Budget Guru Resigns Amid School District Money Woes

The fallout from the Santa Barbara School District’s ongoing money mystery continued last week as Assistant Superintendent of Business Services Ed Diaz unexpectedly stepped down from his post. Diaz’s decision to quit after only 11 months on the job is an eyebrow-raising development in a district that is struggling to explain how the board went from making more than $2 million in supposedly necessary program cuts this past spring to having an apparent multimillion-dollar surplus just a few months later. Publicly, the district contends that Diaz’s departure-which bookends a similarly unanticipated resignation from the district’s Director of Fiscal Services Robert Wolf earlier this summer-is not necessarily a byproduct of the budget chaos. Rather, according to Superintendent Brian Sarvis, Diaz simply wanted to “pursue other options.” However, several district officials-who are prevented from publicly discussing personnel issues-privately speculated this week that the resignation was a direct result of the money woes and the hostile hullabaloo swirling around the issue. (Diaz’s opinion remains unknown, as attemps to reach him for comment on this story were unsuccessful.)

Diaz’s predecessor, Mary Stark, left the district last year, after delivering a particularly dreary report on its fiscal state. Diaz was then brought in, heralded by Sarvis specifically as the man to right the district’s budget and with an impressive resume that included 13-plus years of public school finance work and a lengthy tenure as the business services superintendent of the Oxnard School District. Hopes ran high. However, shortly after the district negotiated a new labor contract-complete with three years’ worth of raises for teachers-the wheels began to come off the feel-good budget wagon.

There were the gut-wrenching, massive budget cuts of mid April-now mostly restored-followed by the June discovery of surplus millions in the general fund; the several subsequent attempts to account for the found money; the departure of Wolf; and the frustrating board meetings in which Diaz butted heads with boardmembers as they bombarded him with questions. At a particularly confrontational late summer meeting, trustee Bob No»l squared off with Diaz to such a contentious degree that Diaz actually left the meeting. And finally there was the decision late last month, urged by both Diaz and Sarvis, to hire School Services of California to come in November and conduct an extensive third-party investigation of the situation. No»l admits to “pounding Diaz behind the scenes for information” and recently filing three public information act requests to get finance information from the district that he contends staff wouldn’t give him. No»l said this week that Diaz’s choice to leave doesn’t change the issues at hand. “The real problem is still getting answers and clearing the air so we can all breathe again,” he said.

To that end, Sarvis-offering that “any time you lose someone, it slows you down a bit”-explained that the School Services investigation would proceed as planned and that the district is seeking applications to fill the vacancy left by Diaz. In the meantime, Eric Smith, a public schools budget whiz and business officer from Paso Robles, has been brought in on a part-time temporary basis through January. Smith is no stranger to Santa Barbara District schools as he, working with the state-run Fiscal Crisis Management Team, helped conduct a review in 2005, prior to the district’s decision to adopt a single-district resolution. That bookkeeping-motivated decision keeps the elementary district and the secondary district as separate entities but merges them as one big financial beast. Many officials and members of the public feel that merger has compounded the district’s current financial confusion. Pointing to this specific experience as well as Smith’s former gig with a district in Modesto operating under a similar resolution, Sarvis stated with a noted tone of hope, “He is exactly the type of person we would like to attract permanently to the position.”