Santa Clara County’s chief education official has a math problem, and he hasn’t been showing his work.
Last month, San Jose Inside learned that county superintendent of schools Jon Gundry was quietly trying to push through a $250,000 contract between the Santa Clara County Office of Education (SCCOE), which oversees 31 school districts, and School Business Service Consultants—a company that does not exist, according to the Internet.
Gundry’s request for money came after he’d already signed off on a near six-figure consulting contract, without requiring any proof of work completed.
Between November 2014 and May of this year, Gundry approved $92,925 in payments to the mystery company’s accounting consultant, Mark Skvarna, without requiring any documentation on results—no emails, no handwritten notes, nothing. The contract itself appears to have been designed so Skvarna, formerly a superintendent in Southern California, could avoid state rules on public employees remaining out of work for six months following retirement.
At a May 20 meeting, Gundry requested an additional $150,000 to continue the contract with School Business Service Consultants. Up to that point, the contract terms had been set at $99,999—a dollar short of public disclosure and beyond the reach of the Board of Education. Following the publication of San Jose Inside’s report, the Board pulled the contract extension off of the agenda for a longer discussion at its June 3 meeting, which takes place tonight. Gundry had placed the item on the May 20 consent calendar, which is often where matters are passed as a procedural matter, without scrutiny.
Since that meeting, Skvarna has decided to quit working with the county. Based on the fact that Gundry was requesting an extension of $150,000 to their prior agreements, it’s not a stretch to say he has left the county with yet another incomplete assignment.
Invoices obtained through a Public Records Act request list the hours Skvarna billed to the county, at a rate of $225 an hour, but no further documentation exists for work completed. When pressed for more information, the SCCOE told San Jose Inside that Gundry, Skvarna and School Business Service Consultants never once shared emails or any other written communication. This is practically unheard of when working on a quarter-million dollar project.
During the first six weeks of his contract with SCCOE, Skvarna reported 88 hours of travel time at a total cost of $19,800 to taxpayers. Considering he only reported 325 hours of actual work, time spent traveling accounted for 21 percent of Skvarna’s fees. These fees also jumped noticeably after the New Year, when Skvarna began billing the county three hours each way for travel, again at the rate of $225 an hour. For the first six weeks of work, his commute time was only two hours each way. There is also a question of why all of Skvarna’s billing was rounded off to the hour in every case.
Gundry, Skvarna and Frank Butler, the listed proprietor of School Business Service Consultants, did not return San Jose Inside’s requests for comment for this story.
Board of Education trustee Joseph Di Salvo, who pulled Gundry’s request for more money off of the May 20 agenda, told San Jose Inside he has serious concerns about how the contract was handled and intends to vet the situation at tonight’s meeting.
“Twenty-thousand dollars in travel in that short amount of time is excessive,” Di Salvo said, adding that he believed the contract was structured as “an attempt to sidestep CalPERS laws on retirees."
A spokesperson for CalPERS, the state’s public employee retirement system, told San Jose Inside that Skvarna receives $8,744.27 in gross retirement benefits per month. He officially retired from Baldwin Park Unified School District, located in Los Angeles County, on Oct. 18, 2014, according to CalPERS. That would mean his work with SCCOE began less than a month later—well ahead of the six-month grace period retirees must wait before starting new employment with a California public agency, unless they apply for a waiver. The SCCOE said it has no documentation for such a waiver.
CalPERS is now in the process of checking if Skvarna is a retired annuitant or truly an independent consultant—the latter classification might shield him from certain rules.
According to a memo Gundry wrote to the Board, he was aware of retirement restrictions on Skvarna working for the county as a full-time employee. Rather than offer him the position of interim deputy superintendent, which would have paid the consultant an hourly wage of $120, Gundry and Skvarna hashed out an agreement to pay him $225 an hour through an intermediary, School Business Service Consultants.
“If he had been hired directly by this office in the Deputy Superintendent position, he would have been subject to those (CalPERS) restrictions, but since he was working as an independent consultant, he was not,” Gundry wrote to the Board. “This is a very common practice.”
To justify the potential end-around of state employment law, Gundry notes that the SCCOE’s lobbyist firm, Capitol Advisors Group, had a glowing endorsement of Skvarna and two other retired superintendents on its website.
In a signoff to his memo to the Board, Gundry wrote that Skvarna has decided to take on other clients because of the “uncertainty of approving a contract extension.”
“I think not completing the job is wrong,” Di Salvo told San Jose Inside. “He’s wimping out on doing the work.”
The lone email discussing the SCCOE’s contract with Skvarna and School Business Service Consultants shows that Gundry and staff knew there was something unusual about the company. County general counsel Maribel Medina wrote an email to Gundry on Nov. 6, 2014, noting that Skvarna had suggested his contract be connected to an outside law firm to assist in auditing matters.
“Since I had not heard of School Business Consulting Services, I looked them up on the State Bar website but could not find the firm or principal, Frank S. Butler,” Medina wrote.
Gundry did not reply to that message, which appears to be a modus operandi for the superintendent, who joined SCCOE a little less than a year ago. Sources tell San Jose Inside that Gundry—who faced complaints of backdoor contracts in Pasadena—rarely uses email, which would be in line with the lack of paper trail for the current contract in question.