AB 885 (Honda) – Elected STRS Board

Assembly Bill

This bill would require that the four “teacher” members of the Teachers’ Retirement Board (Board) be elected to the Board from their respective constituencies rather than appointed by the Governor.

  • Location: Vetoed 9/29/1997
  • CalSTRS Position: No Position
  • Proponents: California Teachers’ Association and Association of Retired Teachers (Co-sponsors), California Federation of Teachers, California Retired Teachers’ Association, and Faculty Association of California Community Colleges
  • Opponents: Unknown at this time
  • Analysis: As Introduced 02/27/1997

BACKGROUND

The Board did not take a position on any of the following measures which also would have required election of the four State Teachers’ Retirement System (STRS) members of the Board:

  • 1996/SB-168 (Hughes): died in Assembly Policy Committee
  • 1994/SB-277 (Hughes): vetoed
  • 1991/AB-216 (Hughes): died on Assembly Floor
  • 1990/AB-2642 (Elder): vetoed
  • 1988/AB-3194 (Elder): vetoed

CURRENT PRACTICE

STRS is administered by a 12-member Board. Four members are State constitutional officers or ex-officio members; and the following eight members are appointed by the Governor, for four-year terms:

  • * Two persons who are active members of the System and are classroom teachers in kindergarten or grades 1 through 12;
  • * One person who is an active member of the System and a community college instructor with expertise in business, economics or both, and who is selected from a list submitted by the Board of Governors of the California Community Colleges;
  • * One person who is a retired member of the System;
  • One person who is a member of the governing board of a school district or a community college district;
  • One officer of a life insurance company;
  • One officer of a bank or savings and loan institution;
  • One person representing the public.

* Proposed to be elected

DISCUSSION

Specifically, AB-885 would make the following changes:

  1. Require that the three active teacher members and the System retired member be elected from and by the groups they represent. Two of the active members would be classroom teachers–one a teacher of grades K-6 and one a teacher of grades 7-12. These members would be elected by the active members who are classroom teachers in K-12. The community college instructor would be elected by the active community college members of STRS.
  2. Eliminate the requirement that the community college instructor have expertise in business, economics, or both.
  3. Require that the school board member be appointed by the Governor from a list submitted by the State Superintendent of Public Instruction. Currently, the law is not specific regarding origination of a list from which the school board member is appointed.
  4. Adjust the 4-year term expiration dates of the members who would be elected to end on December 31 of the year the terms would have expired.
  5. Make a $62,500 appropriation from the Teachers’ Retirement Fund effective January 1, 1998, for the remainder of the 1998-99 fiscal year to establish a full-time position to implement the election process and for other associated costs.

This bill specifies that the terms of the elected Board members would commence upon the expiration of the term in existence on January 1, 1998, and would require the Board to adopt regulations for conducting the elections. Staff have estimated that a minimum of twelve months would be required to complete the process for development and adoption of regulations.

Staff believes that an effective date of January 1, 1999 would be more appropriate to assure that sufficient time is allowed to properly implement the provisions of this legislation, if enacted.

The bill also specifies that one of the classroom teacher members of the board shall be elected by active teachers in kindergarten through grade 6 and the other classroom teacher member shall be elected by active teachers in grades 7 through 12. Statistical data reported by the employers and maintained by STRS’ current data processing system does not identify the grade level being taught by active teachers. Significant effort would be required by both the employers and STRS to comply with this provision of the bill prior to the conversion of STRS’ data processing system to the new system currently being developed by the State Teachers’ Automation Redesign Team (START). Once the conversion to the new system is completed (expected March 1999), STRS could more easily modify the system to collect and maintain the data necessary for conducting the elections as specified. In addition, the bill does not include school administrators, who are also active members of the System, among the members eligible to participate in the election.

Supporters of this legislation in the past have argued that elected Board members would be more responsive to the System’s membership. Opponents have contended that such responsiveness is not necessarily good on a Board which controls the assets and benefit levels of a retirement system. In the veto message of prior legislation (SB-277, Hughes), the Governor stated, in part, that there is no need to substitute the current appointment process for a cumbersome election process costing the Teachers’ Retirement Fund $125,000 a year.

FISCAL IMPACT

Program – None

Administrative – Based on the Public Employees’ Retirement System’s experience with Board elections, STRS has estimated administrative costs of approximately $500,000 per election cycle, or $125,000 per year. The annual costs would vary from year-to-year according to the Board composition under election. The bill would appropriate $62,500 to establish a full-time position effective January 1, 1998, for the remainder of the 1998-99 fiscal year. This amount is based on a prior year’s estimate of personal services. STRS recommends increasing that amount to $76,000, consistent with current year salary and benefit costs.

POSITION

None – Consistent with current policy, the Board does not take a position on legislation which concerns its composition; however, staff recommends amendments to allow school administrators from their respective constituencies to participate in the elections, and increase the funding for the 1998-99 fiscal year to adequately provide for personal services.

Assembly Bill 885 posted: June 26, 1997

 


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