South Bay schools chief faces firing, repayment of money

The suspended head of the Centinela Valley school district, who attracted public scrutiny because of his high compensation, now faces dismissal, the repayment of at least $200,000 and liability for back taxes.

The Centinela Board of Education voted Tuesday evening to move to fire Supt. Jose A. Fernandez, who was suspended with pay in April. The board said it was firing the superintendent for cause.

Separately, state and county auditors concluded in findings released this week that Fernandez was paid inappropriately when his earnings surpassed $750,000 last year.

Fernandez, 54, received more in compensation than district leaders who head the nation’s largest school systems. New York City schools Chancellor Carmen Farina oversees the nation’s largest district, with more than 1 million students, and makes $412,193. Los Angeles Unified Supt. John Deasy made $393,106 last year running the nation’s second-largest school system.

Fernandez’s district has 6,600 high school students spread across three campuses and two small alternative programs.

Fernandez could not be reached for comment Wednesday, but he has defended his record as well as the legality of his pay.

His contract withstood scrutiny from the Los Angeles County Office of Education, but analysts found repeated instances when Fernandez allegedly received more than the contract allowed for.

They concluded that Fernandez should reimburse the district for $9,000 in pay for unused vacation days; plus at least $41,000 and as much as $103,000 for “additional work days.”

The analysts also looked at two life insurance policies for which the district paid premiums. They concluded that only one of them was authorized in his contract and that Fernandez should repay $150,000 in premiums on the second.

The report also said Fernandez’s tax filing should reflect more income than previously accounted for. The premiums for the first insurance policy, totaling $252,569 through March, should have been classified as taxable income, county auditors decided. Likewise for part of the benefit of a 40-year housing loan fixed at 2%, which Fernandez used to buy a $910,000 home in Ladera Heights.

The report, dated July 7, was released in response to a California Public Records Act request.

The five-member Centinela school board, which met in closed session, voted unanimously to let him go. Board President Hugo M. Rojas said in a statement that he and his colleagues would not comment on the matter, based on the advice of counsel.

Interim Supt. Bob Cox also did not comment.

Fernandez’s contract allows for termination due to a “substantial and material breach,” but the firing cannot take effect until Fernandez receives a written statement explaining the grounds for his dismissal. Fernandez then has 10 days to address the issues. After that, the board is expected to vote again on whether to make the dismissal final.

The board also could release Fernandez without cause, but it would then owe him up to 18 months in severance pay.

Teachers union President Jack Foreman faulted the school board’s previous lack of diligence on Fernandez’s compensation, but praised its latest action.

“I am delighted to hear that Fernandez is being dismissed,” Foreman said.

Two other district employees, who worked in fiscal services, remain on paid leave for issues related to the Fernandez investigation.

The superintendent’s 2013 compensation was inflated by one-time payments totaling $230,000. These were reimbursements for his purchase of added seniority in state retirement systems, which will allow him to collect a higher pension when he retires.

The county office concluded that these transactions were legal, but the California Public Employees Retirement System has determined that his pension credits were wrongly inflated in other ways.

In an 11-page letter to Fernandez on July 8, CalPERS disallowed previous credits for automatic annual wage increases and other payments. The district had created special payment rules that applied only to Fernandez, and pension credits could not be achieved based on these rules, the agency wrote.

The superintendent’s contract and related issues also have been under investigation by the FBI and the L.A. County district attorney’s office.

Fernandez has been advised by his attorney not to comment, but in the past he has said that school board members understood his contract when they approved it with the advice of counsel.

howard.blume@latimes.com

Twitter: @howardblume