SPECIAL ED TAKEOVER EXPENSIVE AREA SCHOOLS MAY OWE STATE $15 MILLION UNDER NEW LAW.

Byline: KAREN MAESHIRO Staff Writer

Fourteen school districts in the Antelope and Santa Clarita valleys potentially stand to lose about $15 million.

Officials say a new law would unfairly penalize the districts for taking over the operation of special education programs for severely disabled students from Los Angeles County.

School officials said the law, Assembly Bill 2947, would require districts to repay the state for part of the cost of constructing special education classrooms that were built with 100 percent state funding given to the county when it ran the programs.

``The law is saying the money that was approved by the state to build the classrooms, since you did a program transfer after the fact, you have to give money back. We believe there is no reasonable basis for that,'' Wilsona School District Superintendent Ned McNabb said. ``The districts don't have that kind of money.''

``This is going to be devastating to my districts,'' said Margaret Cherene, director of the Santa Clarita Valley special education local plan area, or SELPA. ``The districts would have to repay the state out of general fund money, out of money that we need to operate the schools and teach students.''

AB 2947 states that if the Los Angeles County Office of Education transfers title of the classrooms to the districts within 10 years of it being occupied, then the districts would have pay the state back.

The county still has title to the classrooms but wants to transfer it to the districts because the law says LACOE's eligibility for special education school construction funding, which was hurt by the transfer, can't be restored until the title transfer occurs.

County offices of education generally receive hardship funding from the state in which the state pays for the total cost of constructing school facilities when other resources aren't available. School districts pay 50 percent of the cost unless they qualify for hardship funding.

Ten Antelope Valley school districts could be out more than $12 million, and four elementary school districts in the Santa Clarita Valley could lose $2.3 million, based on the number of classrooms that were built.

The special education programs were transferred from LACOE to the districts between 2000 and 2004.

At the time school officials said the districts had grown to such a point that they commanded the resources to assume responsibility for providing such services.

The law was authored by termed-out state Assemblywoman Jackie Goldberg and approved last year.

Several superintendents are traveling to Sacramento at the end of this week to discuss the law with the Office of Public School Construction.

The districts are also seeking assistance from state Sen. George Runner and his wife, Assemblywoman Sharon Runner, Republicans from Lancaster.

``The way the law was written, there was some retroactivity to it and they put in a reimbursement requirement that doesn't make a lot of sense,'' George Runner said. ``The problem with the retroactivity, if they all knew, they would have either not done it (the program transfer) or made a different kind of agreement.''

Goldberg was not sympathetic to the districts' plight. She said the payback provision was put in the bill at the request of the OPSC.

``Let's say the county builds $7 million dollars worth of funding for schools. We have a program where districts pay 50 percent of the cost. Later the districts say, `We want to run it county, we are kicking you out and we will run it ourselves,''' Goldberg said. ``They are only entitled to $3.5 million. They had no eligibility to get 100 percent of the money. If they are going to run it instead of the county, they have to go by the rules as if they built it themselves.''

Goldberg said if the districts don't have the money to reimburse the state, they can give control of the special education programs back to the county.

``The inequity is people who run their own programs in their own districts for special education had to pay 50 percent. It doesn't matter they had no malicious intent. They would get an advantage over every school district who didn't do it that way.''

LACOE officials said they sought the legislation but did not intend for it to affect the districts.

The transfer of the special education programs led the OPSC to consider LACOE as having declining enrollment, which LACOE considered to be ``erroneous methodology.''

``It basically tanked LACOE's eligibility,'' said Kenneth Shelton, LACOE's assistant superintendent for business services.

When the local officials told the state of its dilemma, OPSC officials said the problem could be corrected through legislation, Shelton said.

The legislation included a provision where OPSC would recalculate LACOE's eligibility going back three years, Shelton said.

LACOE also suggested Goldberg insert language that when new county school facilities are built with hardship funding from the state, that no special education program transfer take place to a district for five years.

Shelton said that was proposed because there was a ``belief in Sacramento that there was collusion to scam the state.

``It was let's be reasonable and try to address the concern. If that was a true concern, then make a proposed way of dealing with it.''

What ended up in the final version of the bill was a surprise to LACOE officials, according to a letter from LACOE Superintendent Darline Robles to Newhall School District Superintendent Marc Winger.

``We had no advance knowledge of this approach. It was never our intent or expectation that the funding model for previously completed facilities projects be impacted while solving the calculation error with the status of our construction eligibility,'' Robles wrote.

OPSC officials disputed LACOE's version and said LACOE was fully aware of the amendment to the bill that contained the payback provision.

``OPSC has long been concerned with preserving a level playing field for all school districts in the use of those bond funds and making sure the potential doesn't exist for anyone to game the system unfairly and obtain bond money they are not entitled to,'' OPSC spokesman Bill Branch said.

``I want to be absolutely clear that, in saying this, we are not accusing anyone of gaming the system -- we are merely trying to make certain that adequate safeguards are in place.''

Any suggestion that the districts in north Los Angeles County did something intentional to gain classroom space free of charge couldn't be further from the truth, officials said.

``They think there was collusion, which wasn't the case. We took the program back. We didn't do it to try to get free buildings,'' former Lancaster School District Superintendent Steve Gocke said.