FUSD board members call for outside investigation into lease-back deal

Harris Construction of Fresno built Gaston Middle School, but now faces questions about the contract used for that project.
Harris Construction of Fresno built Gaston Middle School, but now faces questions about the contract used for that project.

Three Fresno Unified School District trustees are calling for an outside investigation of a controversial contract with Harris Construction, saying details released so far about a lease-leaseback deal have been “conflicting” and “incomplete.”

Trustees Brooke Ashjian, Carol Mills and Luis Chavez say the community deserves transparency regarding Davis v. FUSD, a lawsuit filed by another developer. They want fellow board members to vote to hire an independent investigator to determine the facts of the case, such as who knew what and when.

In the lawsuit, builder Stephen Davis alleged that Fresno Unified did not have a fair bidding process for the $36.7 million contract to build Gaston Middle School. His suit ultimately came before the 5th District Court of Appeal, which found that the Gaston Middle deal was illegal.

Ashjian said the board members’ call for action is in response to a modification of the opinion released on Friday by the Court of Appeal. In the modification, the court accepts allegations about the existence of a prior contract as true — even though attorneys for Fresno Unified have said there was no pre-construction contract.

“That was the real slap in the face — that either one of two things happened: They (FUSD attorneys) lied to the judge or they were lied to. Either way, somebody lied,” Ashjian said Monday. “Ultimately, somebody didn’t do their due diligence in protecting the district and gave away the farm and nobody is willing to admit who did that. I just want to know who did it.”

Ashjian said the board was told that there was no consulting agreement prior to the lease-leaseback deal being approved by the trustees — just as the district’s attorneys told the Court of Appeals. Superintendent Mike Hanson also denied a prior agreement, Ashjian said.

The modification also states that as part of the contract, Fresno Unified agreed to pay all of the contractor’s legal fees.

The three board members pushing for the outside investigation are asking that the matter be taken up at a special meeting scheduled for next month. But both Ashjian and Mills say that request has already been denied once before.

“If we are not allowed to figure out what happened, then the community has to decide what kind of representative they want,” Ashjian said.

Hanson and board President Cal Johnson have previously refused to place the item on a public meeting agenda, Ashjian and Mills said. Hanson did not return phone calls Monday — his staff said he was on vacation — and Johnson would not comment on the matter, only saying “people can have different opinions.”

“The superintendent and board president have declined to place it on the agenda and that is why we are being more public about asking for it,” Mills said. The three board members on Monday wrote a letter to the editor to The Bee about the request. “The modification makes it even clearer that there seems to be some confusion — certainly incomplete information so far.”

Earlier this month, the court released a decision saying that the $36.7 million Gaston Middle School deal in question was not a true lease-leaseback deal, a method that’s traditionally been used to help poor or small districts build schools.

In those cases, the district “leases back” the building from the contractor over a period of years.

The court ruled that in the Davis case, the district never “leased” out the building and had the cash in hand to pay back the developer right away — which has led to allegations that the deal was made to guarantee the bid went to Harris Construction.