Fast Times at Rancho Santiago: Compensation for Top District Officials Among Highest in State

Third in a three-part series. Read part one and part two.

Earlier this decade, when college district officials across California were responding to the state budget crisis by making deep cuts to education programs, Phil Yarbrough, a board trustee at the Rancho Santiago Community College District, knew who to blame.

In an op-ed he wrote for the Orange County Register in 2011, Yarbrough slammed the “Sacramento politicians” who rewarded public employee union campaign donors with generous compensation packages for state workers.

“The governor and Legislature have chosen to spend our tax money on bloated benefit packages for state employee unions, who, in turn, fund their campaigns through union dues collected by our own state government,” Yarbrough wrote.

What Yarbrough failed to mention was that his own taxpayer-funded benefits package as a community college trustee is also among the most bloated in the state. In fact, he and two other Rancho Santiago trustees last year had the most expensive community college trustee benefits packages in California, according to the most recent survey of all public employee compensation in the state.

The records, compiled by the state Controller’s office, show that three Rancho Santiago trustees each took home $32,595 in benefits. The trustees don’t get a pension, so the cost is primarily for healthcare. Their benefits topped the list of 451 elected community college officials from 63 community college districts that reported employee compensation for the state controller’s database. The database was missing information on nine other districts.

William H. Pickens, former director of the California Citizens Commission on Higher Education, reacted with shock when told about the numbers.

“Good grief. I’m astounded,” Pickens said. “I’m amazed. $32,000… I’m sure that’s on the high end.”

Orange County’s Highest-Paid Chancellor

The trustee benefit packages are just the beginning of what critics say is an out-of-whack compensation structure at Rancho Santiago. For example, Former Chancellor Edward Hernandez has the third largest education pension in the state, having received $304,652 in pension payments last year.

And when he was first hired in 2010, current Chancellor Raul Rodriguez had the largest compensation package of the four community college district chancellors in the county, according to data compiled by the district just before Rodriguez was hired. Rodriguez’s base salary, relocation and other compensation totaled almost $300,000.

Several years later, Rodriguez’s salary is still top in the county — his total compensation including benefits was $359,350 in 2014, according to the state database.

He is making this money while presiding over a district that serves one of the county’s most impoverished communities. The district’s largest city, Santa Ana, is one of the most densely populated cities in the nation and has a poverty rate higher than the state average.

One former trustee says the district is paying Rodriguez almost $50,000 more annually than it should be because trustees decided to allow his soon-to-be subordinate to negotiate his compensation package.

According to former trustee David Chapel, Rodriguez was at first offered $250,000. But then the board directed human resources vice chancellor John Didion to negotiate Rodriguez’s contract, and Didion proposed a deal that bumped up the offer by almost 20 percent.

Chapel said he thought it was a conflict of interest to have Didion negotiate his boss’s salary, especially because Didion’s argument for such a significant bump in the offer appeared to be self-serving.

Didion insisted that if Rodriguez only received $250,000 the spread between Rodriguez and the second highest paid employee at the district – who happened to be Didion – would be too narrow, Chapel said. At the time, Didion was making just over $200,000, according to the state database and other records.

In other words, giving Rodriguez more money would allow employees working under him to grow their own salaries.

“Traditionally, in any education system the principal makes X amount of dollars, and the VP makes quite a bit less,” Chapel said.

The board ignored Chapel’s objections and approved the deal proposed by Didion.

Rodriguez’s good fortunes didn’t end with his salary. When Rodriguez purchased his Santa Ana home in November, 2011 — while the nation’s banking industry was still reeling from the financial crisis — he was able to finance 90 percent of the purchase price through Schools First Credit Union, where Didion served as chairman of the board.

Rodriguez got this mortgage and around the same time he stopped making payments on his previous home in Stockton. The home was issued a notice of default by February, according to public records.

Fast-forward to 2012, and top administrators – including Didion – were making more money than they were when Rodriguez was hired, according to the state controller’s public employee compensation database. At nearly $225,000 in wages, Didion alone was paid almost $20,000 more in 2012 than he was in 2011.

“The chancellor recommends the salary for the vice chancellor, and in this case, the vice chancellor made the recommendation for the chancellor’s salary,” Chapel said. “See how that works?”

Pickens agrees with Chapel’s assessment. He said he’d never heard of college district board members delegating chancellor salary negotiations to an employee who would later be his underling. Typically, outside negotiations specialists are brought in to handle things, Pickens said.

“On the basis, that shows a conflict of interest,” he said.

Rodriguez and other top district officials refused to be interviewed for this article.

Trustees Defend Pay and Benefits

As for trustees’ health benefits, the database doesn’t identify the trustees by name. But Transparent California, another compensation database with similar information, identified one of them as Yarbrough. Based on information from previous years, the other trustees who likely received that level of benefits are John Hanna and Arianna Barrios, owner of the public relations firm Communications LAB.

