PERCENTAGE, OTHER THAN FOUR PER CENT, OF DISTRICT
OPERATING REVENUES THAT MUST BE DEPOSITED INTO THE FUND.
THE AUDITOR OF STATE SHALL ADOPT RULES UNDER SECTION 117.20 OF THE
REVISED CODE
AUTHORIZING UP TO A THREE-YEAR PHASE-IN PERIOD FOR DISTRICT BOARDS TO MEET THE
PERCENTAGE REQUIREMENTS OF DIVISION (A) OF
THIS SECTION.
(C) NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN
CHAPTER 4117. of the Revised Code, THE REQUIREMENTS OF THIS SECTION PREVAIL OVER ANY
CONFLICTING PROVISIONS OF AGREEMENTS BETWEEN EMPLOYEE ORGANIZATIONS AND PUBLIC
EMPLOYERS ENTERED INTO AFTER THE EFFECTIVE DATE OF THIS SECTION.
Sec. 3316.03. (A) The auditor of state shall declare a school district to
be in a state of fiscal watch if the auditor of state determines that
either division (A)(1) or, (2), OR
(3) of this
section applies to the school district:
(1) All of the following conditions are satisfied with respect to
the school district:
(a) An operating deficit has been certified for the
current fiscal year by the auditor of state under section
3313.483 of the Revised Code, and the certified
operating deficit exceeds eight per cent of the school
district's general fund revenue for the preceding fiscal
year;
(b) The unencumbered cash balance in the school
district's general fund at the close of the preceding fiscal
year, less any advances of property taxes, was less than eight
per cent of the expenditures made from the general fund for the
preceding fiscal year;
(c) A majority of the voting electors have not voted in
favor of levying
a tax under section 5705.194 or 5705.21 or Chapter 5748. of the Revised Code
that the auditor of state expects will raise enough additional revenue in the
next succeeding fiscal year that divisions
(A)(1)(a) and (b) of this section will not apply
to the district in such next succeeding fiscal year.
(2) The school district has
outstanding securities issued under division
(A)(4) of section 3316.06 of
the Revised
Code and its financial planning
and supervision commission has been terminated under section
3316.16 of the Revised
Code.
(3) THE SCHOOL DISTRICT HAS RECEIVED AN ADVANCEMENT UNDER SECTION
3316.20 of the Revised Code.
(B) The auditor of state, after consulting with the superintendent of public
instruction, shall issue an order declaring a school district to be in a
state
of fiscal emergency if the school district board fails, pursuant to section
3316.04 of the Revised Code, to submit a plan acceptable to the state
superintendent of public instruction within one hundred twenty days of the
auditor's declaration pursuant to division (A) of this section;
if a declaration of fiscal emergency is required by division (D)
of section 3316.04 of the Revised Code; or if the auditor of state
determines that all of the following conditions are satisfied with
respect DIVISION (B)(1), (2), (3), OR (4) OF THIS SECTION
APPLIES to the school district:
(1) ALL OF THE FOLLOWING CONDITIONS ARE SATISFIED WITH RESPECT TO THE
SCHOOL DISTRICT:
(a) The board of education of the school district is not
able to demonstrate, to the auditor of state's satisfaction, the
district's ability to repay outstanding loans received pursuant
to section 3313.483 of the Revised Code or to repay securities issued pursuant
to section 133.301 of the Revised Code in accordance with
applicable repayment schedules unless the board requests
additional loans under section 3313.483 and section 133.301 of the
Revised Code in an aggregate principal
amount exceeding fifty per cent of the sum of the
following:
(a)(i) The aggregate original principal
amount of loans received in the preceding fiscal year under
section 3313.483 of the Revised Code;
(b)(ii) The aggregate amount borrowed by the district under
section 133.301 of
the Revised Code, excluding any additional amount borrowed as authorized under
division (C) of that section.
(2)(b) An operating deficit has been certified for the
current fiscal year by the auditor of state under section
3313.483 of the Revised Code, and the certified
operating deficit exceeds fifteen per cent of the school
district's general fund revenue for the preceding fiscal year.
In determining the amount of an operating deficit under division
(B)(2)(1)(b) of this section, the
auditor of state shall credit toward the amount of that deficit
only the amount that may be borrowed from the spending reserve
balance as determined under section 133.301 and division
(G) of section 5705.29 of the Revised Code;.
(3)(c) A majority of the voting electors have not voted in
favor of levying
a tax under section 5705.194 or 5705.21 or Chapter 5748. of the Revised Code
that the auditor of state expects will raise enough additional revenue in the
next succeeding fiscal year that divisions
(A)(1)(a) and (b) of this section will not apply
to the district in such next succeeding fiscal year.
(4)(d) The school district is one that, at the time of the
auditor of
state's determination under this section, had an average daily membership of
more than ten thousand students as most recently reported to the department
of
education pursuant to division (A) of section
3317.03 of the Revised Code.
(2) THE SCHOOL DISTRICT BOARD FAILS, PURSUANT TO
SECTION 3316.04 OF THE REVISED
CODE, TO SUBMIT A PLAN ACCEPTABLE TO THE STATE
SUPERINTENDENT OF PUBLIC INSTRUCTION WITHIN ONE HUNDRED TWENTY DAYS OF THE
AUDITOR'S DECLARATION UNDER DIVISION (A) OF
THIS SECTION;
(3) A DECLARATION OF FISCAL EMERGENCY IS REQUIRED BY DIVISION
(D) OF SECTION 3316.04 OF THE
REVISED
CODE;
(4) THE SCHOOL DISTRICT HAS RECEIVED MORE THAN ONE ADVANCEMENT UNDER
SECTION 3316.20 OF THE REVISED
CODE WITHIN A TWO-YEAR PERIOD, OR HAS RECEIVED
ONLY ONE SUCH ADVANCEMENT BUT ALSO HAS AN OPERATING DEFICIT AS DESCRIBED IN
DIVISION (B)(1)(b) OF THIS
SECTION.
(C) In making the determinations under this section, the auditor of state
may
use financial reports required under section 117.43 of the Revised Code; tax
budgets, certificates of estimated resources and amendments thereof, annual
appropriating measures and spending plans, and any other
documents or information prepared pursuant to
Chapter 5705. of the Revised Code; and any other documents,
records, or information available to the auditor of state that
indicate the conditions described in divisions (A) and (B) of this section.
