Alum Rock School District sues former board members for payments | #Education

An East San Jose school district long plagued by accusations of financial mismanagement is suing four former board members for allegedly refusing to return the “excessive and wasteful compensation” the district mistakenly paid them.

In the recent lawsuits filed in Santa Clara County Superior Court, the Alum Rock Union School District is seeking reimbursement for paying too much in health and welfare benefits to former board members Karen Martinez, Esau Herrera, Dolores Marquez and Khanh Tran. The lawsuits allege they each owe the district more than $10,000.

California law states that benefits paid to members of a legislative body cannot exceed the “most generous” benefits given to employees of the agency they oversee.  Alum Rock paid 100% of benefit premiums for board members and 85% for district employees.

The school district, which over the past half-decade has weathered investigations, state audits and corruption allegations, discovered the error early last year during an “internal review” of benefit premiums, according to an email sent to Herrera by Carlos Moran, Alum Rock’s assistant superintendent of human resources.

In April 2020, the district sent letters to current and former board members who had opted into its benefits system, informing them of the mistake and requesting that they pay back the extra money. The district then sued those it says refused.

The lawsuits claim the four former board members “violated the public trust and breached their fiduciary duties to the district and the public” when they accepted the “excessive and wasteful compensation” and later refused to repay it despite being notified the overpayments were illegal.

Alum Rock enrolls about 10,200 students from mostly Latino and low-income families across 28 elementary and middle schools in East San Jose, according to the latest figures from the state Department of Education. It is governed by a five-member board of trustees.

It has been been embroiled in several controversies in recent years, from district leaders obtaining restraining orders against each other to investigations into fraud and conflicts of interest to reports of millions of dollars misspent under the board’s poor oversight on school construction projects and botched dealings with Del Terra Real Estate Services.

Herrera, Tran and Dolores were all accused of managing the district and their relationship with Del Terra poorly, and a civil grand jury in 2018 urged them to resign.

To balance the Alum Rock’s budget in recent years, the school board in 2019 decided to go without school librarians and in May voted to close two middle schools — Clyde L. Fischer and Lee Mathson — at the start of next school year.

When reached for comment this week, Herrera and Martinez said they were “surprised” and “puzzled” by the lawsuits but they planned to return the overpayments. Marquez and Tran could not be reached for comment.

According to emails reviewed by this news organization, Herrera responded to the district’s initial request in late April 2020 by saying he would “be glad to engage in a discussion” about the overpayment but needed more information, such as the amount paid in health and welfare benefits to each assistant superintendent and superintendent during the time period in question.

He got a quick reply from Moran two days later saying that he would follow up with a date and time to discuss the matter and then heard nothing until the lawsuit was filed, according to Herrera.

“I don’t have a lot of confidence in the fiscal efficiency and information, so I just want to understand how they came to this conclusion,” he said. “Of course if it is my responsibility, I will meet my responsibility. But so far, I am still waiting for the information I have requested.”

Martinez, who now sits on the the San José-Evergreen Community College District Board of Trustees, said she has requested to set up a payment plan with the district.

“I don’t have the ability to pay that back within a couple of months,” she said. “But I am going to pay it back simply because I care about the students and the district. I just hope everyone is paying it back as well.”



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