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San Ysidro School Superintendent’s Resignation Payout Criticized

September 15, 2017

By Eduardo Rueda / Investigative Reporter

Photo/Mario A. Cortez

Legal tensions increased at the San Ysidro School District this week amid a widening scandal that led to the abrupt resignation of Superintendent Julio Fonseca less than two weeks ago.

On Thursday, local taxpayer watchdog group San Diegans for Open Government (SanDOG) delivered a letter requesting that the District immediately file a lawsuit against Fonseca to recover money paid to him this week under a separation agreement approved by the Board two weeks ago.

“On behalf of San Diegans for Open Government, I am writing to request that the San Ysidro School District (“SYSD”) promptly commence litigation against Julio Fonseca to recover all sums recently paid to him under that certain Separation Agreement and General Release dated September 1, 2017 along with the health-insurance benefits and other consideration given to him upon termination,” wrote attorney Cory Briggs.

The SanDOG letter criticized the Board for having agreed to pay out nearly $400,000 to Fonseca upon his departure two weeks ago.

A special board meeting on Sept 1 was called to discuss allegations brought against Fonseca by his former girlfriend and District employee, Alexis Rodriguez. Rodriguez was hired on December 2015 to oversee the District’s before- and after-school program.
Fonseca and Rodriguez carried on a dating relationship before and during her District employment.

Late last month, Rodriguez filed a complaint against Fonseca citing harassment, and that report led to the special meeting on September 1.

The agenda for that special meeting only contained one item: Public employee discipline, dismissal, release, reassignment. The item did not specify the name of the employee or any potential legal settlement.

After a four and a half hour closed door meeting among the Board and its lawyers, Board President Rosaleah Pallasigue announced that “the Board, on a 5-0 vote, accepted the resignation of the Superintendent, in exchange for 18 months compensation and release of all claims.” Pallasigue cited a “personal reason” for Fonseca’s sudden resignation.
The SanDOG letter claims that Fonseca’s employment agreement only allows for a severance payment if the District terminated his agreement before its expiration date. An amendment last year extended Fonseca’s contract to expire on June 30, 2020.

Fonseca’s employment agreement states that he could resign, and that the agreement could be terminated by mutual consent with the District, but the provision requiring a severance payout would not be triggered in either case.

But, the separation agreement approved by the Board on Sept. 1 states that Fonseca “submits his voluntary and irrevocable resignation from the District,” and that “pursuant to the Employment Agreement, the District shall make a one-time, lump sum payment in an amount equivalent to eighteen months of his current annual salary.”

Attorney Briggs’ letter paints the Board into a corner because, if it fails to recover the money from Fonseca, the Board members could be on the hook for the money themselves.

“The individual members of the Board are also personally liable to the taxpayers for the monies illegally paid to Mr. Fonseca under Stanson v. Mott,” the letter states. “The Board did not take reasonable steps to avoid authorizing expenditures that violate the Employment Agreement.”

The letter also put the Board members on notice that they could be criminally liable for an unlawful expenditure if Fonseca had not resigned and the documents were proven to be false.

“If, on the other hand, it is not true that Mr. Fonseca resigned – that is, if the representations in the Severance Agreement and in the Interim Superintendent’s letter to the SDCOE were known to be false – then every one of you could face felony prosecution…,” the letter concluded.

During the school board’s regularly scheduled meeting Thursday, Board member Rodolfo Linares said the Board initially wanted to place Fonseca on administrative leave during the September 1st meeting, but that Fonseca wanted to be bought out of his contract.

“To my surprise, at the beginning of the meeting, [Board President] Pallasigue informed the Board that Dr. Fonseca did not accept, and wanted to resign and get a payout,” Mr. Linares said during this week’s meeting. “Such agreement was already negotiated with the President, Dr. Fonseca, and the Fagen, Friendman & Fulfrost law firm to the tune of about $400,000,” he added.

Mr. Linares said he felt free to discuss what had happened in the closed session meeting because he now realizes the item was not properly agendized for discussion.

The SanDOG letter requests that the District initiate a lawsuit to recover the money in concert with SanDOG, but, if the District fails to act, SanDOG plans to file suit directly.

“For these reasons, [SanDOG] urges the Board to act quickly and authorize a lawsuit against Mr. Fonseca,” the letter states. “However, if SYSD does not commence litigation against Mr. Fonseca within four weeks, [SanDOG] will also file a lawsuit against individual board members in order to ensure that the taxpayers are fully protected from the consequences of unreasonable mistakes that could easily have been avoided had the Board been acting prudently and transparently.”

Fonseca is already facing a lawsuit filed by SanDOG in March, alleging Fonseca negotiated and transacted a $114,000 payout in 2016 to a former employee in order to coverup the relationship with Rodriguez.

The lawsuit claims the payment was illegal and, under state law, Fonseca could be held criminally liable. That former employee claimed he was wrongfully fired after making comments about Fonseca’s relationship with Rodriguez to District officials. Although he never filed any claim or lawsuit, Fonseca secured a settlement with him for one year salary plus benefits. The SanDOG lawsuit claims the Board never approved that settlement, and that Fonseca acted without authority in issuing the settlement payment. The case is pending in San Diego Superior Court.

In a similar case, the former Superintendent of Beverly Hills School District, Jeffery Hubbard, was convicted last year of two felonies for approving a $20,000 bonus and $500 monthly car allowance for a female employee. The Hubbard case has now become the standard for prosecuting school superintendents for unauthorized appropriation of district funds.
Critics compared the severance payment to Fonseca to a payment given to former Superintendent Manuel Paul in 2012 when he resigned after being indicted on corruption charges.

Mr. Paul resigned in 2013 after he was indicted for his part in a wide-ranging corruption scandal that included 15 other school officials. The District agreed to pay Paul more than $211,000 at the time he resigned, but he committed publicly to return the money if he was convicted of any wrongdoing.

Paul later pled guilty to coercing a contractor into giving him $2,500 in cash while Superintendent. Paul served 60 days in federal custody, paid a $5,000 fine, and completed one year of probation.

The District sued Paul to recover the payout. The case, first filed in February 2015, is still pending in San Diego Superior Court.

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