(D) The auditor of state shall certify the action taken under division (A) or
(B) of this section to the board of education of the school district, the
director of budget and management, the mayor or county auditor who could be
required to act pursuant to division (B)(1) of section 3316.05 of the Revised
Code, and to the superintendent of public instruction.
(E) A determination by the auditor of state under this section
that a fiscal emergency condition does not exist is final and conclusive and
not appealable. A determination by the auditor of state under this section
that a fiscal emergency exists is final, except that the board of education of
the school district affected by such a determination may appeal the
determination of the existence of a fiscal emergency condition to the court of
appeals having territorial jurisdiction over the school district. The appeal
shall be heard expeditiously by the court of appeals and for good cause shown
shall take precedence over all other civil matters except earlier matters of
the same character. Notice of such appeal must be filed with the auditor of
state and such court within thirty days after certification by the auditor of
state to the board of education of the school district provided for in
division (D) of this section. In such appeal, determinations of the
auditor of state shall be presumed to be valid and the board of education
shall have the burden of proving, by clear and convincing evidence, that each
of the determinations made by the auditor of state as to the existence of a
fiscal emergency condition under this section was in error. If the board of
education fails, upon presentation of its case, to prove by clear and
convincing evidence that each such determination by the auditor of state was
in error, the court shall dismiss the appeal. The board of education and the
auditor of state may introduce any evidence relevant to the existence or
nonexistence of such fiscal emergency conditions. The pendency of any such
appeal shall not affect or impede the operations of this chapter; no
restraining order, temporary injunction, or other similar restraint upon
actions consistent with this chapter shall be imposed by the court or any
court pending determination of such appeal; and all things may be done under
this chapter that may be done regardless of the pendency of any such appeal.
Any action taken or contract executed pursuant to this chapter during the
pendency of such appeal is valid and enforceable among all parties,
notwithstanding the decision in such appeal. If the court of appeals reverses
the determination of the existence of a fiscal emergency condition by the
auditor of state, the determination no long has any effect, and any procedures
undertaken as a result of the determination shall be terminated.
Sec. 3316.042. THE AUDITOR OF STATE MAY CONDUCT A PERFORMANCE AUDIT OF A
SCHOOL DISTRICT IN A STATE OF FISCAL WATCH, OR IN A STATE OF FISCAL EMERGENCY,
IN WHICH THE AUDITOR OF STATE REVIEWS ANY PROGRAMS OR AREAS OF OPERATION IN
WHICH THE AUDITOR OF STATE BELIEVES THAT GREATER OPERATIONAL EFFICIENCIES OR
ENHANCED PROGRAM RESULTS CAN BE ACHIEVED. A PERFORMANCE AUDIT UNDER THIS
SECTION SHALL NOT INCLUDE REVIEW OR EVALUATION OF SCHOOL DISTRICT ACADEMIC
PERFORMANCE.
Sec. 3316.07. (A) A school district financial planning and
supervision commission has the following powers, duties, and functions:
(1) To review or to assume responsibility for the development of all tax
budgets, tax levy and bond
and note resolutions, appropriation measures, and certificates of estimated
resources of the school district in order to ensure
that such are consistent with the financial recovery plan and a balanced
appropriation budget for the current fiscal year, and to request and review
any supporting information upon which the financial recovery plan and balanced
appropriation budget may be developed and based, and to
determine whether revenue estimates and estimates of expenditures
and appropriations will result in a balanced budget;
(2) To inspect and secure copies of any document,
resolution, or instrument pertaining to the effective
financial accounting and reporting system, debt obligations, debt
limits, financial recovery plan, balanced appropriation budgets,
appropriation measures, report of audit, statement or invoice, or
other worksheet or record of the school district;
(3) To inspect and secure copies of any document,
instrument, certification, records of proceedings, or other
worksheet or records of the county budget commission,
county auditor, or other official or employee of the school district or of any
other political subdivision or agency of government of the state;
(4) To review, revise, and approve determinations and
certifications affecting the school district made by the county
budget commission or county auditor pursuant to Chapter 5705. of the Revised
Code to ensure that such determinations and certifications are consistent with
the laws of the state;
(5) To bring civil actions, including mandamus, to enforce
this chapter;
(6) After consultation with the officials of the school district and
the auditor of state, to implement or require implementation of any
necessary or appropriate steps
to bring the books of account, accounting systems, and financial
procedures and reports of the school district into compliance with
requirements prescribed by the auditor of state, and to assume responsibility
for achieving such compliance and for making any desirable modifications and
supplementary systems and procedures pertinent to the school district;
(7) To assist or provide assistance to the school district or to assume
the total responsibility for the structuring or the terms of, and the
placement for sale of, debt obligations of the school district;
(8) To perform all other powers, duties, and functions as
provided under this chapter;
(9) To make and enter into all contracts and agreements
necessary or incidental to the performance of its duties and the
exercise of its powers under this chapter;
(10) To consult with officials of the school district and
make recommendations or assume the responsibility for implementing cost
reductions and revenue increases to achieve balanced budgets and carry out the
financial recovery plan in accordance with this chapter;
(11) TO MAKE REDUCTIONS IN FORCE TO BRING THE SCHOOL DISTRICT'S BUDGET
INTO BALANCE, NOTWITHSTANDING SECTION 3319.081 AND DIVISIONS (A) AND
(B) OF SECTION 3319.17 of the Revised Code, AND NOTWITHSTANDING ANY PROVISION TO THE
CONTRARY IN SECTION 4117.08 OR 4117.10 of the Revised Code OR IN ANY COLLECTIVE BARGAINING
AGREEMENT ENTERED INTO ON OR AFTER THE EFFECTIVE DATE OF THIS SECTION.
IN MAKING REDUCTIONS IN FORCE, THE COMMISSION SHALL FIRST CONSIDER
REASONABLE REDUCTIONS AMONG THE ADMINISTRATIVE AND NON-TEACHING EMPLOYEES OF
THE SCHOOL DISTRICT GIVING DUE REGARD TO ENSURING THE DISTRICT'S ABILITY TO
MAINTAIN THE PERSONNEL, PROGRAMS, AND SERVICES ESSENTIAL TO THE PROVISION OF
AN
ADEQUATE EDUCATIONAL PROGRAM.
