ONTARIO, Calif. (KNX) — The superintendent of the Ontario-Montclair School District took out a line of credit against a town house the district helped him buy, adding nearly $100,000 in new debt against the property before persuading the school board to pay off both the mortgage and the credit, according to a Southern California News Group report.
James Hammond then sold the town house for $389,000 in 2017 and pocketed the proceeds, SCNG reported. He continued to collect housing payments from the board, totaling $114,000 over the ensuing two years.
When all was said and done, public records showed the district gave Hammond $331,000 total for a property he had originally purchased for $235,000.
A representative for the district told SCNG that administrators struggled to persuade superintendents to live inside district lines. When Hammond was hired, he agreed to do so — but not before telling the board he could not afford to buy a home within the district. Thus, the board agreed to extend to him a ten-year, $100,000 loan.
But board members eventually agreed to not only forgive the original loan and accrued interest in eight years without a single payment from the superintendent, SCNG reported. They also agreed to pay Hammond an additional $231,000 spread over four years, from 2015 to 2019, for the purposes of “paying down the principal” on the town house.
But the principal had grown significantly because of the line of credit.
The arrangement has puzzled taxpayers and former board members, as Hammond was California’s highest paid superintendent for the last three years, according to state records. His total compensation in 2020 was nearly $700,000. Though he no longer receives housing assistance, he is entitled to 110 days of leave he can cash out every year, lifetime health benefits, and $130,000 in annual retirement contributions.
Property records released by the district showed the $100,000 difference in what the district paid over the original sales price of the town house came in the form of a line of credit Hammond opened against the property after receiving the initial loan.
According to SCNG, Hammond said he used the district’s original loan in 2011 as a down payment. Then, the district’s lien on the property was subordinate to a $138,885 mortgage from Sterling Bank in the form of a promissory note.
In 2013, the board agreed to amend the note, reordering priority of lenders in the event of a default. The district’s loan was pushed behind the Sterling mortgage and a $46,000 home equity line of credit to Hammond extended by the Ontario-Montclair Employees Federal Credit Union, according to a district staff report.
When Hammond sold the town house in 2017, he should have been asked to pay what he still owed on the loan (about $40,000) from the proceeds, per the terms of his contract. That didn’t happen, SCNG reported. In fact, the district was not made aware that Hammond had sold the property until he purchased a second residence in Ontario — a 3,029-square-foot, four-bedroom home for $850,000. He later transferred ownership of the property to JM&M Development Corp., a company registered to and solely owned by him.
Today, the home is valued at $1.12 million, according to realtor estimates.
Board President Elvia Rivas told SCNG that Hammond had not violated the terms of any agreement with the district. The board’s intent was for him to live in the district, and that continued after he moved to his second residence.
“The particulars of his contract are clearly stated: If Dr. Hammond remained a resident of the district, over time the board would contribute to his housing,” she said. “Both parties met their obligations in this regard.”
But the original loan agreement with Hammond in 2011 required an appraisal that the district seemed to have no record of completing. It also said that the original loan was contingent on approval from the San Bernardino County Office of Education, but SCNG found there was never any written record of such approval.
In a statement, County Superintendent Ted Alejandre said: “The authority to approve the terms and conditions of a district-level superintendent’s contract rests solely with the district's respective governing board, which serves as the superintendent’s employer of record.”
At a Nov. 18 school board meeting, Hammond was reportedly unapologetic about the pay and perks he has received over the years.
“This isn’t the first time that articles have been written about my contracts, and it certainly won’t be the last time,” he said.
Meanwhile, the median household income in the Ontario-Montclair area was $65,046 as of 2019, according to the U.S. Census Bureau — roughly a tenth of what Hammond takes home in annual compensation.
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