Title
February 14, 2002
The Honorable Anna C. Verna
City Council President
Room 405, City Hall
Philadelphia, PA 19107
Dear President Verna:
As Council prepares to vote today on Bill Nos. 010617 and 010666, as amended, I write
to share my thoughts about the legality and effect of these proposed ordinances.
Let me say first, as local Secretary of Education Debra Kahn testified on behalf of my Administration on January 30, I understand that the intent of these bills is to provide City Council and parents with a meaningful say in the future direction of public education in our City. Together, we recognize and respect the profound stake that parents have in their children's schools and believe that their voices should be heard in important matters, including decisions about engaging private entities to manage schools. The fact is, however, that the legislation under consideration would neither expand Council's authority over the operation of public education, nor guarantee a role for parents in the decision-making process.
The City Solicitor has written an opinion on these amended bills, which I am enclosing for your review. He concludes that because the bills go beyond Council's powers of appropriation and taxation to impose restrictions and regulations on the executive branch and the School Reform Commission (SRC), they are unenforceable.
In addition to the legal problems with these ordinances, however, I am concerned that they create confusion and misperceptions about the new City-State governing partnership for the School District. While the transition is underway, there is understandably a good deal of anxiety about what is to come. Some of this uncertainty is inevitable as the SRC is undertaking a tremendous amount of new work and not every question has an answer yet. But as public officials, I believe that we have a responsibility to provide accurate information and avoid misrepresentations and misleading actions.
For example, Bill No. 010617 seems to suggest that the partnership agreement I negotiated with Governor Schweiker launched the state takeover of the Philadelphia School District by permitting the SRC to supersede the Board of Education. The bill also implies that the agreement authorizes the private management of School District operations and individual schools. In fact, the partnership agreement does not do these things because I would not choose to do them, and because I do not have the authority to take those actions anyway. The SRC was actually installed pursuant to the Pennsylvania School Code, when the Secretary of Education declared our School District to be "financially distressed", effective December 22, 2001. It is also state law (Act 46 as amended) that grants to the SRC the authority to contract for private management of any aspect of the School District.
I know that many parents and other citizens continue to feel strongly that our schools should remain in exclusive local control. I share that preference. But I also ask people to consider that our new arrangement is the best alternative we have at this time to achieve the reforms and progress we all want. The City alone cannot afford to meet the enormous financial challenges confronting the School District, not even to balance the budget let alone to provide the smaller classes, technology, well-trained and supported teachers and other educational supports our children need to succeed. Last summer, knowing that we would not have sufficient cash to complete the current school year, we faced two painful choices: slash school spending to unimaginable levels or allow the Commonwealth to take over the District and fully implement its own plan for our schools, which without a doubt would have been an extremely hostile and disruptive situation. I concluded that the best course for our City was a third option: to negotiate the most favorable terms, the timing and the conditions, under which the inevitable state takeover would occur.
As a result, we have a partnership agreement that assures the City a significant and sustained say in the policies of the School District, offers the prospect of essential new funds while protecting the City treasury by capping our financial commitment, preserves fundamental educational services and provides the opportunity for some stability and academic improvement until we reach the ultimate goal of statewide school funding reform. As I have said before, questions remain to be answered and there will be SRC decisions with which we disagree. But the Governor and I did succeed in creating an arrangement that in my judgment is absolutely in the best interests of the children and families of our City.
If Council passes these bills, I am most disturbed by the fact that public school parents may believe that they actually will be given a vote on privatization contracts for individual schools. Since Council does not have the power to determine the features or requirements of the SRC's contracting procedures, parents should have no such assurance. I believe that it is critical to develop mechanisms for the opinions of parents, students and other community members to be heard as the SRC makes vital decisions, not only regarding school privatization, but also on an ongoing basis. My appointees to the Commission hold this view and I have discussed the subject with Chairman James Nevels as well. We do not need legislation that would mislead parents into thinking that the issue is resolved. Instead, we need Council, parents and other advocates to engage the SRC to ensure that effective vehicles for community input are created and used. I am encouraged that recent statements by Commission members indicate their intent to do so.