IN MAKING THESE REDUCTIONS IN NON-TEACHING EMPLOYEES IN DISTRICTS WHERE
CHAPTER 124. OF THE
REVISED CODE
CONTROLS SUCH REDUCTIONS, THE REDUCTIONS SHALL BE MADE IN ACCORDANCE WITH
SECTIONS 124.321 TO 124.327 OF THE REVISED
CODE. IN MAKING THESE REDUCTIONS IN
NON-TEACHING EMPLOYEES IN DISTRICTS WHERE
CHAPTER 124. OF THE
REVISED CODE
DOES NOT CONTROL THESE REDUCTIONS, WITHIN EACH CATEGORY OF NON-TEACHING
EMPLOYEES, THE COMMISSION SHALL GIVE PREFERENCE TO THOSE EMPLOYEES WITH
CONTINUING CONTRACTS OR NON-PROBATIONARY STATUS AND WHO HAVE GREATER
SENIORITY.
IF REVENUES AND EXPENDITURES CANNOT BE BALANCED BY REASONABLE REDUCTIONS
IN ADMINISTRATIVE AND NON-TEACHING EMPLOYEES, THE COMMISSION MAY ALSO MAKE
REASONABLE REDUCTIONS IN THE NUMBER OF TEACHING CONTRACTS. IF THE COMMISSION
FINDS IT NECESSARY TO SUSPEND TEACHING CONTRACTS, IT SHALL SUSPEND THEM IN
ACCORDANCE WITH DIVISION (C) OF SECTION
3319.17 OF THE REVISED
CODE BUT SHALL CONSIDER A REDUCTION IN
NON-CLASSROOM TEACHERS BEFORE CLASSROOM TEACHERS.
(B) During the fiscal emergency period, the commission
shall, in addition to other powers:
(1) With respect to the appropriation measure in effect at
the commencement of the fiscal emergency period of the
school district if that
period commenced more than three months
prior to the end of the current fiscal year, and otherwise with
respect to the appropriation measure for the next fiscal year:
(a) Review and determine the adequacy of all revenues to
meet all expenditures for such fiscal year;
(b) Review and determine the extent of any deficiency of
revenues to meet such expenditures;
(c) Require the school district board or superintendent to
provide justification
documents to substantiate, to the extent and in the manner
considered necessary, any item of revenue or appropriation;
(d) Not later than sixty days after taking office or after
receiving the appropriation measure for the next fiscal year,
issue a public report regarding its review pursuant to division
(B)(1) of this section.
(2) Require the school district board, by resolution, to establish monthly
levels of expenditures and encumbrances
consistent with the financial recovery plan and the commission's review
pursuant to divisions (B)(1)(a) and (1)(b) of this section, or
establish such
levels itself. If the commission permits the district board to make
expenditures, the commission shall monitor the monthly levels of expenditures
and encumbrances and require justification documents to substantiate any
departure from any approved level. No district board shall make any
expenditure apart from the approved level without the written approval of the
commission.
(C) In making any determination pursuant to division (B)
of this section, the commission may
rely on any information considered in its judgment reliable or
material and shall not be restricted by any tax budget or
certificate or any other document the school district may have
adopted or received from any other governmental agency.
(D) County, state, and school district officers or
employees shall assist the commission
diligently and promptly in the prosecution of its duties,
including the furnishing of any materials, including justification documents,
required.
(E) Annually on or before the first day of April during
the fiscal emergency period, the commission shall make reports
and recommendations to the speaker of the house of
representatives and the president of the senate concerning
progress of the school district to eliminate fiscal emergency
conditions, failures of the school district to comply with this
chapter, and recommendations for further actions to attain the
objectives of this chapter, including any legislative action needed to make
provisions of law more effective for their purposes, or to
enhance revenue raising or financing capabilities of
school districts. The commission may make such interim reports as
it considers appropriate for such purposes and shall
make such additional reports as may be requested by either house
of the general assembly.
Sec. 3316.20. THE SCHOOL DISTRICT SOLVENCY ASSISTANCE FUND
IS HEREBY CREATED IN THE STATE TREASURY, TO CONSIST OF SUCH AMOUNTS DESIGNATED
FOR THE PURPOSES OF THE FUND BY THE GENERAL ASSEMBLY. THE FUND SHALL BE USED
TO MAKE ADVANCEMENTS TO SCHOOL DISTRICTS TO ENABLE THEM TO REMAIN SOLVENT AND
TO PAY UNFORSEEABLE EXPENSES OF A TEMPORARY OR EMERGENCY NATURE THAT THEY ARE
UNABLE TO PAY FROM EXISTING RESOURCES.
ADVANCEMENTS SHALL BE MADE FROM THE FUND BY THE SUPERINTENDENT OF PUBLIC
INSTRUCTION IN ACCORDANCE WITH RULES JOINTLY ADOPTED BY THE SUPERINTENDENT AND
THE AUDITOR OF STATE SPECIFYING ADVANCEMENT APPROVAL CRITERIA AND PROCEDURES
NECESSARY FOR ADMINISTERING THE FUND.
THE FUND SHALL BE REIMBURSED FOR ANY AMOUNTS ADVANCED NOT LATER THAN THE
END OF THE SECOND FISCAL YEAR FOLLOWING THE FISCAL YEAR IN WHICH THE
ADVANCEMENT WAS MADE. IF NOT MADE DIRECTLY BY
THE
SCHOOL DISTRICT, SUCH REIMBURSEMENT SHALL BE MADE BY THE DIRECTOR OF BUDGET
AND
MANAGEMENT FROM THE AMOUNTS THE SCHOOL DISTRICT WOULD OTHERWISE RECEIVE
PURSUANT TO SECTIONS 3317.022 TO 3317.025 OF THE
REVISED CODE,
OR FROM ANY OTHER FUNDS APPROPRIATED FOR THE DISTRICT BY THE GENERAL
ASSEMBLY.
Sec. 3319.17. (A) As used in this section, "interdistrict
contract" means any contract or agreement entered into by
an educational service center governing board
and another board or other public entity pursuant to
section 3313.17, 3313.841, 3313.842,
3313.843, 3313.91, or 3323.08 of the Revised Code, including any
such contract or agreement for the provision of services funded
under division (P) of section 3317.024 of the Revised Code or
provided in any unit approved under section 3317.05 or 3317.11 of
the Revised Code.
