Newberg-Dundee School District Budget Crisis Caused by Illegal Spending on Staffing Agencies, Board Was Aware

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In my previous article, Newberg School Board Illegally Hires Campaign Donor Paula Radich as Superintendent, I explained in detail why the Progressive Yamhill controlled Newberg-Dundee School Board broke state law and district policy when they hired Paula Radich as an “interim superintendent” while superintendent Dr. Phillips is on medical leave. I also discussed that Progressive Yamhill has been spreading online propaganda blaming Phillips for the budget crisis and using it as pre-text to fire Phillips, which they have long desired to do because he is not part of the Progressive Yamhill social activist group.

This article will cover updates to my original article pertaining to the illegal replacement of superintendent Phillips with Radich, and also discuss the actual truth of the school budget crisis which the board has not disclosed to the public, as well as the board’s own culpability in this crisis by ignoring state laws.

Oregon Government Ethics Commission Reminds the School Board About the Laws They Broke

As an update to this illegal hiring, due to complaints against the board filed with the Oregon Government Ethics Commission (OGEC), the Newberg-Dundee School District went through a training session held by OGEC on July 24th. During this session they were told by the OGEC employee they had not met the legal prerequisites for hiring Radich as a superintendent. They were also told they cannot talk about the salary of a superintendent or other contract issues during an executive session. During the video, you can plainly hear that director Jeremy Hayden is troubled by these revelations. Despite being informed by OGEC they broke public meeting laws, the Board is still continuing their nonsense — the Board has scheduled a meeting for tomorrow, whose only agenda items are to discuss litigation likely to be filed during an executive session, and to publicly discuss Phillips contract. They are most likely going to vote to fire him, even though, based on the information OGEC told them (34:20 of the July 24 video), they were also informed the Board’s earlier public discussions about Phillips salary during board meetings were illegal.

For clarification, the current Progressive Yamhill controlled board discussed Phillips salary multiple times in past board meetings in the early part of this year in January and February. During board sessions they pressured Phillips into amending his contract to reduce his salary. For evidence, you can simply look at the video and meeting notes for the January 9, 2024 sessions. Looking at the video, starting at 2:52:31, you can clearly observe multiple board members complaining about Phillip’s salary and bonuses, and accusing him of taking too much of the school budget’s money. Then Board Chair Nancy Woodward incorrectly claims that a superintendent cannot receive bonus payments, a statement which contradicts ORS 332.505 (2)(a) that plainly states, A district school board may: Compensate district employees in any form which may include, but shall not be limited to, insurance, tuition reimbursement and salaries.

As a side note, you will note in this portion of the video, Hayden also throughout the course of this discussion claims that Oregon state law prohibits employment contracts clauses where a public employee must be paid out their full contract if terminated earlier than their contract term limit, which is absolutely untrue. It is these kinds of statements that demonstrate these board members do not understand the laws they are responsible for complying with. On that note, it’s also abundantly clear the attorney for the school district who provided guidance to these board directors also does not understand these laws either. This is a clear case of the blind leading the blind into the abyss.

At any rate, as these discussions led to Phillip’s employment agreement becoming amended for his salary, that contract amendment was probably also illegal, too. So in short, tomorrow the Board is likely to cause yet another lawsuit by firing Phillips under the terms of a contract that was illegally amended.

Radich Fires Deputy Superintendent Who Was Supposed to be the Interim Superintendent

As another update to my original article since its publication on June 15th, as reported by Yamhill County News, Radich has terminated the employment of several employees of the Newberg-Dundee school district, including that of Deputy Superintendent Scott Linenberger. As pointed out in the July 16 article by Rebecca Wallis, Linenberger’s contract contains a golden parachute clause that requires the remainder of his contract be paid out in the event of any termination. This means the Newberg-Dundee school district owes Linenberger approximately $324,000, not including the five years of fringe benefits he is legally owed per his contract, which could potentially be another $500K owed to Linenberger. Radich had terminated Linenberger’s contract claiming it as a layoff and that his position was being “eliminated” as a cost saving measure for the district, yet it is plainly clear by simply looking at his contract that the district is not being saved any money by his termination.