My final concern regarding the ordinances under consideration, even though passage would give them no legal effect, is their potential to spawn litigation and thereby cause disruption and delays during a particularly sensitive time for the School District. It is possible that any lawsuits, no matter how weak, that are brought to compel enforcement could jeopardize the deficit funding bond issue planned for the spring, as well as the appropriations we seek in both the General Assembly and City Council.
Rather than add to the confusion and create diversions, I encourage you to join me in attempting to provide clarity and stay focused on key concerns as the SRC goes about its work. For example, there needs to be a level playing field among schools for funding, assessment and accountability no matter who the school providers are. The SRC needs to recognize both school successes and failures, and act on their causes. We need to listen to students, parents, teachers and other stakeholders who know our schools first-hand and who will live with the decisions that are made. We need to be united and vigilant in our advocacy for the only real long-term solution for our schools, statewide funding reform.
I do believe it is important to send a clear message to the SRC that our City government is very concerned that parents and community members have appropriate involvement in school decision-making. If I am not satisfied that the SRC has taken sufficient actions in this direction, I am willing to work with Council to seek appropriate legislative authorization from the General Assembly, so long as that authorization is consistent with the division of authority between the executive and legislative branches provided in our Home Rule Charter.
With the ongoing, constructive commitment of City Council, I am confident that Philadelphians will continue to have a strong and effective voice in determining the future of public education in our City.
With warm personal regards, I am
Sincerely,
John F. Street, Esquire
Mayor
Enclosure
Cc: Governor Mark Schweiker
Members of City Council
Members of the School Reform Commission
City of Philadelphia
Law Department
MEMORANDUM
Privileged and Confidential Advice of Counsel
TO: Debra Kahn, Secretary of Education
FROM: Nelson A. Diaz, Acting City Solicitor
DATE: February 8, 2002
SUBJECT: Bill Nos. 010617 (as amended), 010666 (as amended)
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You have asked for an opinion on the effect and validity of two pending bills in City Council, as amended by the Rules Committee on January 30, 2002. In particular, you have asked whether the amendments adopted by the Committee change or affect the conclusions I reached in my opinion dated January 29, 2002, which addressed these two bills prior to the recent amendments. The answer to your question is: yes, my opinion regarding the effect and validity of these bills is significantly affected by the amendments, as the amendments make clear what was not clear previously, viz., that Council is attempting to intrude into matters beyond its purview. These two bills reflect Council's understandable concern regarding the critically important decisions affecting the School District of Philadelphia today. As explained in more detail below, however, Council's critically important role in those decisions is generally limited to exercising its appropriations power and taxation power. Because these bills go beyond those powers, it is my opinion that these bills are unenforceable.
Each bill, as amended, addresses two categories of contracts -- (i) contracts that require Council appropriations or Council imposition or authorization of taxes; and (ii) contracts that call for payments "from" funds appropriated by Council or "from" taxes imposed or authorized by Council. (Prior to the amendments, the bills clearly addressed contracts in category no. (i), but were unclear as to whether they reached into category no. (ii).)
Bill No. 010617, as amended, provides that any contract falling into either category no. (i) or category no. (ii) identified above must be approved by City Council prior to execution, if it is either (in summary) (a) between the City and the Commonwealth "relating to the operation, financing or management of the School District" and "provides for the School Reform Commission to substitute for or supersede the functions of the Board of Education"; or between the School Reform Commission and an education provider or other entity, (b) "for the operation, financing or management of the School District or any part thereof," (c) for consultant services relating generally to the structure and delivery of educational or other services, or (d) "which will substitute for or supersede the functions of the Board of Education."
Bill No. 010666, as amended, provides that any contract falling into either category no. (i) or category no. (ii) identified above must be approved by a certain percentage of parents of schoolchildren prior to execution, if it is an agreement "for the private administration, management or operation of any school within the School District."