(B) When, for any of the following reasons that apply to
any city, exempted village, local, or joint vocational
school district or any educational service center, the board decides
that it will be necessary to reduce the number of teachers it
employs, it may make a reasonable reduction:
(1) In the case of any district or service center, return to duty of regular
teachers after leaves of absence including leaves provided pursuant to
division (B) of section 3314.10 of the Revised Code, suspension of schools, or
territorial changes affecting the district or center;
(2) In the case of any city, exempted village, local, or
joint vocational school district, decreased enrollment of pupils
in the district;
(3) In the case of any governing board of a
service center providing
any particular service directly to pupils pursuant to one or more
interdistrict contracts requiring such service, reduction in the
total number of pupils the governing board is required to
provide
with the service under all interdistrict contracts as a result of
the termination or nonrenewal of one or more of these
interdistrict contracts;
(4) In the case of any governing board
providing
any particular service that it does not provide directly to
pupils pursuant to one or more interdistrict contracts requiring
such service, reduction in the total level of the service the
governing board is required to provide under all interdistrict
contracts as a result of the termination or nonrenewal of one or
more of these interdistrict contracts.
(C) In making any such reduction, any city, exempted village,
local, or joint vocational school board shall proceed to suspend
contracts in accordance with the recommendation of the
superintendent of schools who shall, within each teaching field
affected, give preference to teachers on continuing contracts and
to teachers who have greater seniority. In making any such
reduction, any governing board of a service center shall
proceed to suspend
contracts in accordance with the recommendation of the
superintendent who shall, within each teaching field
or service area affected, give preference to teachers on
continuing contracts and to teachers who have greater seniority.
The teachers whose continuing contracts are suspended by
any board pursuant to this section shall have the right of
restoration to continuing service status by that board in the
order of seniority of service in the district if and when
teaching positions become vacant or are created for which any of
such teachers are or become qualified.
Sec. 3319.225. NOTWITHSTANDING SECTIONS 3319.01 AND 3319.22 of the Revised Code, THE
BOARD OF EDUCATION OF ANY
CITY, LOCAL, OR EXEMPTED VILLAGE, OR JOINT VOCATIONAL SCHOOL DISTRICT, OR THE
GOVERNING BOARD OF ANY EDUCATIONAL SERVICE CENTER MAY REQUEST THE
STATE BOARD OF EDUCATION TO
ISSUE A ONE-YEAR
TEMPORARY EDUCATOR
LICENSE VALID FOR BEING EMPLOYED AS A SUPERINTENDENT, OR IN ANY
OTHER ADMINISTRATIVE POSITION, TO AN INDIVIDUAL
SPECIFIED BY THE DISTRICT BOARD. THE STATE BOARD OF
EDUCATION
MAY ISSUE THE EDUCATOR LICENSE IF THE REQUESTING DISTRICT BOARD
HAS DETERMINED BOTH OF THE FOLLOWING:
(A) THE INDIVIDUAL IS OF GOOD MORAL CHARACTER;
(B) THE INDIVIDUAL HOLDS AT LEAST A BACCALAUREATE DEGREE
FROM AN
ACCREDITED INSTITUTION OF HIGHER EDUCATION IN A FIELD RELATED TO
FINANCE OR ADMINISTRATION, OR HAS FIVE YEARS OF RECENT WORK
EXPERIENCE IN EDUCATION, MANAGEMENT, OR ADMINISTRATION.
A ONE-YEAR TEMPORARY EDUCATOR LICENSE IS VALID ONLY IN THE
DISTRICT WHOSE BOARD REQUESTED THE LICENSE.
AN INDIVIDUAL HOLDING SUCH A LICENSE MAY BE
EMPLOYED AS A
SUPERINTENDENT OR IN ANY OTHER ADMINISTRATIVE POSITION IN SUCH
DISTRICT. THE STATE BOARD OF EDUCATION MAY RENEW SUCH LICENSE
ANNUALLY UPON REQUEST OF THE EMPLOYING DISTRICT.
Sec. 5705.29. The tax budget shall present the following
information in such detail as is prescribed by the auditor of
state, unless an alternative form of the budget is permitted under section
5705.281 of the Revised Code:
(A)(1) A statement of the necessary current operating
expenses for the ensuing fiscal year for each department and
division of the subdivision, classified as to personal services
and other expenses, and the fund from which such expenditures are
to be made. Except in the case of a school district, this
estimate may include a contingent expense not designated for any
particular purpose, and not to exceed three per cent of the total
amount of appropriations for current expenses. In the case of a
school district, this estimate may include a contingent expense
not designated for any particular purpose and not to exceed
thirteen per cent of the total amount of appropriations for
current expenses.
(2) A statement of the expenditures for the ensuing fiscal
year necessary for permanent improvements, exclusive of any
expense to be paid from bond issues, classified as to the
improvements contemplated by the subdivision and the fund from
which such expenditures are to be made;
(3) The amounts required for the payment of final
judgments;
(4) A statement of expenditures for the ensuing fiscal
year necessary for any purpose for which a special levy is
authorized, and the fund from which such expenditures are to be
made;
(5) Comparative statements, so far as possible, in
parallel columns of corresponding items of expenditures for the
current fiscal year and the two preceding fiscal years.
(B)(1) An estimate of receipts from other sources than the
general property tax during the ensuing fiscal year, which shall
include an estimate of unencumbered balances at the end of the
current fiscal year, and the funds to which such estimated
receipts are credited;
(2) The amount each fund requires from the general
property tax, which shall be the difference between the
contemplated expenditure from the fund and the estimated
receipts, as provided in this section. The section of the
Revised Code under which the tax is authorized shall be set
forth.
(3) Comparative statements, so far as possible, in
parallel columns of taxes and other revenues for the current
fiscal year and the two preceding fiscal years.
(C)(1) The amount required for debt charges;
(2) The estimated receipts from sources other than the tax
levy for payment of such debt charges, including the proceeds of
refunding bonds to be issued to refund bonds maturing in the next
succeeding fiscal year;
(3) The net amount for which a tax levy shall be made,
classified as to bonds authorized and issued prior to January 1,
1922, and those authorized and issued subsequent to such date,
and as to what portion of the levy will be within and what in
excess of the ten-mill limitation.
(D) An estimate of amounts from taxes authorized to be
levied in excess of the ten-mill limitation on the tax rate, and
the fund to which such amounts will be credited, together with
the sections of the Revised Code under which each such tax is
exempted from all limitations on the tax rate.
(E)(1) A board of education may include in its budget for
the fiscal year in which a levy proposed under section 5705.194,
5705.21, or 5705.213, or the original levy under section 5705.212
of the Revised Code is first extended on the tax list and
duplicate an estimate of expenditures to be known as a voluntary
contingency reserve balance, which shall not be greater than
twenty-five per cent of the total amount of the levy estimated to
be available for appropriation in such year.