Pickens suggested that board trustees should eliminate their benefits altogether. He pointed out that the UC Board of Regents, which oversees a much larger and complex system, receives no benefits for the work they do.

During interviews, Hanna acknowledged that it was probably a mistake to put Didion in charge of negotiating his boss’s contract.

“John Didion is one of the most decent and ethical guys that I’ve met, but I think your point’s well taken. As a general rule, we should have a different person do that, and I think in the future that’ll be the case,” Hanna said.

As for the health benefits topping the state controller’s list, Hanna said he was “surprised to hear that.” Hanna said he has six children and one stepchild, and that the district’s health plan costs the same if you have one child or seven.

“It’s a healthcare plan I think is comparable to other districts,” Hanna said.

Yarbrough said he didn’t know how much his health benefits cost the district because he’s never looked into it. He also rejected the comparison to the UC Board or Regents as unfair because they’re appointed by the governor while Rancho Santiago’s trustees are elected.

“I have no idea what you’re talking about,” Yarbrough said. “I have the same health and benefits I believe the district people get. There’s nothing special.”

Actually, that’s not true. The part-time trustees have a better deal than the full-time faculty members. For faculty, the district will only pay for up to $25,821.72 in health insurance premiums. And placing more than one dependent on the district’s PPO health plan takes the cost above the cap. So if a faculty member with seven children wanted to sign up for the same plan as Hanna, he or she would be paying for the childrens’ coverage out of their own pocket.

That additional premium cost adds up to about $800 per month, according to a faculty member who didn’t want to be quoted by name for fear of retaliation. The faculty member switched to the HMO plan because of the high cost.

In defense of Rodriguez’s compensation, Yarbrough said good chancellors are hard to find, which is why he and the board picked Rodriguez. With everything at Rancho Santiago – like a sheriff’s academy and fire training – “we can’t have some imbecile” running the district, he said.

“They’ve got dangerous people out there… they’ve got a bunch of yahoos out there,” Yarbrough said.

And he said he doesn’t remember having the conversation about the “spread” between Didion’s pay and the chancellor’s salary. He also rejected the idea that Didion shouldn’t have been the employee to negotiate Rodriguez’s contract because, he said, Didion is an able negotiator.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: @adamelmahrek

  • mutheta

    The fact that RSCCD chancellor, Raul Rodriguez’ subordinate
    negotiated his contract is alarming by itself. To also learn Rodriguez’ home loan was financed by SCHOOLS FIRST where his subordinate served as chairman of the board raises some serious questions. A search of public records reveals interesting details:

    Rodriguez’ SCHOOLS FIRST loan was actually two loans – a first for $576,000 and a second for $72,000. Rodriguez put $72,000 (or 10% down) and his two loans closed on November 2, 2011. At the same time he was approved for his two SCHOOLS FIRST loans he owed about $198,000 on his Stockton home mortgage. On February 27, 2012 a Notice of Default was issued on his Stockton property.

    1) How could SCHOOLS FIRST approve two loans for Rodriguez with a minimal down payment during the height of the financial crisis knowing he would also be carrying a third loan on his Stockton home for a total of over $800,000 in mortgage debt?

    2) Had Rodriguez already stopped paying on his Stockton home mortgage
    while in the process of loan approval on his two mortgages from SCHOOLS FIRST? If so, did SCHOOLS FIRST look the other way?

    • David Zenger

      Good question. I was wondering about that outstanding loan, too. He may not have revealed it to the CU, which is fraud. He also walked out on the Stockton loan that he really could afford to keep making payments on – another species of fraud, against the original mortgage holder.

      What a guy! And he is the non-imbecile that Yarbrough wants running the ship. That is very, very telling.

      • mutheta

        David – The most serious aspect of this matter is what was SCHOOLS FIRST’s involvement? If Rodriguez’ subordinate somehow was able to get his loan approved that would normally not have been approved, then there could be serious liability on the part of SCHOOLS FIRST. This could be something a class action law firm might want to look into on behalf of the members of SCHOOLS FIRST. Anyone denied a loan by SCHOOLS FIRST during this time may be able to claim damages. I am also curious as to the terms of the loans. Did Rodriguez get a special interest rate?

        At the time Rodriguez’ two loans were approved, many financial institutions were not granting loans and especially loans that size. At the very least, Rodriguez did stop paying on his Stockton home loan. This was a strategy of some homeowners during the recession, but it does show a lack of ethics, especially by a public figure.

  • Paul Lucas

    Im a graduate from Santa Ana college this really upsets me.

  • David Zenger

    I’ve seen it over and over again. SOP at the County. The politicians look the other way while the top level bureaucrats rake it in…just so long as they get to wet their own beaks, too. The junior college…er, “community college” districts, are the worst offenders because they receive the least scrutiny.

    The top-heavy JC administrations with their army of chancellors and vice chancellors and presidents, etc. could be cut 75% and NOBODY would notice the difference.