As explained in more detail in my January 29 opinion, contracts falling into category no. (i) identified above are, by definition, subject to Council approval, in that only Council has the power to appropriate City funds or to authorize or impose the taxes covered by the bills. Thus, to state that any contract requiring Council appropriation or requiring Council authorization or imposition of taxes must be approved by Council is tautological, and imposes no new requirements not already provided in the Home Rule Charter. No one other than Council can appropriate City funds, or authorize or impose taxes by the Council.
Conversely, however, as also explained in my January 29 opinion, contracts falling into category no. (ii) identified above are wholly outside of Council's purview. Council has the exclusive and sole power and prerogative to appropriate funds or authorize taxes. Once funds are appropriated or authorized by Council, however, Council has no power to control the expenditure thereof (other than to insist that they be spent only in accordance with the appropriation); the expenditure of Council-appropriated funds is the prerogative of the Executive and Administrative Branch of government, subject only to the broad lump-sum categories Council may ordain under the Home Rule Charter. See generally Opinion No. 96-7, 1994-96 City Solicitor's Opinions at 207 (contracting decisions of the Executive and Administrative Branch of government are beyond Council's legislative purview) (citing prior opinions).
Hence, it is my opinion that any restrictions imposed by ordinance with respect to contracts falling into category no. (i) impose no new requirements and therefore will have no legal effect, and any restrictions imposed by ordinance with respect to contracts falling into category no. (ii) are outside the scope of Council's powers and therefore are unlawful, unenforceable and will have no legal effect.
The bills, however, suffer from several significant further flaws. In particular, the contracts covered by subparagraphs (b), (c) and (d) of Bill No. 010617 (described above) all concern contracts of the School Reform Commission, an entity created by, and the powers and duties of which are defined by, state law (in particular section 696 of the Public School Code, 24 P.S. § 6-696). State law invests the School Reform Commission with the responsibility to govern the affairs of the School District. Id. It is axiomatic that Council has no power to supervise or subject to Council control the affairs of another governmental entity, particularly one created and vested with express powers by the state. Even if this were not so, the City is expressly prohibited by the First Class City Public Education Home Rule Act from enacting legislation "regulating public education or the administration thereof." 53 P.S. § 13219(a)(2). The matters identified in subparagraphs (b), (c) and (d) of Bill No. 010617 are therefore beyond Council's purview. For this independent reason, therefore, these provisions are unlawful and unenforceable.
Moreover, subparagraph (a) (the only provision of Bill No. 010617 not covered by the discussion in the previous paragraph) is limited to contracts of the City that "provide for the School Reform Commission to substitute for or supersede the functions of the Board of Education." For similar reasons, no such contract can exist. The powers and duties of the Board of Education are defined by the Home Rule Charter and the Public School Code, and neither the Mayor nor the Council has any power to define, let alone "substitute for or supersede the functions of the Board," by legislation or by contract. No doubt, the functions of the Board have been superseded by the School Reform Commission, but this is pursuant to a declaration of distress issued by the Commonwealth's Secretary of Education, pursuant to section 691(c) of the Public School Code, 24 P.S. § 6-691(c), and not pursuant to any contract between the Mayor and the Governor. No doubt, the Mayor and the Governor have reached certain understandings regarding the conduct and composition of the School Reform Commission, but it is not the agreement of the Mayor and the Governor that "provide[s] for" the powers and duties of the Commission; the powers and duties of the School Reform Commission are defined entirely by state law (as enacted by the General Assembly), by the declaration of distress issued by the Commonwealth's Secretary of Education, and, to the extent incorporated therein, the Home Rule Charter. No doubt, in order to avoid unnecessary disputes and possible litigation, in order to promote cooperative rather than confrontational management, and in order to induce the state and City legislatures to increase funding for the District, the Governor agreed to accommodate certain concerns of the Mayor. Ultimately, however, there can be no doubt that the declaration of distress and the definition of the role of the Commission is entirely within the power and prerogative of the state, and was not and cannot be "provide[d] for" in any agreement of the Mayor. Therefore, it is my opinion that subparagraph (a) is a nullity, as there are no contracts that can fall within its ambit.
