Los Angeles News Group / Daily Breeze

Superintendent’s Salary Raises Eyebrows

‘Magnificent’ deal outrages Centinela Valley teachers

Serving 6,800 students, the struggling Centinela Valley high school district straddling Lawndale and Hawthorne is about 1 percent the size of the sprawling Los Angeles Unified School District.

And yet, the employment contract for its superintendent, Jose Fernandez, is about as lucrative as that for LAUSD Superintendent Ramon Cortines, who presides over the second-largest school district in the United States.

To be fair, Cortines has made a political point of accepting an austere salary by LAUSD standards. He takes home $250,000, even though the position normally pays $300,000. He receives no stipends.

Officially, Fernandez’s salary is set at nearly $199,000, plus his annual longevity bonus adds about $18,000 to that total. With stipends, his yearly total is $241,000 – just $9,000 shy of what Cortines earns.

The subject of Fernandez’s three-year contract has been a sore spot with teachers ever since it was ratified by a newly elected school board one year ago. But last week, the South Bay Teachers Union upped the ante, publicly lambasting Fernandez in its December newsletter about not only his contract, but also his personal financial woes.

The issue comes at a sensitive time for public servants and educators in California. Already battered by the lousy economy, school districts across the state are expecting another storm, with Gov.-elect Jerry Brown saying last week that the enormity of the current budget deficit is “unprecedented in my lifetime.”

For its part, the teachers union in Centinela Valley has an ax to grind. Specifically, members are upset that the district this year involuntarily transferred 15 percent of all its teachers from one to another of the district’s three high schools: Lawndale, Hawthorne and Leuzinger. The union believes the move was retaliatory, and has filed an unfair labor practice with the state Public Employee Relations Board. The case is pending.

As for the newsletter, it spotlights the provision in Fernandez’s contract that entitles him to receive a housing loan from the school district. Specifically, the loan would come with a fixed 2 percent interest rate and give him 40 years to pay it off.

The amount of the loan could go as high as 150 percent of the average cost of homes in the ZIP code in which he’d like to buy. So if he wanted to purchase a home in a place where the average cost is $1 million, he’d be entitled to a loan of $1.5million. (LAUSD’s Cortines declined to accept a housing allowance.)

“When you look at the economy and look at the community – this is a struggling community,” said Sandra Goins, executive director of the South Bay United Teachers. “(Fernandez) could choose to live in Manhattan Beach, and the district would be on the hook for millions of dollars. … How on earth is that in the best interest of students?”

By one local real-estate professional’s count, the terms of the loan are “magnificent.”

“There’s nothing like that available to anyone, anyplace,” said Warren Snyder, co-owner of Carriage Realty & American Broker Loans in Rolling Hills Estates. “I wish I had a lender that would offer those terms to my clients. I could be a millionaire again.”

Snyder said it’s more typical for lenders to offer loans with a 5 percent interest rate, 30-year amortization schedule and in an amount not to exceed 97percent of the cost of the house.

Fernandez, normally an accessible and approachable public figure, did not respond to repeated requests for comment on this story.

His supporters point to how he has played a key role in turning the district around from the brink of bankruptcy. Test scores at the district – one of the lowest-performing in Los Angeles County – have improved over the past year. Unlike many nearby districts, Centinela Valley did not endure widespread teacher layoffs last year. And the district, under his watch, has successfully floated two construction bonds since 2008 for $98 million each.

“We’ve had some success,” school board President Hugo Rojas said.

District officials say Fernandez has not exercised the home-loan option. Public records put Fernandez’s home address in the ZIP code of Ladera Heights, which is widely known as the “black Beverly Hills.” (Fernandez is not black.)

Fernandez isn’t the highest- paid superintendent in the South Bay. That distinction belongs to Steven Keller of the K-12 Redondo Beach school district, serving 8,400 students. While Keller’s base salary sits at $230,441, annual stipends bump up the total to nearly $247,000, said Nancy Billinger, the district assistant superintendent of human resources. (Keller has frozen his scheduled raises in each of the past three years. This has meant a net loss of $79,673, she said.)

As for Fernandez, another unique provision in his contract is the one requiring a super-majority of board members – four out of the five – to fire him.

The board approved the contract unanimously about a year ago. In addition to Rojas, it includes Maritza Molina, Rocio Pizano, Gloria Ramos and Sandra Suarez.

Three of them – Rojas, Molina and Pizano – had just been sworn in. They are the same three whose campaigns for election in 2009 were largely financed by a construction company named TELACU.

They prevailed over the candidates favored by the teachers union. In its sharply worded December newsletter, the union derides them as the “bored majority,” and accuses them, in so many words, of being a rubber stamp.

“The `Bored’ will not read any material provided to them for themselves,” it states. “One was heard to say that it bores her.”

Perhaps lending some credence to this criticism is Rojas’ response to the contract. Asked last week about the super- majority provision, he said “that is news to me.” Rojas also said he was unfamiliar with the details of the housing provision.

The newsletter also mentions that Fernandez filed for personal bankruptcy in June. Goins said she believes this to be relevant because the school board has entrusted him with an unusual amount of power.

“It’s troublesome because you would expect checks and balances and there are none,” she said. “Not only does it speak to his ability to manage, but it also speaks to your own vulnerability when entrusted with millions of dollars.”

Rojas said he takes exception to the “disrespectful” tone of the union’s criticism.

“You don’t do those kinds of things if you want to work with another person,” said Rojas, who previously served on the Hawthorne school board. “The proper way to work with the superintendent is you sit down, establish goals and then hold an evaluation to hold him accountable on performance.”

One board member said she has regrets. Sandra Suarez said she wishes she’d paid closer attention to the document she was approving.

“I have a degree in art – I’m not a business person,” she said. “Now I can see where he gave himself way too much power. If that ever happens again on a contract, I have learned. I don’t care whether I’m a business major or not, I’m going to examine that.”

In addition to Fernandez’s base salary of $198,938, his additional compensation includes:

A 9 percent “per annum” bonus for longevity because he’d served the district in other capacities. This amounts to about $18,000 a year.

$1,000 monthly ($12,000 annually) in out-of-pocket expenses without receipts.

$2,500 annually for a post-graduate degree.

$600 a month ($7,200 annually) for auto expenses.

$200 a month ($2,400 annually) for cell phone expenses.

An annual salary increase by an amount “not less than the increase in the Consumer Price Index for Los Angeles County.”

Reimbursement for travel expenses any time he travels more than 50 miles outside of the district.

Thirty days of vacation and 24 sick days.