(2) A board of education may include in its budget for the
fiscal year following the year in which a levy proposed under
section 5705.194, 5705.21, or 5705.213, or the original levy
under section 5705.212 of the Revised Code is first extended on
the tax list and duplicate an estimate of expenditures to be
known as a voluntary contingency reserve balance, which shall not
be greater than twenty per cent of the amount of the levy
estimated to be available for appropriation in such year.
(3) Except as provided in division (E)(4) of this section,
the full amount of any reserve balance the board includes in its
budget shall be retained by the county auditor and county
treasurer out of the first semiannual settlement of taxes until
the beginning of the next succeeding fiscal year, and thereupon,
with the depository interest apportioned thereto, it shall be
turned over to the board of education, to be used for the
purposes of such fiscal year.
(4) A board of education may, by a two-thirds vote of all
members of the board, appropriate any amount withheld as a
voluntary contingency reserve balance during the fiscal year for
any lawful purpose, provided that prior to such appropriation the
board of education has authorized the expenditure of all amounts
appropriated for contingencies under section 5705.40 of the
Revised Code. Upon request by the board of education, the county
auditor shall draw a warrant on the district's account in the
county treasury payable to the district in the amount requested.
(F)(1) As used in this division, "police or fire department
equipment expenditures" includes expenditures for equipment used to provide
ambulance or emergency medical services operated by a police or fire
department.
A board of township trustees may include in its
budget an estimate of expenditures to be known as a reserve
balance for police or fire department equipment or
road maintenance equipment expenditures. This reserve balance
shall not exceed ten per cent of the total estimated
appropriations included in the township budget estimate. If, in
accordance with division (A) of section 505.83 of the Revised
Code, the board of township trustees has unanimously adopted a
resolution establishing the reserve balance account and
specifying the reason for its creation and has certified the
resolution to the county auditor, the full amount of the reserve
balance, as allowed by the budget commission, shall be turned
over to the township each year by the county auditor and county
treasurer out of the second semiannual settlement of taxes until
the date specified in the resolution, which shall not be later
than five years from the date of the first such deposit in the
account, or until the reserve amount has been reached, whichever
occurs first.
(2) Upon receipt of a certified copy of a resolution to
rescind the creation of a township reserve balance account
pursuant to division (B) of section 505.83 of the Revised Code,
the county auditor shall close the account and transfer the
account moneys and depository interest apportioned to it to the
township's general fund.
(G)(1) A board of education may include A SPENDING RESERVE
in its budget a
spending reserve, which FOR FISCAL YEARS ENDING ON OR BEFORE
JUNE 30, 2002. THE SPENDING RESERVE shall consist of an estimate
of
expenditures not to exceed the district's spending reserve
balance. A district's spending reserve balance is the amount by
which fifty per cent THE DESIGNATED PERCENTAGE of the district's
estimated personal
property taxes to be settled during the calendar year in which
the fiscal year ends exceeds the estimated amount of personal
property taxes to be so settled and received by the district
during that fiscal year. Moneys from a spending reserve shall be
appropriated in accordance with section 133.301 of the Revised
Code.
(2) FOR THE PURPOSES OF COMPUTING A SCHOOL DISTRICT'S SPENDING
RESERVE BALANCE FOR A FISCAL YEAR, THE DESIGNATED PERCENTAGE SHALL BE AS
FOLLOWS:
FISCAL YEAR ENDING IN:
|
DESIGNATED PERCENTAGE
|
1998 | 50% |
1999 | 40% |
2000 | 30% |
2001 | 20% |
2002 | 10% |
(H) As used in this division:
(1) "Police or fire department equipment expenditures" includes
expenditures for equipment used to provide ambulance or emergency
medical services operated by a police or fire department.
(2) "Detention facility" means any place used for the
confinement of a person charged with or convicted of any crime
or alleged or found to be a delinquent or unruly child.
The legislative authority of a municipal corporation may
include in its budget an estimate of expenditures to be known as
a reserve balance for police or fire department equipment
expenditures, for constructing, acquiring, equipping, or repairing a detention
facility, or for road maintenance equipment expenditures by creating, by
ordinance or resolution, a reserve
balance account. Money credited to the account may be derived from any
general fund sources or from the proceeds of a special levy that may be used
for the purpose for which the account is established. The ordinance or
resolution shall state that money in the
account may be expended only for the purpose for which the account is
established, that the
account will be maintained until a specified date not to exceed
five years from the date of the first deposit in the account, and
that the total amount of money in all reserve balance accounts derived from
general fund sources shall not exceed ten per cent of the current total
estimated expenditures from the municipal
corporation's general fund, and the total amount of money in all reserve
balance accounts derived from a special levy shall not exceed ten per cent of
the current total estimated expenditures from the special levy.
The legislative authority shall certify a copy
of the ordinance or resolution to the county auditor. Upon receiving the
certified copy, the county
auditor and county treasurer shall turn over to the municipal corporation, out
of the second
semiannual settlement of taxes, any amount of the reserve balance to be
derived from property tax sources,
but only until the date specified in the ordinance or resolution
or until the reserve amount as indicated in the ordinance or
resolution has been reached, whichever occurs first.
A legislative authority may create a separate reserve balance
account under this division for police department equipment
expenditures, fire department equipment expenditures, or
ambulance or emergency medical services equipment expenditures,
or any combination thereof. Each such account is subject to the
provisions of this section regarding a single account for all such purposes.
Upon receiving a certified copy of an ordinance or
resolution to rescind the creation of a municipal reserve balance
account, the county auditor shall close the account and transfer
all money in the account to the municipal general fund, if the account is
derived from the general fund, or to the fund to which proceeds of the special
levy are credited, if the account is derived from the proceeds of a special
levy.
(I) A board of county
commissioners that has adopted a resolution establishing a
reserve balance account under section 305.23 of the Revised
Code
may include in its budget an estimate of expenditures to be
known as a reserve balance for the purpose for which the account
was established under that section. The reserve shall not
exceed ten per cent of the total estimated appropriations
included in the budget estimate of the general fund in the case
of a reserve balance account established under division
(A) of that section, or ten per
cent of the total estimated appropriations included in the
budget estimate of the special fund in which the account is
established in the case of a reserve balance account established
under division (B) of that
section. If the board of county commissioners has certified a copy of
a resolution to the county auditor pursuant to that section, the
county auditor and county treasurer shall deposit the amount of
the annual reserve balance into the reserve balance account out
of the second semiannual settlement of taxes until the date
specified in that resolution, or until the reserve amount specified in the
resolution has been reached, whichever occurs first.
