Stockton Unified School District leadership has come under fire by local and state agencies in recent years for its fiscal management, including an investigative audit released earlier this month that found evidence of illegal financial activity within the district. Just one week prior to the report’s findings being presented to the school district’s governing board, SUSD Trustee Ray Zulueta was appointed to a Stockton tax measure oversight committee.
The citizen advisory committee oversees whether expenditures from the city’s Measure W funds, a sales and use tax passed in 2004 that supports police and fire protection services, are being spent appropriately.
Zulueta’s appointment, which was put forward by Councilmember Brando Villapudua, was approved in a 6-0 vote by the Stockton City Council Feb. 7 through the council’s consent agenda. Councilmember Kimberly Warmsley was absent from the meeting due to a family emergency.
Villapudua told Stocktonia Tuesday that he hadn’t been aware of the state’s report on Stockton Unified when he made the decision to recommend Zulueta for a spot on the committee. The audit’s findings were released a week later.
The state investigation, which began in February of last year and is known as an “Extraordinary Audit,” was conducted by California’s Financial Crisis & Management Assistance Team (FCMAT) investigators. Auditors examined district fiscal practices from July 2019 through April 2022.
Investigators found “sufficient evidence to demonstrate that fraud, misappropriation of funds and/or assets, or other illegal fiscal practices may have occurred,” according to the audit report. Other findings include possible violations of California’s open meeting’s law by the district’s Board of Education, apparent conflicts of interest, abuse of power and that trustees and the superintendent on occasions did not follow board policies and the law.
The FCMAT report also comes on the heels of more than two years of controversy for the county’s largest school district, including two scathing San Joaquin County civil grand jury reports, accusations of financial mismanagement, looming deficit, board disfunction and outrage from the public over the district’s handling of various issues.
Trustee Zulueta, whose tenure on the SUSD Board of Education began in 2020, did not serve as a member of the governing board for the entirety of the time period in which state investigators aimed their focus.
However, all three reports — two from the grand jury and one FCMAT — questioned actions made by “trustees.”
Zulueta also voted in favor of awarding a contract worth millions of dollars to a company called IAQ Distribution Inc at a meeting in August 2021 following what was described by state auditors as a flawed if not illegal process. The contract, which was paid for using federal funds, purchased ultraviolet light air purification units for the district to help mitigate the spread of COVID-19, more than half of which are being stored in a warehouse.
Councilmember Villapudua told Stocktonia that he has since become aware of the FCMAT audit but had not yet read the entirety of the state investigator’s findings as of Tuesday morning. He also had not previously been aware of any grand jury reports involving SUSD or its trustees.
“I got to really look into it, what the whole entire facts are,” he said. “This is something I really need to consider, both for my reputation and what’s best for the community.”
But Villapudua also wants to give his nominee the benefit of the doubt. He said Zulueta would soon be receiving a call from him to talk about the issue.
“We don’t know the whole story,” Villapudua said. “I at least want to give the guy, Ray, a chance to give his side.”
Zulueta was one of only two candidates to apply for the committee after he put out a call for applicants on social media, Villapudua said. The other candidate never responded to him again, while Zulueta met the requirements for the position and Villapudua liked Zulueta’s answers to questions about why he wanted the job.
In an emailed statement to Stocktonia, Zulueta said of why he applied to join the committee: “A good friend who volunteers in the community served as a commissioner in the past and said it was a good place to continue to use my skills in service of Stockton as a supporter of Police and Fire departments.”
Zulueta was also asked what he would say to people who may be suspicious of him serving on the advisory committee in light of the FCMAT and grand jury reports.
“Thank you for your concerns and I appreciate having the opportunity to continue to serve my community,” he said.
Measure W Oversight Committee members are volunteers and do not receive compensation for their service. Zulueta’s term on the committee began immediately upon council approval of his appointment and runs through Jan. 31, 2025.
Villapudua, who was sworn in to office Jan. 10, said that he hadn’t known Zulueta personally when he applied for the committee. He also explained that Zulueta’s nomination was one among several that he had to make in a small window of time, noting that his focus had primarily been on selecting appointees for other committees and commissions, such as the city’s Planning Commission.