Unlike amended Bill No. 010617, which defines fairly carefully the contracts and the contracting parties covered by the ordinance, amended Bill No. 010666 remains somewhat unclear regarding what contracts and contracting parties are covered. In particular, the bill does not expressly state who is contemplated to be party to the contracts covered by the bill, i.e., contracts "for the private administration, management or operation of any school with the School District."
I read the bill to cover contracts of the School Reform Commission, as it is the Commission which now has the sole and exclusive power to manage the operations of the District, including management and operation of any school within the District, and therefore it is the Commission which has the sole and exclusive power (as defined and granted by the Public School Code) to determine when, whether and how any "private" management contract should be executed. Moreover, the bill provides for a detailed voting and approval process by parents of children registered at any particular school where privatization is contemplated, thereby strongly suggesting that the bill is concerned with individual privatization decisions at individual schools (or, perhaps, clusters of schools), and that the bill is not directly concerned with understandings (if any) between, say, the Mayor and the Governor, relating to privatization policy. Therefore, since the bill, as I read it, attempts to directly control the contracting authority of the School Reform Commission, it is subject to the identical legal impediment as discussed above with respect to subparagraphs (b), (c) and (d) of Bill No. 010617, viz., that Council has no power to control the affairs, including the privatization decisions, of the School Reform Commission. Indeed, the General Assembly has expressly vested the School Reform Commission with the power to enter into such privatization contracts. 24 P.S. § 6-696(i)(2). It therefore is my opinion that Council lacks the power to regulate the contracting decisions of the Commission and, to the extent the bill covers only such contracts, the bill is unlawful.1
In conclusion, Council's powers with respect to matters affecting the critically important decisions facing the School District today are significant. Council retains the power to appropriate funds for any City "grants" to the District, and to authorize taxes to be levied by the District. (I recognize that section 696 of the Public School Code purports to severely limit Council's discretion in this regard, but there can be no doubt that any new and additional funds sought by the District, above and beyond those provided in prior years, are entirely within Council's discretion.) In considering requests for appropriations or tax authorization, Council certainly has the right and power to conduct hearings and investigations. This power of the purse cannot be understated in its importance or significance. Council, however, once it has exercised (or declined to exercise) its power of the purse, does not retain any residual power to control the expenditure of funds authorized. Moreover, expenditures and expenditure decisions made by the School Reform Commission, an entity created by, and the powers of which are defined by, the General Assembly, and which is charged with the administration, management and operation of the School District, are clearly outside of Council's purview. As I read the amended bills as intruding into these prohibited areas, it is my opinion that these bills, as amended, extend beyond Council's power to legislate.2
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1 Because, prior to the recent amendments, I read Bill No. 010666 to cover only contracts in category no. (i), i.e., contracts that require appropriations or taxation by Council, I read the bill in my prior opinion as covering contracts by the Mayor, and I opined that, to the extent the Mayor entered into a contract that required Council to appropriate funds or authorize or impose taxes, such a contract would be subject to Council approval. As amended, however, Bill No. 010666 now is expressly not limited to contracts that require appropriations or taxation by Council, but rather expressly includes and attempts to govern any contract that would call for expenditure of funds already appropriated by Council, or funds raised by Council-approved taxation. As explained in the text, supra, the amended bill is now clear that it is not focused on contracts of the City, but, rather, contracts of the Commission. For this reason, it is outside of Council's legislative power.
2 To the extent any portion of these bills could be read to cover matters within Council's purview, Bill No. 010617 merely re-states what already is required under the Home Rule Charter, viz., that no one can enter into an agreement that commits Council to appropriate funds or to authorize or impose taxes other than Council itself, and Bill No. 010666 merely states certain pre-conditions to obtaining Council approval (viz., parental approval), but would not bind even Council itself with respect to the decision to appropriate funds, i.e., a contract requiring the appropriation of funds still could be entered into if Council approves such a contract, regardless whether parental approval is obtained. Regardless, however, because the bills only cover matters governed by state law or matters relating to the operation or management of the School District, they go beyond Council's power.
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