Reliable sources in the school district have informed the Yamhill Advocate that Linenberger had, per district policy, actually been selected by Dr. Phillips to serve as interim superintendent while he was on leave. This was of course interfered with by the Board, as detailed in my past article. Based on assessment of these facts, it is my conclusion that Linenberger’s termination, and that of all other employees of the district by Radich as part of the reduction of force, is illegal, as Radich was unlawfully hired to start with. Since Linenberger was also supposed to be the interim superintendent, having him laid off is clearly wrongful termination as well which the board has caused by the illegal hiring of Radich. I foresee that the Newberg-Dundee school district will be facing numerous wrongful termination lawsuits as a result of the Board and Radich’s actions. This could be why the Board recently hired seven new law firms — they are likely expecting lawsuits to be filed due to these firings.

(Source: Pg 58 of July 9, 2024 NDS Board Meeting Packet)

Another important fact is that Linenberger, as deputy superintendent, was the head of Human Resources for the Newberg-Dundee school district. This means his termination by Radich can be construed as a move to deprive school employees of adequate HR representation during her tenure over the district. As I have pointed out in past articles, employees of the district cannot fully rely on their union representatives to defend them, as their union representatives are members of Progressive Yamhill as well. That is to say, at present the school board, school administrators and the union representatives are in cahoots with one another as part of the Progressive Yamhill social activist group (for evidence see my October 12, 2021 article Meet the Newberg Mafia, Newberg Teacher’s Union).

This is not the only way that the drama in the Newberg-Dundee School district is caused by connections within the Progressive Yamhill social activist group. The budget crisis is also connected, too.

The Illegal Spending That Caused the Budget Crisis

My reliable sources within the Newberg-Dundee school district have claimed to me that the primary factor that caused the budget crisis was a large volume of spending based on contracts that, strictly speaking, are illegal. That is these contracts were signed without proper board authorization per Oregon state law. In particular, ORS 294.456 provides laws for how school budgets can be determined and approved, and how expenditures may be spent. This provides guidelines for the public meeting laws and how contracts must come before a school board for approval.

There are additional state laws that apply. ORS 332.075 (2) states, All contracts of the school district must be approved by the district school board before an order can be drawn for payment. If a contract is made without the authority of the district school board, the individual making such contract shall be personally liable.

Further to this, ORS 332.075 (3) plainly states that, A district school board may not authorize its superintendent or the superintendent’s designee under this subsection to enter into and approve payment on contracts that are collective bargaining agreements or service contracts that include the provision of labor performed by employees of the school district. 

Despite this, the Yamhill Advocate has obtained documents that are contracts between third party vendors, many of which are staffing agencies for the hiring of contractual temporary workers, to provide a provision of labor performed by employees of the district which, per the statements provided to me by the school district, are contracts that were never legally approved by the school board during a public meeting. Yet, based on numerous budget committee and general board sessions, the Board was fully aware of these contracts yet never took any steps to bring them into legal compliance nor oversee the spending on them.

For example, the May 7th 2024 Board meeting concerned a detailed discussion about the 2024-25 budget, and multiple lines of the budget proposal show allotments for contractual employees. During this meeting, at 48:52 in the video, Budget Committee member Kim Mihaylov asks a question about contractual employees. Then during the May 21, 2024 meeting, Finance Director Heather Bixby talks to the board about the contracts with staffing agencies starting around 1:16:10 in the video, which the board discusses for around 20 more minutes. This is evidence the board knew about these workers, yet never asked any questions about their contracts.

Next, during that May 21, 2024 meeting, at around 35:02 Budget Committee member Claire Hertz asked Finance Director Heather Bixby if there was a position control policy in place and she was informed by Bixby there was not such a policy in place when she was hired into the district. Hertz then acknowledges that the board has responsibility for the overspending on labor due to the lack of a position control policy having been implemented by the board.

