JEFFERSON COUNTY FINANCIAL EMERGENCY

1. JEFFERSON COUNTY FINANCIAL EMERGENCY 325 West Gaines Street Turlington Building, Suite 1244 Tallahassee, Florida 32399-0400

2. FINANCIAL EMERGENCY • Occurs when: • a district cannot pay the obligations it does not contest; OR • restricted, committed, or nonspendable funds fall below 2% of the projected revenues for the fiscal year AND the Commissioner declares a financial emergency based on the probability the district will not be able to meet its obligations • In a monthly financial report dated May 31, 2016, Jefferson County projected a negative financial condition ratio of (.083), triggering the requirement for the district to provide a financial plan • Jefferson County submitted two plans to avoid a financial emergency • Despite claiming a positive projected financial condition, neither plan was based on realistic assumptions nor did either propose actions that would reasonably allow the district to pay its obligations – therefore, a financial emergency was declared and a Financial Emergency Board (FEB) was appointed The FEB is designed to help the district craft a realistic plan of success – the Department of Education and the Board oversee plan implementation To avoid a declaration of financial emergency, the district must propose a financial plan that is reasonably likely to avoid the ultimate financial emergency:The Inability To Pay Its Obligations 2

3. FINANCIAL EMERGENCY • The financial plans provided by Jefferson County were not realistic. Among other problems and deficiencies, they: • Did not include funds to pay for an external operator to help run the schools as the district had proposed to the State Board of Education • Proposed cuts to instructional staff without corresponding cuts to district administrative staff • Included hypothetical energy savings of almost $69,000 from a new HVAC system (projected to cost $2,300,000) that had neither been purchased nor installed • Included fuel efficiency savings on buses that have not been purchased • Failed to reconcile previous audit findings • Claimed savings with no explanation of their source 3

4. FINANCIAL EMERGENCY AND TURNAROUND PLANS • Both schools in the district are in the turnaround process required for low performing schools. In addition to a financial plan, the district must propose educational turnaround plans that are more likely than not to improve the schools to a grade of C within two years • One role of the FEB is to assist the district in finding the money to fund an acceptable turnaround plan The unique challenge is to balance urgent educational needs with realistic financial constraints 4

5. FINANCIAL EMERGENCY • As a result of the lack of funds reported by the district and the absence of a potentially viable financial plan, on August 10th the Commissioner found the district to be in a state of financial emergency and took steps to appoint a FEB as required by statute • To prevent further financial deterioration, the Commissioner immediately took the following actions and imposed the following limitations: • District budget must be approved by the Commissioner • District is prohibited from issuing new debt including bonds, notes, etc. • District must permit inspection of records and assets • District must cooperate in inspection and reviews • Expenditures budgeted in capital projects funds must be postponed • The District must expend funds only per advertised 2016-17 budget • No new financial obligations may be incurred unless necessary for student health, safety, or welfare • Spending and reconciliation plans are due to the Department each month The Commissioner’s actions and limitations are stopgap measures pending the Financial Emergency Board’s recommendations 5

6. FINANCIAL EMERGENCY BOARD POWERS • Determine what is needed to bring the district into compliance with statutory requirements • Review the records, assets, liabilities and financial plans of the Jefferson County school district • Review the district’s operations, management, efficiency, productivity, and financing of functions and operations • Consult with other governmental entities to recommend consolidation and streamlining of services and elimination/curtailment of identified functions • Submit reports and make recommendations to the Commissioner of Education and the State Board • Make rules for conducting FEB business 6

7. DISTRICT RESPONSIBILITIES • Cooperate fully with the Financial Emergency Board • Timely provide access to documents and subject matter experts • Develop a recovery plan, in consultation with the Financial Emergency Board, that meets the district’s financial obligations, including turnaround plans for low performing schools • Implement the final financial recovery plan Basic idea is that the district must participate in the process as directed by the FEB and the Department to reach the best possible outcomes for the students and the taxpayers 7

8. GOVERNMENT IN THE SUNSHINEOPEN MEETINGS • Florida has broad open meetings and public records laws that the FEB must follow • A meeting is any gathering of two or more FEB members to discuss some matter which may foreseeably come before the board for action. • Meetings must be open to the public • Reasonable notice must be provided • Applies to formal meetings and to informal encounters or discussions • A “meeting” can include: • telephone calls • written correspondence between committee members • e-mails • texts • communicating through a liaison 8

9. GOVERNMENT IN THE SUNSHINEOPEN MEETINGS The use of a written document by one member to inform other members of a subject which will be discussed at a public meeting can be permissible BUT prior to the meeting there can be NO interaction related to the document among the members If you have a document that you want to distribute to other members, please send it to: Link Jarrett 325 West Gaines Street, Room 1202 Link.Jarrett@fldoe.org Tallahassee, FL 32399-0400 He will distribute the document Members can seek information, advice and input from staff – they cannot communicate with each other outside of the public meetings. Thus, staff cannot act as a communication conduit from one member to another Non-disruptive videotaping, tape recordings, or photography is allowed at public meetings Since 2013, with limited exceptions, the public must be given the opportunity to be heard before board or commission takes official action 9

10. PUBLIC RECORDS It is the policy of the state that all state, county, and municipal public records shall be open for personal inspection by any person. “Record” means: • All documents, papers, letters, maps, books, tapes, photographs, films, sound recording, data processing software or other material, regardless of physical form or means of transmission, made or received in connection with the transaction of official business • Includes any document prepared or received in connection with official business of the agency to perpetuate, communicate or formalize knowledge • Even records that do not reflect the official position of the FEB or that are inaccurate are public records • The Florida Supreme Court has interpreted public records to encompass all materials made or received by an agency in connection with official business which are used to perpetuate, communicate or formalize knowledge. 10

11. PUBLIC RECORDS • Your notes intended for your own personal use in remembering something are not a public record, if the notes are not circulated and are not used to formalize, perpetuate or communicate knowledge • Drafts which are not circulated for review, comment, and revision are not public records but there is no generalized “draft” exception • Do not use personal phone text messages to conduct FEB business BOTTOM LINE: The best policy is to assume that everything written, recorded or produced in connection with FEB business is a public record 11

12. PROVIDING PUBLIC RECORDS • The law requires that every person who has custody of a public record permit the inspection and copying of a public record at a reasonable time and under reasonable conditions. • No showing of purpose or special interest is required to review the record • Cannot require the requestor to produce identification as a condition of providing records • A request need not be in writing • There is no specific time limit for compliance with public records requests • The only delay permitted in producing records is the reasonable time needed to retrieve and redact exempt or confidential information • An agency is not required to answer questions or give out additional information under the public records law – the document speaks for itself • An agency is not required to create a record under the public records law – only to produce an existing record The Department will review any requested records before providing them 12

13. WHEN YOU RECEIVE OR CREATEA PUBLIC RECORD OR A REQUEST FOR PUBLIC RECORDS… Please send a copy to: Link Jarrett 325 West Gaines Street, Room 1202 Link.Jarrett@fldoe.org Tallahassee, FL 32399-0400 and he will maintain all the public records in a central location and respond to requests as necessary 13

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