Upon receiving a certified copy of a resolution rescinding
a reserve balance account, the county auditor shall close the
account and transfer all money in the account to a special fund
created for the purpose of receiving that money. Money
deposited into the fund from the reserve balance account shall
be expended only for the purpose for which the account was
established.
(J) The county budget
commission shall not reduce the taxing authority of a board of
township trustees, a board of county commissioners, or the
legislative authority of a municipal corporation as a result of
the creation of a reserve balance account, and shall not
consider the amount in a reserve balance account as an
unencumbered balance or as revenue for the purposes of division
(E)(3) or (4) of section 5747.51 or division (E)(3) or (4)
of section 5747.62 of the Revised Code.
(K)(1) EACH BOARD OF EDUCATION SHALL INCLUDE IN ITS TAX BUDGET A
BUDGET RESERVE FUND. THE BUDGET RESERVE FUND SHALL CONSIST OF MONEY RESERVED
FOR THE FUND FROM GENERAL FUND REVENUES OR FROM OTHER SOURCES THAT MAY
LAWFULLY BE CREDITED TO THE GENERAL FUND. THE BALANCE IN THE BUDGET RESERVE
FUND SHALL NOT AT ANY TIME BE LESS THAN FIVE PER CENT OF GENERAL FUND REVENUES
FOR THE MOST RECENTLY CONCLUDED FISCAL YEAR, EXCEPT AS PROVIDED IN DIVISION
(K)(2) OR (3) OF THIS SECTION, AND EXCEPT FOR DEFICIENCIES ARISING
FROM THE APPROPRIATION OF MONEY FROM THE FUND FOR UNANTICIPATED DEFICIENCIES
IN REVENUE OR OTHER EMERGENCIES PURSUANT TO A RESOLUTION ADOPTED BY
TWO-THIRDS OF THE MEMBERSHIP OF THE BOARD OF EDUCATION SPECIFYING THE REASON
FOR THE APPROPRIATION. THE AUDITOR OF STATE AND THE SUPERINTENDENT OF PUBLIC
INSTRUCTION JOINTLY SHALL ADOPT RULES GOVERNING CONDITIONS THAT CONSTITUTE
UNANTICIPATED DEFICIENCIES IN REVENUE OR EMERGENCIES FOR WHICH APPROPRIATIONS
MAY BE MADE FROM A BUDGET RESERVE FUND. THE RULES ALSO SHALL PROVIDE THAT A
BOARD OF EDUCATION THAT INCLUDES A SPENDING RESERVE IN ITS TAX BUDGET FOR A
FISCAL YEAR UNDER DIVISION (G) OF THIS SECTION IS NOT SUBJECT TO
DIVISION (K)(2) OF THIS SECTION FOR THAT FISCAL YEAR. A BOARD OF
EDUCATION SHALL NOT APPROPRIATE MONEY FROM A BUDGET RESERVE FUND WITHOUT
FILING A SCHEDULE FOR REPLENISHING THE FUND WITH THE SUPERINTENDENT OF PUBLIC
INSTRUCTION AND RECEIVING APPROVAL OF THE SCHEDULE FROM THE SUPERINTENDENT OF
PUBLIC INSTRUCTION.
(2) BEGINNING WITH THE FISCAL YEAR ENDING IN 1999 AND CONTINUING EACH
FISCAL YEAR UNTIL THE BALANCE IN THE BUDGET RESERVE FUND EQUALS FIVE PER CENT
OF THE DISTRICT'S REVENUES RECEIVED FOR CURRENT EXPENSES FOR THE PRECEDING
FISCAL YEAR, IF THE GROWTH IN A DISTRICT'S TOTAL REVENUES RECEIVED FOR CURRENT
EXPENSES FROM ONE FISCAL YEAR TO THE NEXT IS THREE PER CENT OR MORE, THE BOARD
OF EDUCATION SHALL CREDIT TO ITS BUDGET RESERVE FUND, FROM THE GENERAL FUND OR
FROM OTHER SOURCES THAT MAY LAWFULLY BE CREDITED TO THE GENERAL FUND, AN
AMOUNT NOT LESS THAN ONE PER CENT OF THE REVENUE RECEIVED FOR CURRENT EXPENSES
FOR THE FISCAL YEAR, AT WHICH TIME THE BALANCE IN THE BUDGET RESERVE FUND
SHALL BE MAINTAINED AS OTHERWISE REQUIRED UNDER DIVISION (K)(1) OF
THIS SECTION.
(3) THE BALANCE IN THE BUDGET RESERVE FUND OF A SCHOOL DISTRICT MAY BE
LESS THAN FIVE PER CENT OF THE GENERAL FUND REVENUE FOR THE MOST RECENTLY
CONCLUDED FISCAL YEAR IN ANY FISCAL YEAR IN WHICH THE SCHOOL DISTRICT IS IN A
STATE OF FISCAL WATCH OR FISCAL EMERGENCY PURSUANT TO SECTION 3316.03 of the Revised Code.
(4) NOTWITHSTANDING ANY PROVISION TO THE CONTRARY IN CHAPTER
4117. of the Revised Code, THE REQUIREMENTS OF DIVISION (K) OF THIS SECTION PREVAIL
OVER ANY CONFLICTING PROVISIONS OF AGREEMENTS BETWEEN EMPLOYEE ORGANIZATIONS
AND PUBLIC EMPLOYERS ENTERED INTO AFTER THE EFFECTIVE DATE OF THIS SECTION.
Sec. 5705.38. (A) This division does not apply to school
district appropriation measures. On or about the first day of
each year, the taxing authority of each subdivision or other
taxing unit shall pass an appropriation measure, and thereafter
during the year it may pass any supplemental appropriation
measures as it finds necessary, based on the revised tax budget
and the official certificate of estimated resources or amendments
of the certificate. If adoption of a tax budget was waived under section
5705.281 of the Revised Code, appropriation measures shall be based on the
official certificate of estimated resources. If it desires to postpone the
passage of the annual appropriation measure until an amended certificate is
received based on the actual balances, it may pass a temporary
appropriation measure for meeting the ordinary expenses of the
taxing unit until no later than the first day of April of the
current year, and the appropriations made in the temporary
measure shall be chargeable to the appropriations in the annual
appropriation measure for that fiscal year when passed.
