The California Taxpayers Action Network (CalTAN) has filed a lawsuit against San Diego County Board of Education Superintendent Randy Ward and Assistant Superintendent Lora Duzyk, alleging the schools chief rigged the process to allow himself to approve his and Duzyk’s salary increases without performance reviews, including a recent raise they took last week on July 1st.

CalTAN filed its lawsuit Thursday, July 7th, and immediately issued a “Request for Preservation of Evidence for Use in Litigation” asking the SDCOE to “take all steps necessary to preserve any and all information” including “all financial, payroll, and personnel records of SDCOE since 2007.” CalTAN is represented by attorney Cory Briggs who successfully sued to stop the controversial Convention Center hotel tax in 2014.

The lawsuit accuses Ward and Duzyk of “violations of the California Constitution and laws prohibiting conflicts of interest, self-dealing, and abuse of public office” stemming from changes Ward negotiated to his existing employment contract that created a new process for future raises and increases to his employment benefits.

A Board amendment to Ward’s existing contract was approved on June 11, 2014, to connect the Superintendent’s pay to raises given to teachers and classified staff of the  SDCOE. Those raises, however, are negotiated by Ward and his staff. Under his “me too” clause, the Superintendent benefited from the same percentage increase he negotiated for teachers, and eliminated the prior system that linked his raises to his own performance each year.

““Self-dealing by public officials, especially at the expense of students and taxpayers, has no place in government,” said CalTAN Chairman Kevin O’Neill.  “It would be an abuse of the trust that the public puts into these administrators to safeguard scarce financial resources and keep the well-being of students and taxpayers above their own personal interests.”

During the Board discussion on Ward’s contract amendment on June 11, 2014, Board member Susan Hartley said that the change in how Ward would receive pay raises was a “me-too thing that [Ward] added in” and replaced the “rating system which we’ve done away with.” The change allows Ward to dictate the amount and timing of teachers’ raises, and, therefore, his own.

“It’s a conflict of interest for Randy Ward to be in a position to determine the raises for teachers when his own pay is directly connected to those raises,” said Esther Gutierrez, a PTA President in San Ysidro. “Randy Ward has given himself raises every six months and has now ended up making over $331,000 a year,” Gutierrez added.

On the night Ward’s contract was amended in 2014, the Board approved two retroactive raises for Ward; a two percent raise retroactive for one year, and a one percent raise retroactive for six months. Board member Hartley also claimed that the raises were “based on “[Ward]’s sacrifice of salary increases over the past five years.

But in a review of documents from the SDCOE, a memo from Ward on June 10, 2010 directed the SDCOE to retroactively give him his deferred 3.8 percent raise from July 1, 2008. Ward recovered the deferred salary increases and collected the raise. His salary then went to $286,073, plus benefits, including a $25,000 annual cash contribution to his retirement.

Since then, Ward has negotiated and accepted seven pay raises on July 1, 2013; January 1, 2014; July 1, 2014; January 1, 2015; July 1, 2015; January 1, 2016; and again on July 1, 2016.

The California Constitution bans retroactive pay increases for public employees in Article 11, which states that “A local government body may not grant extra compensation or extra allowance to a public officer, public employee, or contractor after service has been rendered or a contract has been entered into and performed in whole or in part.”

At the time of Ward’s contract amendment, Board member Hartley also commented that the new salary arrangement with Ward “creates a degree of equity” with teachers, but his latest pay raise last week was an increase of $12,759 for Ward, compared to a raise of only $1,773 for a starting teacher. His current salary is now $331,736, or nearly 7.5 times the starting salary for teachers in San Diego.

Ward received an “unsatisfactory” assessment from the Board in his latest annual review, yet he still took a four percent raise on July 1st, the first day of the new fiscal year for the SDCOE. Under the new system, his raises are no longer dependent on his work performance.

Lora Duzyk, also named in the lawsuit, serves as the Assistant Superintendent of Business Services in charge of the finances for the SDCOE. She also received pay increases with Ward, and her salary is now $168,618

Duzyk came under fire last year when she served as a fiscal overseer of the San Ysidro School District between 2013 and early 2015 when that school district was in financial trouble. San Ysidro Board members have alleged that Duzyk purposely helped mislead that Board to give the impression the District was in worse financial condition than it truly was in.

During her time overseeing San Ysidro’s finances, she advocated for teacher pay cuts of eight percent for three consecutive years to help balance the budget, totaling a cut of over 22 percent. As the fiscal overseer, Duzyk’s salary was charged to the San Ysidro District. In a review of the SDCOE documents, during her time at San Ysidro, Duzyk received a six percent pay raise, amounting to increase of $9,944 per year.

“Duzyk looked us in the eyes and told us there was no money to pay us while she was actually taking a pay raise from our money,” said Martin Galante, a kindergarten teacher in San Ysidro. “Based on her dishonestly in dealing with our budget, she shouldn’t have received a pay raise at all,” Galante added.

The CalTAN lawsuit is seeking a “judgment ordering Defendants to return all illegal pay increases received”, “injunctive relief prohibiting Defendants from disbursing paying, or otherwise transferring any money or other consideration received by them as illegal pay increases”, and “a peremptory writ of mandate directing Defendants to rescind all illegal pay increases.”

A recent California Supreme Court decision may prove helpful to the CalTAN lawsuit. Just last month, the Court upheld the criminal indictment of Jeffery Hubbard, who was convicted in Los Angeles County Superior Court of two felony counts of misappropriating public funds while Superintendent of the Beverly Hills Unified School District from July 2003 to June 2006. In that case, Hubbard approved bonuses and car allowance payments to the district director of planning and facilities. A lower court had overturned the convictions in ruling Hubbard was only “the first step in a process that results in the expenditure of public funds”.

The Supreme Court disagreed, and ruled that Superintendent Hubbard was responsible for “the receipt, safekeeping, transfer or disbursement of public moneys”, making any superintendent directly liable for misuse of funds under their control. In the CalTAN case, the clarity provided in the Hubbard case would put Ward’s actions under heightened scrutiny given that he negotiated pay raises for teachers that would directly enrich himself as well.

Earlier this week, former San Diego City Attorney Mike Aguirre filed a tort claim against the SDCOE on behalf of San Ysidro teachers seeking reimbursement for lost wages due to the false financial information Lora Duzyk provided during 2014 salary negotiations. That contract resulting in teachers receiving a one percent raise instead of raises more in line with other local districts. The claim is seeking lost wages from reduction in salaries, retirement benefits, interest, health benefits, work furlough days, and wages lost during their strike. The SDCOE has 45 days to respond before Aguirre could file a lawsuit.