Interestingly, the Budget Committee Chair Kat McNeal then asks Bixby, “I’m a semantics person. When did that position go away” and “is there somebody there for that position and it wasn’t being used, or there was not a position for that?”. A question that understandably confused Bixby. McNeal, the chair of the budget committee, then had to be informed that position control is not an occupation but an accounting administration policy, even though as chair of the budget committee McNeal ought to know what a position control is. This exchange between McNeal and Bixby is comical, and just further demonstrates that the Progressive Yamhill board has placed people from its social activist group (which McNeal is a member of) into important public positions who are totally unqualified for these positions and unable to provide oversight for the district. Through the research for this article I had to watch hours of public meeting videos featuring these Progressive Yamhill members who very clearly are not qualified for governing a school district as they lack experience with basic accounting rules for large companies. A public school board meeting is not the place to learn accounting, and yet they waste substantial amounts of the district employees’ time asking basic questions the directors should have already known the answers to before they ran for election to begin with. They also never ask the correct questions that might have led to the prevention of the budget crisis in the first place, arguably because these board members were elected for political reasons and not because any of them are qualified to govern a school district that spends millions of taxpayer dollars and employs hundreds of people.

There are also numerous invoices sent to the district by these third party vendors for payment. According to reliable sources from within the school district, a substantial part of the money that put the district overbudget is the invoices for these contracts which came sudden and unexpectedly toward the end of the school year to be paid. Many of the contracts are open-ended, with high over-time costs, many workers able to exceed $100 an hour through overtime. The open ended nature of these contracts and lack of supervision by the board on these costs made it difficult to predict the future expenditures related to these temporary employees of the district.

There are many contracts and invoices I was provided by the district as part of my public records requests, and yet I will preface this section by stating that I do not believe the school district has provided me with the full extent of them. One of the reasons I believe this is because the district provided me a contract with the Forest Grove School District yet the district did not provide me with any of the invoices for this contract. Additionally, the District is refusing to provide me the actual emails these invoices were attached to when they were sent to the district, which also obscures who at the district these invoices were sent to and the precise dates the invoices were sent. These facts lead me to the conclusion that the district under Radich is purposely trying to hide the full extent of the spending from the public. What other reason do they have to withhold documents they are legally required to provide in order for transparency about this budget crisis incident? I can think of no other reason other than they want to obstruct the full scope of the spending and those responsible for it.

You may wonder why did the district start using these staffing agencies in the first place? The reason is because after Phillips was hired as superintendent, many of the school staff who were members of Progressive Yamhill resigned in protest and took jobs at other school districts such as McMinnville and Sherwood. The school district sought to use staffing agencies to find temporary employees to fill in these gaps. This was known to the past conservative board directors, but due to the 2023 election resulting in many of these directors replaced by members of Progressive Yamhill (the current board makeup) it became the responsibility of the current board to review and approve these staffing contracts, which based on my research the new Board never did despite their awareness of these contracts. Instead, the Progressive Yamhill controlled board became hyper-focused on revoking policies passed by the conservative board, such as their illegal revoking of the parent’s rights bill, and their obsession with amending Phillip’s contract.

That is to say, the Progressive Yamhill board members were primarily only interested in their personal political agendas and were not actually interested in governing the school district in a responsible manner. Their disinterest in ensuring the district governance complied with state laws is what led to the current budget crisis.

Now let us look at the documents I have been able to obtain. You can click here to download the full list of documents whose information I will be referencing, which includes contracts and invoices in the zip file. I will also link to specific documents as I discuss them.

Rallied Force Contracts

There are numerous contracts with a company called Rallied Force, which is owned by Newberg City Councilor Elise Yarnell Hollamon, who is also a prominent member of the Progressive Yamhill group (as a side note, Hollamon is the same Progressive Yamhill member who tried to orchestrate my arrest by the Yamhill County Sherriff department two years ago for publishing an audio recording of her taken at a public meeting, a clear act motivated to censure my reporting about her group’s activities to the public. The Yamhill County District Attorney did not file charges, determining no evidence that I violated any laws).

The Rallied Force master contract was signed by Special Education Director Tony Buckner,

The invoices sent by Rallied Force are also addressed to him as well,

Per an email I received from Newberg-Dundee School District Purchasing Specialist Rebecca Brenner, there are no records of the school board authorizing these contracts in a public meeting session. I also did not find any evidence of any board authorizations for Rallied Force and workers hired through it in the packets of board meetings posted to the school website.

Consequently I am left with no conclusion other than that these contracts with Elise Yarnell Hollamon’s company Rallied Force are illegal. Per ORS 332.075 (2) Tony Buckner is personally liable for these contracts as he is the one who signed them, and yet neither the Board nor Radich has publicly disclosed Buckner’s liability for the budget crisis, instead they are blaming Phillips and other staff who did not sign these contracts. I find this extremely suspicious, just as I find it suspicious that the district under Radich is refusing to provide me all of the various agreements with Rallied for specific employees hired from their agency. They did provide me some invoices which shows numerous hired workers by name but the district did not provide any of the specific contracts for these workers to me, as they should have per law.

My suspicion is that, as the Board was fully aware of the large volume of hiring of temporary workers through these staffing agencies and yet never took any steps to review the contracts and approve them in public meeting sessions as per law, the Board members recognize they are legally culpable for the illegal spending and so they are trying to hide the truth from the public by shifting blame to Phillips and other staff while simultaneously only targeting for termination those staff who are not part of the Progressive Yamhill political activist group. So the cover up serves two main purposes; to obscure from the public the legal culpability of the Board for permitting these illegal contracts that led to the budget crisis while simultaneously using the crisis they caused as a way to purge employees of the school district for political ideological differences,

Yet, the parties involved know their culpability. Hollamon has also become pre-emptively defensive about these contracts since the mentioning of payments to staffing agencies causing the budget crisis during a recent board meeting. In a social media post published to Hollamon’s Facebook profile, she wrote the following,

Despite Hollamon’s claims, it is abundantly clear that the hiring of Rallied did not comply with Oregon state law requirements for contracts that provide a provision of labor performed by employees of the district. None of Rallied Force’s contracts were reviewed and approved during a public meeting and voted for by the board.

The other problem with this statement is that Rallied Force has a corporate history that doesn’t quite match the events Hollamon claimed. According to the Secretary of State website Business records, Rallied Force was incorporated as a single member LLC on November 15, 2022 with a business entity number of 204072292 but filed to dissolve on January 10, 2023. Hollamon then filed the very next day on January 11, 2023 to incorporate a new company with the same name as a single member LLC with a new number 20637869.

This is…bizarre behavior, especially in light of the lucrative contracts Rallied would gain from the Newberg School District. My guess is the purpose behind closing the first company and starting the second with an identical name was as part of some kind of (probably ill-advised) tax scheme. Without knowing what prior contractual work the first company was involved with, its hard to know for sure precisely what the motivation was but since Hollamon immediately created a new company with the same name, it was likely to separate the business dealings of the new company from the old while retaining the same name for continuity on existing contracts and business. Regardless of the reason, it seems obvious that the 2nd company was newly created in anticipation of getting new business contracts, such as the lucrative school district contracts.

It may also be worth mentioning that Hollamon’s Rallied Force shares an office address with Hollamon’s nonprofit Community Wellness Collective, whose activities in the school district have been the subject of my past reporting. The Collective is also involved in the operation and funding of homeless shelters in Newberg as well, formerly receiving substantial city funding for the now shut down Harvest House which it formerly operated on behalf of YCAP. It seems to be that Hollamon leverages her association with the Progressive Yamhill group in order to obtain lucrative funding for her companies.

Maxim Healthcare Staffing / Amergis

Tony Buckner also signed numerous contracts with Maxim Healthcare Staffing, now known as Amergis Healthcare Staffing per a change of name filed in March 2024. Company original formed in 2018 in Maryland. According to a press release it appears to be a nationwide company and in the press release about their name change they identify themselves as the fourth largest healthcare staffing company in the US with offices in 32 states. The contracts were signed between 2022 and 2023, with some lasting into 2024.

It is worth mentioning that Ann Ziehl, Director of Special Programs, and Heather Bixby, the Finances Director, also signed the master contracts with Maxim as well, in 2022.

You can see the full list of contracts signed with Maxim in this PDF. These contracts are very lucrative, paying base rates such as school aides for $45 an hour, $70 an hour for a counselor and so on.

I should mention that when I asked the district to provide me a board resolution for the approval of these Maxim contracts, they instead sent me a memo of understanding between the school district and Oregon School Employees Association Newberg Chapter 17 (the union), which is not signed by anyone, which I find incredibly suspicious as it neither answered my question and raises new one — How can the district legally have an agreement that is not signed by anyone??.

In fact, many of the contracts I received only have the signatures of school employees and lack the signatures of the other companies the agreement is entered into, which is also suspicious. Why is the Newberg school district under Radich not providing the final signed copies of these service contracts? That is rather bizarre.

Additional Contracts

There are several other contracts that Tony Buckner signed which the district provided me, but which they are withholding the release of invoices for. One of these is a contract with EDU Healthcare, signed on May 3, 2023 (his signature is electronic and in tiny font, and the document is upside down for some reason, so it is a little hard to read but I assure you it says Buckner signed it).

Another contract is with the Forest Grove School District signed by Tony Buckner on March 3, 2023 that obligates the Newberg-Dundee school district to pay the Forest Grove School District $61,332 per student that NDS sends to Forest Grove as part of a non-resident special education program. Again, the Newberg school district under Radich has not provided me with the invoices for this program even though it was in the scope of my public records requests.

Tony Buckner also signed a contract on May 30, 2023 with New Directions Solutions dba ProCare Therapy for a nurse, the contract being worth over $100,000.

Additional Claims of Inflated Time Sheets

According to a reliable source in the school district, temporary workers have a history of filling out their time stamp cards incorrectly. It has been claimed that many of these workers hired through these companies fill out their time sheets in pencil and have eraser marks. It is claimed that they over-bill the district for time the worker actually is not working. I can verify based on emails I have seen for myself that this claim is something which both Radich and the other board members are aware of.

While I have filed a public records request for color copies of the time sheets (which one would assume the district would already possess as part of its normal accounting process) the district has not to date provided me with these copies that would reveal if this claim is true or not.

My Assessment of the Documents and Behavior of School Officials

To be frank, I don’t believe the school district has provided me with all of the documents per my public records request. I believe the district under Radich is intentionally withholding the full scope of the illicit spending that contributed to the budget crisis. I believe the documents I have received demonstrate a culture of behavior of illicit spending without proper legal process as required by Oregon state law that is expressly designed to prevent this kinds of overspending, and the Board is now trying to hide its lack of supervision of the district spending in order to justify its illegal hiring of Radich as superintendent and displacement of Phillips to prevent the full scope of the truth coming to light. Radich’s administrating as superintendent simply is not providing documents to me they are legally required to provide. In fact, their efforts to obscure the truth are so disorganized they released some documents to me that show existence of other documents (such as contracts) but did not provide the other related documents (like the other invoices). And they even provided me unsigned contracts, not signed final agreements, demonstrating they are withholding the full scope of documents in the district’s possession.

As I said before, they did not provide me invoices for contracts I do have, and I received invoices that show the existence of contracts the district did not provide me. Considering it has been over a month since I made these public records requests and the district is well beyond its 15 business days time limit to fulfil, and as you can plainly see in Rebecca Brenner’s email to me claiming I need to file new PR requests to get the rest of the documents that are already within the scope of my public records requests, they are trying to delay and obstruct the release of the documents that show the true causes of the budget crisis.

You can click here to download the public records requests I have made for yourself. Given what I have received concerning the invoices and contracts, do you honestly believe the district has actually fulfilled these requests? They definitely have not.

Given these facts, I believe the Newberg Dundee School District budget crisis has a clear cause; employees of the district entering into illegal contracts that functioned as blank checks to spend millions of dollars of the school’s money without any oversight, and the board allowing this by its refusal to disclose these contracts to the public and attempting to cover it up by the illegal hiring of Radich and her obstruction of the release of the full scope of documents that show the extent of this spending.

Instead of the Board taking accountability and working to hold those parties who created the crisis accountable, they instead talks in meetings about creating a new bond measure to resolve the financial crisis, shifting the district’s financial burdens to taxpayers. They make no effort to recover the illegally spent money. They do not even tell the public the truth about how the crisis happened in the first place.

I believe they are trying to to hide the full extent of the illegal spending while simultaneously using the financial crisis to justify the purging of select employees for political reasons unrelated to the budget crisis.

School Board Removes Phillips Bank Access and Empowers Radich

I now want to draw attention to the fact that, during the July 9th Board meeting, the Progressive Yamhill controlled School Board has stripped Dr. Phillips of his access to the school bank accounts and instead installed the illegally hired Radich and her associates, and empowered them to basically move funds around however they want without any prior board approval.

Sources: Pg 46-49, and 51-54 of the July 9th board packet

In addition to these actions being clear evidence that the Board no longer considers Phillips to be the superintendent (they have, after all, stripped him of duties as superintendent while he is legally still the superintendent and replaced him with their illegally hired choice, Radich) it is also evidence that the Board is allowing their agents to do whatever they want with the school’s financial accounts with no supervision before any financial audits have even taken place to investigate the budget crisis. That is a strange move if you actually want to get to the bottom of the real source of the budget crisis, which leads me to the conclusion they are not interested in the real cause of the crisis. What they are interested in doing is moving rapidly to seize control over the district’s money, move funds around, hire and fire employees with no consideration of the law in what is obviously a power grab move by the Progressive Yamhill group. And as you can plainly see by their meetings, no mention of these illegal contracts that caused the budget crisis in the first place.

I think the only logical conclusion for why the Board is seeking to blame Phillips and use the budget crisis to justify the termination of employees who are not part of the Progressive Yamhill social activist group is because these board members are colluding to cover up the true cause. Unfortunately, it will take a law enforcement investigation into their dealings to uncover if this is the case, as the district under Radich is not releasing the full scope of documents necessary to determine if this collusion is occurring or not. As of now, the documents I have collected only allude to this collusion to defraud the district, and is not hard evidence of it. But I see no other explanation for these chain of events. Let me summarize,

• The Board is ignoring state laws pertaining to the hiring of an interim superintendent and the firing of administration staff,
• The Board has given unpaid “volunteers” full control over the district’s bank accounts and enabling them to move funds around without any supervision,
• The Board has hired seven law firms to protect the district from lawsuits they must realize are coming as a result of the Board’s actions,
• Neither Radich nor any of the board members have informed the public that the contracts that caused the budget crisis are illegal,
• The board was fully aware of these illegal contracts with staffing agencies yet took no steps to bring them into compliance, which makes the Board culpable for the budget crisis these contracts caused,
• One of the largest beneficiaries of this illegal spending is a fellow member of their Progressive Yamhill group, Elise Yarnell Hollamon (who is also a Newberg City Councilor).
• The district under Radich is seeking to delay and obstruct the release of documents they are legally required to provide my public records request that would uncover the whole truth of the budget crisis and the knowledge of it to the public.

I think the only way the truth will come to light is by an investigation by law enforcement into the matter and until that occurs the full truth of these events is unlikely to come about. I can only hope that I have gathered enough documentation that someone in law enforcement will take an interest in this situation and start an investigation to determine if there is a conspiracy to defraud the school district through these illegal contracts.

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