Superintendent’s pay in South Bay district called ‘excessive’

New York City Chancellor Carmen Farina oversees more than a million students, 1,700 schools and a budget the size of many states. Her pay: $412,193.

Los Angeles Unified Supt. John Deasy has half a million students, 1,000-plus schools, a $7-billion budget — and made $393,106 last year.

Supt. Jose Fernandez’s South Bay school district has just 6,600 students, five high schools and a $70-million budget.

His earnings: $674,559 last year.

“I don’t know of anybody, in any major city, who makes anything close to that, even with extra bonuses or compensation,” said Michael Casserly, executive director of the Council of the Great City Schools, based in Washington.

California Supt. of Public Instruction Tom Torlakson called Fernandez’s compensation package at Centinela Valley Union High School District “wrong, significantly excessive, unreasonable.”

After his pay came to light in articles in the Daily Breeze, Fernandez voluntarily surrendered some perks, including the balance of his annual raise; he did not provide specifics.

He defended his contract, saying that it was an emergency arrangement that offered a high payoff in exchange for high risk.

“This district was going 80 miles an hour straight into a brick wall, and I had to get into that car,” Fernandez said. “This thing could have gone south in six months,” doing serious harm to his professional reputation.

Some residents agree that Fernandez has done a good job, gradually improving the district — covering the working-class communities of Hawthorne, Lawndale and Lennox — which was on the brink of financial disaster several years ago.

“Everything looks like it is improving little by little,” said parent Patricia Rivera. But she was also taken aback by the size of his salary.

“Some parents are really upset,” she added, wondering why they are paying him money that could be used to pay for things that are needed at the schools.

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Here’s how Fernandez made $674,559 in 2013:

His contract provided a base salary of $281,331 and a cost-of-living adjustment of $4,205. An automatic annual 9% raise added $25,698.

The district gave him $230,213 to purchase more seniority in state retirement systems so he would receive a higher annual pension.

The balance of his pay came from a variety of perks, including $12,000 for expenses; a $2,500 bonus for his master’s degree, $7,200 for his auto expenses and $2,400 for his cellphone bill. The district also covers his share of pension payroll deductions, about $18,000 a year.

He’s also compensated when he doesn’t use his full 30 days of paid vacation, which brought him an extra $37,850 last year. And he’s paid extra for each day of work beyond the 215 stipulated in his contract, adding up to $52,991.

From 2010 through 2012 he also did well — and progressively better — making $310,965, $382,370 and $407,786 respectively, according to district records Fernandez provided after a California Public Records Act request.

Fernandez, 54, also has a $1-million whole life insurance policy and a 40-year housing loan fixed at 2%, which he used to buy a $910,000 home in Ladera Heights.

He cited the home purchase as an example of how he has been relatively restrained in using some perks in his contract, which would have allowed for a larger loan to purchase a home in a more expensive area.

“I could have gone to Brentwood or Malibu if I wanted to abuse something,” Fernandez said.

Fernandez said he based his contract on models from professional associations. “Some of the things may be a little higher in pay, but it’s not unusual,” he said.

The contract also offers job security. To dismiss the superintendent requires a vote of four of the five board members. He’s entitled to as much as 18 months’ severance as long as he’s not fired for misconduct.

Centinela school board members hired Fernandez in 2008 when the district — made up of three high schools and two small alternative programs — was veering toward bankruptcy.

The district was laying off employees because of poor financial management, according to both the district and the teachers union.

Fernandez, a Centinela graduate, had previously been replaced as chief business officer, not long after he warned officials about the system’s perilous finances.

School board President Maritza R. Molina, who joined the panel after Fernandez was hired, said he was brought back because of his honest assessment of the budget — and also because of his commitment and long experience in the school system.

Fernandez’s background did not suggest that he could necessarily solve the district’s financial woes. He declared bankruptcy twice in the decade before becoming schools chief: once in the wake of a divorce; the second time after the failure of a business he ran with his second wife.

But Fernandez had broad government experience for an educator. He served on the Inglewood City Council for 14 years and a local water board for three.

By multiple accounts, he has helped turn around the district.

Fernandez said in an interview that he has renegotiated debts and helped promote two successful local school bond measures as well as a parcel tax.

On a recent day, Fernandez drove the short distance from his office to each campus. He donned a hard hat to show how new construction is reshaping the school system, noting that he took down fences to make campuses look “more like community colleges than prisons.”

The new library at Hawthorne High is his prototype media center, with no books but rows of computers with access to electronic collections. It stays open until 8 p.m. All the schools also will have new science labs, allowing them to offer some advanced courses for the first time.

He headed toward the prize-winning robotics lab.

“Can I pat you on the back?” he asked Lucas Pacheco, who coordinates the nascent School of Manufacturing and Engineering. Fernandez said he was especially pleased at how Pacheco has encouraged girls to take part.

Jack Foreman, head of the teachers union, said Fernandez has a mixed record, but did stabilize finances and “there have been improvements.”

Still, he added: “This is no excuse for him to come into a poor community in the middle of a financial crisis and make sure he has manipulated his contract to take unprecedented compensation.”

Teachers and other staff continued to be laid off even as Fernandez’s pay rose sharply every year, Foreman noted.

Molina, the head of the school board, said the furor over the superintendent’s salary, “starts making us aware, reflecting on what we’re doing.”

She added: “We are evaluating his contract as we speak.” A revised contract is expected to be presented to the board this month.

Torlakson, the state superintendent, said he was exploring legislation to curb what he called future abuses; one legislator already has proposed such a bill.

As for Fernandez, he said the controversy has made his job harder, including his goal of completing the modernization of the district.

He said he’ll need to go to the voters again for a property tax increase, and some people are just focusing on his pay.

“To see people using me as a strategy to destroy the work we’ve been doing here is disappointing,” Fernandez said. “It truly is.”

howard.blume@latimes.com

Times staff writer Teresa Watanabe contributed to this report.