(B) A board of education shall pass its annual
appropriation measure by the first day of October. If, by the
first day of October, a board has not received either the amended
certificates of estimated resources required by division (B) of
section 5705.36 of the Revised Code or certifications that no
amended certificates need be issued, the adoption of the annual
appropriation measure shall be delayed until the amended
certificates or certifications are received. Prior to the
passage of the annual appropriation measure, the board may pass a
temporary appropriation measure for meeting the ordinary expenses
of the district until it passes an annual appropriation measure,
and appropriations made in the temporary measure shall be
chargeable to the appropriations in the annual appropriation
measure for that fiscal year when passed. During the fiscal year
and after the passage of the annual appropriation measure, a
district may pass any supplemental appropriation measures as it
finds necessary, based on the revised tax budget and the official
certificate of estimated resources or amendments of the
certificate. THE ANNUAL APPROPRIATION MEASURE, AND ANY TEMPORARY OR
SUPPLEMENTAL APPROPRIATION MEASURE, SHALL PROVIDE FOR THE RESERVATION OF A
SUFFICIENT AMOUNT OF MONEY FOR THE BUDGET RESERVE FUND AS REQUIRED UNDER
DIVISION (K) OF SECTION 5705.29 of the Revised Code. School district
appropriation measures shall be in
the form as the auditor of state, after consultation with the tax
commissioner, prescribes.
(C) Appropriation measures shall be classified so as to
set forth separately the amounts appropriated for each office,
department, and division, and, within each, the amount
appropriated for personal services. In the case of a municipal
university, the board of directors of which have assumed, in the
manner provided by law, custody and control of the funds of the
university, funds shall be appropriated as a lump sum for the use
of the university.
Sec. 5705.391. (A) A board of education shall adopt as part of
its annual appropriation measure a spending plan or in the case
of an amendment or supplement to an appropriation measure, an
amended spending plan, setting forth a schedule of expenses and
expenditures of all appropriated funds by the school district for
the fiscal year. A copy of the annual appropriation measure and
any amendment or supplement to it and the spending plan or
amended plan shall be submitted to the superintendent of public
instruction and shall set forth all revenues available for
appropriation by the district during the fiscal year and their
sources; the nature and amount of expenses to be incurred by the
district during such year, the outstanding and unpaid expenses on
the date the appropriation measure, amendment, or supplement is
adopted; the date or dates by which such expenses must be paid;
and such other information as the superintendent requires to
enable him THE SUPERINTENDENT to determine whether during such
year the district
will incur any expenses that will impair its ability to operate
its schools with the revenue available to it from existing
revenue sources. The plan or amended plan shall be presented in
such detail and form as the superintendent prescribes.
(B) NO LATER THAN JULY 1, 1998, THE DEPARTMENT OF
EDUCATION AND THE AUDITOR OF STATE SHALL JOINTLY ADOPT RULES REQUIRING SCHOOL
DISTRICTS TO INCLUDE FIVE-YEAR PROJECTIONS OF REVENUES AND EXPENDITURES IN THE
SPENDING PLAN REQUIRED BY THIS SECTION. THE RULES SHALL PROVIDE FOR THE
AUDITOR OR THE DEPARTMENT TO EXAMINE THE FIVE-YEAR PROJECTIONS AND TO
DETERMINE WHETHER ANY FURTHER FISCAL ANALYSIS IS NEEDED TO ASCERTAIN WHETHER A
DISTRICT HAS THE POTENTIAL TO INCUR A DEFICIT DURING THE FIRST THREE YEARS OF
THE FIVE-YEAR PERIOD.
THE AUDITOR AND THE DEPARTMENT MAY CONDUCT ANY FURTHER AUDITS OR ANALYSES
NECESSARY TO ASSESS ANY DISTRICT'S FISCAL CONDITION AND SHALL IMMEDIATELY
NOTIFY
ANY DISTRICT OF ANY POTENTIAL TO INCUR A DEFICIT IN THE CURRENT FISCAL YEAR OR
OF ANY STRONG INDICATIONS THAT A DEFICIT WILL BE INCURRED IN EITHER OF THE
ENSUING TWO YEARS.
A DISTRICT NOTIFIED UNDER THIS SECTION SHALL TAKE IMMEDIATE STEPS TO
ELIMINATE ANY DEFICIT IN THE CURRENT FISCAL YEAR AND SHALL BEGIN TO PLAN TO
AVOID THE PROJECTED FUTURE DEFICITS.
(C) THE STATE BOARD OF EDUCATION, IN ACCORDANCE WITH SECTIONS
3319.31 AND 3319.311 of the Revised Code, MAY LIMIT, SUSPEND, OR REVOKE A LICENSE AS DEFINED
UNDER
SECTION 3319.31 of the Revised Code THAT HAS BEEN ISSUED TO ANY SCHOOL EMPLOYEE FOUND TO HAVE
WILLFULLY CONTRIBUTED ERRONEOUS, INACCURATE, OR INCOMPLETE DATA REQUIRED FOR
THE SUBMISSION OF THE APPROPRIATION MEASURE AND SPENDING PLAN REQUIRED BY THIS
SECTION.
Sec. 5705.412. Notwithstanding section 5705.41 of the
Revised Code, no school district shall adopt any appropriation
measure, make any contract, give any order involving the
expenditure of money, or increase during any school year any wage
or salary schedule unless there is attached thereto a certificate
signed by the treasurer and president of the board of education
and the superintendent that the school district has in effect for
the remainder of the fiscal year and the succeeding fiscal year
the authorization to levy taxes including the renewal or
replacement of existing levies which, when combined with the
estimated revenue from all other sources available to the
district at the time of certification, are sufficient to provide
the operating revenues necessary to enable the district to
operate MAINTAIN ALL PERSONNEL, PROGRAMS, AND SERVICES ESSENTIAL TO
THE PROVISION OF an adequate educational program for all the days set
forth in its adopted school calendars for the current fiscal year
and for a number of days in the succeeding fiscal year equal to
the number of days instruction was held or is scheduled for the
current fiscal year. However, a
certificate attached to an
appropriation measure under this section shall cover only the
fiscal year in which the appropriation measure is effective and
shall not consider the renewal or replacement of an existing levy
as the authority to levy taxes that are subject to appropriation
in the current fiscal year unless the renewal or replacement levy
has been approved by the electors and is subject to appropriation
in the current fiscal year and a. IN ADDITION, A
certificate attached, in accordance with this
section, to any contract shall cover the term of the contract or the current
fiscal year plus the two immediately succeeding fiscal years, whichever period
of years is greater.
