This article is a BL Special Report, meaning it was a BenitoLink in-depth or investigative project.
In an unprecedented maneuver before the San Benito County Board of Supervisors went into closed session Tuesday to discuss litigation between San Benito County and the Hollister School District (HSD) concerning alleged missing impact fees, Board Chair Anthony Botelho accused the school district of not being interested in settling the case to the benefit of all parties.
Botelho also claimed during the May 8 meeting that the county had agreed to early settlement talks based on the alleged loss of $110,090.55, but said the school district was only interested in a “pie-in-the-sky amount” that is higher.
“It is really disappointing that the Hollister School District has chosen to litigate this matter in court rather than trying to resolve it with the county without attorneys involved,” Botelho read from a prepared statement. “Unfortunately, we are now being forced to incur attorney fees in trying to defend this action.”
In the lawsuit filed at the San Benito County Superior Court February 6, 2018, the Hollister School District’s claim is “…based on causes of action for breach of contract, illegal expenditure, waste and/or injury to public funds, breach of mandatory duty, conversion, and special recovery of personal property, which accrued around late April and/or May 2017.”
It was at this time the school district discovered San Benito County had failed to properly administer, collect, and/or account for all developer fees due and owing the district, the filing states.
The suit further claims the county, “…hid this fact from the District, that such acts and omissions may have been intentional and willful, and that such facts and omissions have potentially gone on for many years causing substantial damage to the District in the form of lost fees and revenues that otherwise should have gone to improve the District’s school facilities.”
Botelho went on to say the county would prefer its funds be spent on programs and services that benefit county residents rather than attorneys.
“I find these actions to be politically based and not in the interest of HSD by a couple directors,” Botelho continued.
Hollister School District Board Trustee Rob Bernosky, currently running for San Benito County Supervisor District 4, took the comment as implicating him.
“This is in no way, shape or form politically motivated,” Bernosky responded via text. “My looking into missing funds and accounting irregularities can be documented that my questions go all the way back to early 2017, long before I had any thought of running for county supervisor.”
Bernosky also said he thought it amazing that the county had shorted funding to the school district and did not give it information the district needed to calculate what was due. He said there are even more, similar issues.
“And the county board of supervisors chooses to criticize us in such an offensive manner,” Bernosky said. “That attitude certainly doesn’t give any credence to them saying that they are attempting to negotiate in good faith with us.”
Botelho said the school district did not account for the county staff hours expended on behalf of the district in collecting fees for several years.
“As they say, no good deed goes unpunished,” Botelho said. “No written contract exists which legally obligated the county to collect fees. The Hollister School District appears to be taking no responsibility for their actions in failing to assure that proper accounting was and audits of their accounts occurred. Ultimately, their accounts are their own responsibility. We believe the county is immune for liability on this point.”
Bernosky responded to this charge and said that he is committed to making sure the school district’s books are in order and that students, teachers, and staff have all the resources taxpayers intended them to have.
“It is a shame that the situation was not caught before, but it is the situation we are taking care of today,” Bernosky said. “Litigation is always the last resort and the communication trail will absolutely prove we took alternative paths before having no choice but to take it to court.”
If the case does go to trial, faults on both sides will come to light, Botelho said.
“As far as I know, they didn’t submit the rate increase to the clerk of the board or the county administrative officer, and didn’t follow up to make sure that rates were correctly implemented,” Botelho said. “This is how HSD seems to deal with situations: it sits back, doesn’t take any responsibility, doesn’t get engaged, and then tries to come in later claiming something was done incorrectly and reach back far beyond the statute of limitations.”
The board chairman stated further that San Benito County made considerable efforts to reach an informal settlement and that he felt the district did not reciprocate.
“We have told our attorneys to stand down and allow us to try and resolve this amicably,” Botelho said. “We are now at a point where we may have to be more aggressive in our litigation strategy and file a motion for judgment on the pleadings, which would lay out our many defenses and eliminate their unmeritorious claim.”
Bernosky responded that in all his years of attending public meetings, he had never seen closed-litigation discussions moved out into the public forum where the plaintiff was excoriated.
“I have a hard time believing that was done on the advice of the county’s legal team,” Bernosky said. “Why would the county supervisor take that extraordinary step? It would appear that this is going to be very interesting.”
Supervisor Mark Medina, who along with Botelho met with Hollister School District representatives, said it was disheartening to not be able to communicate with fellow residents and it was unfortunate that litigation would take place.
Community activist Ann Ross thanked Botelho for his statement “to address the underlying politics in this matter.”
“When special districts can’t work with the board of supervisors in an election year, it’s unfair to the citizens more than anyone realizes,” Ross said. “It’s disturbing to have this infighting situations that cost taxpayers money.”
When BenitoLink reached out to the Hollister School District for comment after the meeting, Administrative Assistant to the Superintendent Jesus Romero sent an email with the following statement attributed to school district legal representatives:
“The Hollister School District was forced to file a Public Records Act action in response to the County’s failure to disclose documents in response to Public Records Act requests made by the District, or produce the requested documents and records in a timely fashion. The Public Records Act requests sought documents related to what the District contends, were the County’s acts and omissions in administering, collecting, and remitting appropriate developer fees to the District. As part of its investigation, the District determined that the County’s acts and omissions resulted in a significant amount of developer fees not remitted to the District that should have been, and that the County bears responsibility for that shortfall. Litigation was and is necessary to ensure for recovery of such fees due and owing the District, which are vital to ensuring resources are appropriately allocated to the District’s classrooms, programs, students and community. To the extent the County would like to acknowledge its responsibilities, and to correct its conduct in the future, the District welcomes the County to engage in meaningful and reasonable dispute resolution negotiations. As of yesterday, however, it appears to the District that the County’s chosen tactic is not to follow this reasonable and responsible course of action.”
See the PDF file of the lawsuit below.
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