Modesto City Schools drama ending

Modesto City Schools trustees are close to signing off on a financial settlement with Debbe Bailey, the deputy superintendent of business who has been on paid leave for three months.

Trustees met in closed session Thursday afternoon with Superintendent Arturo Flores and the district's lawyer on speakerphone. After 50 minutes, they returned to open session with board President Steve Grenbeaux reading a statement:

"The board has given direction to legal counsel. This is an ongoing process and hopefully this issue can be resolved quickly."

Bailey is the district's second in command. She was suspended after officials discovered some questionable e-mails between her and the Modesto Teachers Association. After digging further, officials found more e-mails, including some with disparaging remarks passed among Bailey, district secretary Pat Nan and Trustee Cindy Marks about Flores.

Flores, believing Bailey was being disloyal, concluded he couldn't trust her. Bailey said she couldn't imagine circumstances where she could return to her post, which she held for eight years. She has said Flores has undermined her authority as chief business official and created a hostile working environment.

"The indication is that all sides want a settlement," Grenbeaux said Thursday.

Though details of the settlement are being hammered out, buying out the last year of Bailey's contract would cost $165,000 plus any retirement benefits, legal fees or other extras the sides agree to.

A settlement would be covered by the district's liability insurance, not the general fund. In 12 months, the district has paid about $400,000 for the insurance, officials said.

Trustees can terminate Bailey for a "material breach" of her contract, but that likely would lead Bailey to sue and the case could end up in court.

Flores released Bailey's performance review to The Bee three weeks ago, along with pages of her e-mails to the teachers union, Nan, Marks and educators. Bailey contends that her correspondence was taken out of context, and that she and Flores butted heads because she had legitimate concerns about the district's financial solvency under his leadership.

Nan retired early in May.

Bee staff writer Michelle Hatfield can be reached at or 578-2339.