If the board of education has not
adopted a school calendar for the school year beginning on the
first day of the fiscal year in which a certificate is required,
the certificate attached to an appropriation measure shall
include the number of days on which instruction was held in the
preceding fiscal year and other certificates required under this
section shall include that number of days for the fiscal year in
which the certificate is required and the succeeding fiscal year.
Every contract made, order given, or schedule adopted or put into
effect without such a certificate shall be void, and no payment
of any amount due thereon shall be made. The department of education and
the auditor of
state jointly shall develop rules governing the methods by which
treasurers, presidents of boards of education, and
superintendents shall estimate revenue and determine whether
such revenue is sufficient to provide necessary operating
revenue for the purpose of making certifications required by
this section. The department of education shall adopt the jointly
developed
rules.
The auditor of state
shall be responsible for determining whether school districts are
in compliance with this section.
At the time a school district is audited
pursuant to section 117.11 of the Revised Code, the auditor of state shall
review each
certificate issued under this section since the district's last audit, and the
appropriation measure, contract, order, or wage and salary schedule to which
such certificate was attached. This provision shall not
preclude any court from making a determination regarding
compliance with this section. If noncompliance is determined,
the provisions of section 117.28 of the Revised Code shall have
effect.
The treasurer shall forward a copy of each certificate of
available resources required under this section to the auditor of
any county in which a part of the district is located. The
county auditor shall not distribute property taxes or any payment
under Chapter 3317. of the Revised Code to a school district that
has not forwarded copies of all such certificates. If a county
auditor determines that a copy of a certificate has not been
forwarded as required, or has reason to believe that a
certificate for which a copy has been forwarded contains false
statements or that a certificate has not been signed and attached
to an appropriation measure, contract, order, or wage and salary
schedule as required by this section, the auditor shall provide
immediate written notification to the superintendent of public
instruction. In the case of a certificate which the auditor has
reason to believe contains false information or the failure to
sign and attach a certificate as required, the auditor shall also
provide immediate written notification to the auditor of state
and the county prosecuting attorney, city director of law, or
other chief law officer of the district.
This section does not apply to any contract, order, or
increase in any wage or salary schedule that is necessary in
order to enable a board of education to comply with division (B)
of section 3317.13 of the Revised Code, provided the contract,
order, or increase does not exceed the amount required to be paid
to be in compliance with such division.
Any officer, employee, or other person who knowingly
expends or authorizes the expenditure of any public funds or
knowingly authorizes or executes any contract, order, or schedule
contrary to this section, knowingly expends or authorizes the
expenditure of any public funds on the void contract, order, or
schedule, or knowingly issues a certificate under this section
which contains any false statements is liable to the school
district for the full amount paid from the district's funds on
the contract, order, or schedule. The officer, employee, or
other person is jointly and severally liable in person and upon
any official bond that the officer, employee, or other person
has given to the school district to the
extent of any payments on the void claim, not to exceed twenty
thousand dollars. However, no officer, employee, or other person
shall be liable for a mistaken estimate of available resources
made in good faith and based upon reasonable grounds. If an officer,
employee, or other person is found to have complied with rules
adopted by the department of education under this section governing
methods by which revenue shall be estimated and determined
sufficient to provide necessary operating revenue for the
purpose of making certifications required by this section, the
officer, employee, or other person shall not be liable under
this section if the estimates and determinations made according
to those rules do not, in fact, conform with actual
revenue. The
prosecuting attorney of the county, the city director of law, or
other chief law officer of the district shall enforce this
liability by civil action brought in any court of appropriate
jurisdiction in the name of and on behalf of the school district.
If the prosecuting attorney, city director of law, or other chief
law officer of the district fails, upon the written request of
any taxpayer, to institute action for the enforcement of the
liability, the taxpayer may institute the action in the
taxpayer's own name
in behalf of the subdivision.
This section does not require the attachment of an
additional certificate beyond that required by section 5705.41 of
the Revised Code for any purchase order, for current payrolls of,
or contracts of employment with, regular employees or officers.
This section does not require the attachment of a
certificate to a temporary appropriation measure if all of the
following apply:
(A) The amount appropriated does not exceed twenty-five
per cent of the total amount from all sources available for
expenditure from any fund during the preceding fiscal year;
(B) The measure will not be in effect on or after the
thirtieth day following the earliest date on which the district
may pass an annual appropriation measure;
(C) An amended official certificate of estimated resources
for the current year, if required, has not been certified to the
board of education under division (B) of section 5705.36 of the
Revised Code.
Section 2. That existing sections 3313.94, 3316.03, 3316.07, 3319.17, 5705.29,
5705.38, 5705.391, and 5705.412 of the Revised Code and Section 50.51
of Am.
Sub. H.B. 215 of the 122nd General Assembly are hereby repealed.
Section 3. That section 133.301 of the Revised Code is hereby repealed,
effective June 30, 2002.
Section 4. Section 5705.412 of the Revised Code, as amended by
this act, shall take effect July 1, 1998.
Section 5. Section 5705.29 of the Revised Code is presented in this act
as a composite of the section as amended by both
Am. Sub. H.B. 86 and Sub. H.B. 194 of the 121st General Assembly, with the new
language of
neither of the acts shown in capital letters. This is in
recognition of the principle stated in division (B) of section
1.52 of the Revised Code that such amendments are to be
harmonized where not substantively irreconcilable and constitutes
a legislative finding that such is the resulting version in
effect prior to the effective date of this act.
Section 6. By December 31, 1997, pursuant to division (B) of section 3301.07
of the Revised Code, the State Board of Education shall develop and require
each school district to prepare and make available to the public year-to-year
financial comparisons for at least five years for the district using
standardized financial reporting forms that are understandable to the average
citizen.
Section 7. The rules required to be adopted by the Auditor of State and the
Department of Education under division (K) of section 5705.29 of the Revised
Code, as amended by this act, shall be adopted not later than June 30, 1998.
Section 8. The Department of Education shall, not later than March 31, 1998,
develop the rules that will be required under section 5705.412 of the Revised
Code once that section takes effect, as amended by this act. However, such
rules shall not go into effect
until July 1, 1998.
Section 9. The responsibilities imposed upon the Office of Education
Accountability and Productivity and its director and governing board pursuant
to section 3301.85 of the Revised Code do not apply unless and until the
General Assembly makes appropriations sufficient for such purpose.
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