NEWBERG, Ore. — The Newberg School Board met to deliberate Monday night on its contract with Superintendent Stephen Phillips, who abruptly took a two-month leave of absence in June after board members reported being blindsided by the news that the district was almost $4 million in debt.
The board's agenda for Monday night included just two items of business — an executive session to consult with legal counsel about their rights "with regard to current litigation or likely to be filed," and a personnel action in open session regarding Phillips' contract.
That open session proved to be brief. All but one of the board members present voted to send Phillips a 12-month notice that his contract will not be renewed, although he'll likely continue to work for the district until his contract is up.
A long history of upheaval
Since 2020, the Newberg School District has been roiled by trials and tribulations that began with the election of an ultra-conservative board majority. The new majority first tried to ban Black Lives Matter and Pride symbols in schools, later expanding the ban to include all political symbols after receiving pushback.
The ban prompted protests, lawsuits and eventually led the board majority to unceremoniously fire then-Superintendent Joe Morelock without cause. Under his contract, they were forced to pay him for the remainder of his term.
Shortly after Morelock's ouster, the board majority hired Phillips — himself coming off a string of controversies — to take Morelock's place.
Citing a hostile working environment created by their colleagues, the members of the board's smaller liberal wing resigned one by one, to be replaced by appointees of the conservative majority. Meanwhile, Newberg's board ultimately lost several lawsuits, including one that forced them to overturn the political symbols ban, and the district was saddled with resulting legal fees.
In May 2023, voters swept out all but one of the conservative board members and replaced them with more liberal or moderate members.
Despite the board's costly controversies of the preceding years, members of the new board said that Phillips was giving them optimistic reports on the Newberg School District's budget well into 2024, claiming that he promised a budget surplus at the end of the school year. Instead, they said they learned from an independent audit in late May that the district was a whopping $3.7 million in debt.
Some parents called for Phillips to step down then and there, circulating an online petition that gathered almost 1,700 signatures.
“I think it’s fair to say I understand," Phillips told KGW about the calls for him to step down in May. "We’re in a budget crisis, and there’s a lot of misunderstanding, but bottom line is people are scared and nervous about the future, and responsibility lies with me.”
During a school board meeting June 11, board members revealed that Phillips would immediately take a two-month leave of absence, and that former Newberg superintendent Paula Radich had agreed to serve as acting superintendent without taking a salary.
Already staring at nearly $4 million in debt for the 2023-24 school year and anticipating an $11 million budget shortfall next year, the Newberg School Board prepared for significant layoffs on top of 30 jobs previously cut.
Terms of the contract
Phillips' contract with the district, provided to KGW after a records request, initially covered a two-year term from July 1, 2022 to June 30, 2024. But the contract specifies that the school board must decide by February whether to renew the contract for another year, which they did prior to the discovery of the district's budget shortfall in May.
The contract allows the Newberg School Board to end it for cause at any time for reasons such as "neglect of duty, unlawful conduct, breach of contract" or for any other reason that an employee of the district can be fired under Oregon law. Phillips is entitled to a hearing before the board if he makes a written request to do so.
As the previous board did with Morelock, they could also terminate Phillips' contract without cause, but they would need to pay his salary for a year — a difficult prospect for a district already in the depths of a financial crisis.
According to the original contract, