Firings, resignations and finger-pointing: How Live Oak School District fell into crisis

When Live Oak School District Superintendent Daisy Morales announced her resignation in mid-March, it was the culmination of months of turmoil that have fueled a pervasive sense of distrust among teachers and parents as the district struggles to deal with a budget crisis.

Interviews with several current and former district staff members underscore how Morales has made a number of improvements since joining nearly three years ago. But they also paint a picture of a culture of fear at the district, turnover in Morales’ district office team, deteriorating relations with the teachers union and a growing public backlash against the district’s leadership and governing board. 

Morales’ resignation — two months into a budget crisis that required layoff notices for more than 50 full-time-equivalent positions — has also raised questions about decisions by the district’s governing board, including why it approved raises for Morales and other senior administrators at a time when the district was trying to slash expenses.

Morales, who will receive her annual salary of about $228,000 as part of her severance, did not agree to an interview with Lookout for this story, but responded to several questions by email. 

However, in her letter to staff and parents earlier this month announcing her resignation, effective June 30, she acknowledged the breakdown in her relationship with others in the district. 

“I wholeheartedly came into this district with a sense of appreciation and a genuine desire to contribute to the growth and well-being of our students, staff and families,” she wrote. “However, recent events have made it clear that my leadership is not a good match for the district.” 

A hopeful start to Morales’ tenure

Morales joined Live Oak School District as superintendent in July 2021 from Salinas City Elementary School District, where she was assistant superintendent of educational services. 

Teachers and staff say Morales got off to a positive start. She began planning for a workforce housing project, helped the district win state grants to develop community engagement and approved raises for the classified union — which includes bus drivers, librarians and classroom aides. 

Diana Susoy, president of the union that represents about 100 classified employees in the district, said Morales was the first superintendent to advocate for raising the minimum base pay from $15 to $18. 

Susoy said she often called Morales “an Energizer bunny” because of her ability to keep track of dozens of school programs. 

Susoy said Morales maintained a more amicable relationship with the union representing classified employees than with the teachers union. She noted, however, that Morales sometimes lacked patience when it came to making decisions. 

“She did have a tendency to be quick about decisions in regards to people and not having the patience to deal with stuff,” she said. “Sometimes it was justified – like an employee who keeps making the same mistake over and over and over again, you run out of patience with them.” 

Tensions mount during labor negotiations

Teachers union co-president Lauren Pomrantz said Morales initially seemed to be a good communicator and productive leader. But the relationship between Morales and union leaders began to break down during contract negotiations for newly unionized preschool teachers in the spring of 2023. 

Pomrantz said teachers thought they would be negotiating primarily for a raise. Instead, Morales and the district’s bargaining team came to the table with the news that the district was moving to full-day preschool. The plan was to replace the existing twice-daily, 3.5-hour preschool sessions that ran for about six months of the year with a roughly eight-month school year consisting of a single 8-9-hour session per day.

Teachers fought the plan, which they feared would increase their workday without raising their base pay and reduce their summer break. Morales, Pomrantz says, responded poorly, telling teachers, “If they don’t like it, they can leave” and, “I’ve got people to take their jobs.” 

“That’s where for me, personally, I started to lose my sense of camaraderie and collaborative work with Dr. Morales,” said Pomrantz. 

The union eventually won raises for the preschool teachers, and the district agreed to move only one of the preschool programs to the longer day. Still, Pomrantz said she felt terrible about Morales’ behavior. 

“That’s how you feel about teachers? That they’re replaceable, regardless of how long they’ve worked here, regardless of how much information they bring to the programs?” she asked. “I felt embarrassed by the conduct.”

Pomrantz said Morales removed herself from teachers negotiations when sessions began in the fall. Without Morales at the bargaining table, Pomrantz said, things were much easier. 

“From then on, we had very productive bargaining,” she said. “Both sides of the table would agree it was very productive. It was amicable, collaborative. We got a lot done; we ended up settling” around the end of October.

Resignations and terminations bring instability 

In addition to strained relations between Morales and the teachers union, current and former employees said there have also been issues among office staff, tensions with school administrators and, since the fall, high turnover among district leaders. 

Several current and former employees told Lookout that if employees disagreed with Morales, or her orders given through her staff, they were disciplined or called into meetings and risked termination. 

A senior school official told Lookout that Morales warned them not to speak to the media about challenges in the district and Morales’ personnel decisions. “She is retaliatory,” they said. In response, Morales said “that personnel matters/decisions are confidential and should not be shared with anyone.” 

One former employee cited poor working conditions at the district headquarters, telling Lookout that staff sometimes used offensive language in the office, including imitating and making derogatory jokes about Asian people. The former employee said she took her concerns to human resources. She told Lookout that she was let go just five months into their time at the district and told she was “not a good fit.”

Morales told Lookout that she wasn’t aware of people making offensive jokes in the district offices and that no one had reported it. “I have never witnessed this in the district office or any of the schools,” she wrote via email. “If this occurred, it never happened in my presence. I would have put a stop to it. Also, we have never had anyone report this to HR or file a complaint.”

Emily Avila, the teachers union co-president, said a culture of “us versus them” developed between front-line staff and the superintendent and her team.

Relations were particularly strained with the district’s recently hired director of special education, Don Scheerschmidt, after special education staff were written up about 12 different times. 

The reprimands began before students were back in school, on the first day back for teachers last fall. Avila said three staff members were formally reprimanded — meaning the incidents went on their permanent records — in a single day. She said it was for allegedly violating district rules regarding interdistrict transfers, adding that she couldn’t elaborate because of confidentiality. 

Avila says that number of reprimands was unprecedented for the district as she doesn’t recall any reprimands the prior year. “It was absolutely not justified,” said Avila. “There isn’t a single [special education] staff member that would ever do anything that will jeopardize themselves, our school or a student.” 

Shoreline Middle School teacher Jeremy Powell, a former union co-president, also said he felt the reprimands were unwarranted. 

Avila said she took the concerns to Morales. She said Morales declined to look into the mounting complaints against special education staff — many of whom had been with the district for more than 20 years and had no record of discipline — saying she trusted district officials to do their jobs well. 

“She said she expected her staff to be on top of things and stuff would come across her desk and she would just sign off on it,” said Avila. “She wouldn’t look it over because she expected that what was coming across her desk was accurate.” 

As the conflicts built up, teachers and staff members say Morales began retreating from meetings and school sites and, most recently, stopped sending out her weekly newsletter. 

Board member Jeremy Ray said that while Morales was efficient, she didn’t know when to ease the pressure on staff as she worked to implement new programs.  

“I think Daisy will probably learn from this that she needs to do a better job sometimes of measuring that. And knowing when you have to ease up a little and knowing that sometimes, or always, that relationships are more important than any individual goal or objective,” he said. “I think that is the primary reason why we find ourselves in the position that we’re in.”

Staffing shakeups

At the Feb. 7 meeting, the board announced that Scheerschmidt, the special education director who had been hired in July 2023, was on an extended medical leave and that then-Green Acres Elementary Principal Rebecca Dominguez would be taking his place. Weeks later, the district approved Scheerschmidt’s resignation effective June 30, 2024. 

The staffing shakeup is one of several among senior district officials in recent months.

In October, just as labor negotiations with teachers were near finalizing, chief business officer Alison Warner, who had joined Live Oak from Soquel Union Elementary School District in late 2021, announced her departure. She returned to Soquel as the assistant superintendent of business services. Board documents from mid-October described her departure from Live Oak as “sudden.”

School psychologist Melissa Rosenoff said teachers were surprised to learn that Warner left, as she had a big role at the bargaining table. “We were shocked,” she said. “It was in the middle of negotiations.”

Rosenoff herself resigned from the district on Monday – a decision she says she struggled with. 

“The circumstances with Live Oak School District have been heartbreaking for me to watch and experience as an employee of the district and as the parent of a child attending the district,” she told Lookout. “My decision to resign was not made in haste, it was agonizing for me because I love Live Oak so much and I will miss my fabulous, dedicated, hard-working colleagues.” 

The district changed Warner’s job title to assistant superintendent of business services and hired Hanwool Kim into the position in November. 

Then, in February, as the district was struggling to get out of a budget crisis that forced it to issue dozens of layoff notices, assistant superintendent of human resources Heidi Winner Odom announced her resignation. Odom, who had helped draft the proposed layoffs, told the district that “prioritizing my mental and physical well-being, as well as the needs of my family, must now take precedence.” 

Weeks later, at the March 13 board meeting, Kim told the board that Morales had fired him the day before. He said she told him he was “not a good fit,” and he urged the board to investigate her for possible termination.

Budget crisis catches community by surprise

Ray confirmed to Lookout that Kim was let go because he was “not a good fit” and said he could not comment further on why Kim was no longer with the district. Ray did, however, point to problems with the district’s first interim budget.

School districts are required to complete a first interim budget by Dec. 15 for the period ending Oct. 31, and a second interim budget by March 17 for the period ending Jan. 31. The districts send the reports to the Santa Cruz County Office of Education for review. The county office compares the interim budgets to the districts’ approved budgets to ensure the districts can meet their financial obligations. 

In January, the County Office of Education notified Live Oak that its first interim budget would receive a negative certification – meaning that the district wasn’t going to meet its financial obligations in the 2024-25 school year and subsequent years. The COE’s negative budget rating raised the specter of a state takeover, prompting the district to issue dozens of layoff notices to teachers and other staff. 

Ray said someone at the COE later told district officials that the negative certification probably wasn’t warranted, meaning the Live Oak board had rushed to approve deep budget cuts when no urgency was required. District staff, along with a newly hired interim director of business services, scrambled to review the budget “and found the places where things were not done correctly,” he said.

“Ultimately, the County Office of Education determined and agreed that the negative financial certification shouldn’t have happened,” Ray said. 

Ray said the first interim budget prepared by Kim showed money being used from the general fund that should have come from restricted funds. 

“The way that Han projected paying for certain expenses made it appear that the district had a significantly larger budget deficit than we were actually going to have next fiscal year and then even more so in the following two fiscal years,” said Ray.

However, County Superintendent of Schools Faris Sabbah told Lookout on Friday that the negative certification was indeed necessary. To avoid it, the district would have had to plan for a round of layoffs much earlier in the year and included those cuts in the budget it sent to the county for review. 

“We don’t believe the negative certification was done in error,” Sabbah said. “The one thing that would have prevented us from giving the negative certification to the district would have been if significant reductions had been included for them to meet their reserves and their cash flow issues.” 

Kim told reporters after the March 13 meeting that it was inaccurate to suggest that his work on the budget had caused errors and said that the district’s business team had been trying to fix the problems.

“To have that presented like we messed up – we were trying to clear it up,” he said. “That just doesn’t feel right.”

He added that Morales didn’t mention budget errors as being the reason behind his termination. “I gave her the benefit of the doubt,” he said. “I trusted her experience and her strategy.”

Renewed scrutiny on trustees

The budget crisis and Morales’ resignation have added scrutiny to decisions by the board tasked with overseeing the district. 

Many parents and teachers say they didn’t learn of the budget crisis until late February or later. During board meetings, parents, teachers and staff accused the superintendent and board members of failing to inform the community about what was happening. Avila said Morales didn’t address teachers once in the weeks after the district learned of the budget crisis. 

During a Feb. 29 meeting, Morales said she was very focused on grant application deadlines in January and February and she should have spoken up sooner about the budget crisis. “As a leader, I know that I haven’t been what you needed me to be,” she said. “I own the part of it that is on me. I should have spoken up sooner, providing context, being a wiser counsel to the board members.”

Teachers and parents also criticized the board for approving 5% raises for Morales and assistant superintendents — totaling about $40,000 — in the midst of the budget crisis. After an outcry from teachers and parents, Morales and the superintendents voluntarily rescinded their raises.

When asked via email why the board approved the raises, board president Kristin Pfotenhauer said Morales’ contract contained a “me too” raise that increased her salary in line with raises the board was approving for unionized staff. “It is pretty traditional that when a union contract is signed, the rest of the staff in a district get a similar raise,” she wrote. 

Former union president Powell said the raises are part of the district’s failure to acknowledge concerns of a growing administrative office with rising salaries. “What we’ve seen over the last several years is that the district office grows, financial analysts are hired and our budgetary skills get worse,” he said. “And that’s infuriating.” 

Teachers also questioned the board’s decision to approve a plan to reorganize four senior administrative positions and the jobs of two school principals at the same closed-door meeting where they accepted Morales’ resignation. 

Ray said the plan was a collaborative effort between Morales and the board members and was not solely based on Morales’ recommendation. 

As part of the reorganization, longtime Shoreline Middle School principal Colleen Martin is being moved to Green Acres Elementary School, while Green Acres principal Marilyn Rockey will become principal of Shoreline Middle. Martin has been at Shoreline since 2010, while Rockey has been at Green Acres only since March 1. 

Parents and teachers described Martin and Shoreline Assistant Principal Melissa Nix as a “dream team,” adept at resolving student concerns and taking care of the staff. When the district proposed slashing Nix’s hours as assistant principal in half as part of its budget cuts, several community members pushed back. Now, teachers say they’re shocked that the district has agreed to reassign Martin to another school.  

“The inefficiency of making this change is not in the best interest of students, staff, let alone considering out of respect for these principals,” Cynthia Strauss, a longtime speech language pathologist in the district, wrote to Lookout. “The LOSD board has clearly not taken multiple perspectives and continue down a path of not seeing the whole picture of how best to serve our district.” 

Serena Potter, who has two children in Live Oak Elementary School, said some parents have interpreted the reassignments of the principals as a backlash against them speaking out over the district’s budget cuts. “That doesn’t look like retaliation?” she asked. 

She said she’s very concerned about the switching of Martin and Rockey. She watched how the Shoreline Middle School community, including many students, rallied in support of keeping Martin and Nix together at the school. 

“I’m a Live Oak Elementary mom and I’m concerned about Shoreline and I’m concerned about Green Acres,” she said. “Ultimately, it’s our district – we have a problem with our district and the decisions they’re making.” 

Ray said he agreed to the reassignments because parents had been asking for some of the changes, such as to special education and student services personnel. The board also wanted to bring stability to Green Acres. Ray said Green Acres had struggled under its previous principal, Rebecca Dominguez, and she had a “rough run” there.  

“The teachers found her very difficult to work with and that was made very clear,” he said.

Ray said Rockey is believed to be planning to retire within the next year or so, while Martin is expected to have more years left in her career and is in a better position to bring stability to Green Acres. “Martin is probably the strongest principal that we have in the district right now,” he said.

Susoy, the classified union president, said she’s worried about what will happen at the district come the fall, given the reassignments and Morales’ resignation.  

“It’s a lot of changes,” she said. “It’s going to be a lot of people trying to get settled with new positions – I’m afraid a lot of stuff will be falling through the cracks and I sincerely hope not.”

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