The first-time city council member made three other city committee and commission appointments that were approved by Council alongside Zulueta Feb. 7, which were also accompanied by other council members’ appointees. He also made at least two other nominations at Council’s previous regular meeting Jan. 24.
Villapudua described the Measure W Oversight Committee as “very special” and said “it’s important who represents our city.” He also wants to make sure that Zulueta is “focused and not overwhelmed” by what’s going on.
But the Council District 5 representative says that if he has to change his committee appointee, he will.
Other Stockton council members weigh in on Zulueta appointment
Fellow new Councilmember Michael Blower told Stocktonia Wednesday afternoon that he also had to make several appointments quickly — six in all. The city clerk tells a council member when they first get elected how many appointments they’ll need to make, he said, adding that those choices are then vetted by the city clerk to make sure they meet any qualifications.
All of the appointees he put forward were people he knew personally and were well-qualified for the job, Blower said, expressing his pride in those he chose.
“I think someone would have had to have done something pretty egregious or be unqualified to be shot down,” Blower said of council member nominations in general. “It would be kind of an aggressive move to challenge one of my colleagues on their appointment.”
Zulueta also hasn’t been indicted or specifically singled out for any wrongdoing, Blower said.
The San Joaquin County Office of Education has notified State Controller Malia Cohen, California Superintendent of Public Instruction Tony Thurmond and San Joaquin District Attorney Ron Freitas of state investigators’ findings. Freitas said in a statement to Stocktonia last week that he was looking “forward to thoroughly reviewing the independent auditor’s report.”
Blower also noted that if Zulueta wasn’t qualified for the committee he wouldn’t have ever made it past the city clerk.
Though he is concerned about the state’s findings and noted that the Stockton Unified governing board wasn’t acting in the best interest of taxpayers when making certain decisions, Councilmember Dan Wright echoed Blower’s sentiments about Zulueta’s appointment to the city’s committee.
He respects his colleagues’ right to choose whomever they want, Wright said, adding that objections usually don’t occur “unless there is a serious reason.” He also noted that all the evidence from the state’s investigation into Stockton Unified hasn’t yet been made publicly available.
“We may need to look at it again,” Wright said if there is ever any evidence presented that Zulueta took a direct leadership role in any of the issues brought forward.
But Wright did note that making such an appointment to a city committee or commission may push people question the judgment of the person putting that decision forward.
“It is a political risk to appoint someone who has become a concern for whatever reason,” Wright told Stocktonia Tuesday. “But if you believe strongly in that person, go ahead and appoint them.”
However, Wright said that the seven-member oversight committee doesn’t have any decision-making power and that there are security protections in place. The committee’s general function is to issue statements regarding whether they believe the Measure W funds are being spent in the way they were originally intended.
The measure’s funds are also monitored by the city’s chief financial officer and an outside auditor, he said.
Therefore, Wright isn’t “terribly worried” about Zulueta being on the committee.
However, Councilmember Warmsley, who had been excused from the meeting where Zulueta was appointed due to a family emergency, says that across the country voters are distrustful of their governments at all levels — local, state, federal — and that Stockton is not immune to negative perceptions.
“Everybody at this point is looking for fiscal accountability,” Warmsley said.
She described recent happenings at Stockton Unified and Zulueta’s appointment to a city committee as concerning. But Warmsley emphasized that the city and its largest school district are separate entities.
“It does send a message,” Warmsley said of Zulueta being on the city’s committee. “And we need to be aware as we move forward as a council.”
But Warmsley vowed that Stockton will not experience what’s allegedly going on within SUSD so long as she serves as an elected city representative.
“We as a council have done our best and due diligence in providing our community with the information of where their taxpayer funds are going and will continue to do that no matter who is on the Measure W committee or not,” Warmsley said. “The buck always ends with us council members.”
Councilmembers Susan Lenz and Michele Padilla as well as Mayor Kevin Lincoln’s office did not immediately respond to requests for comment.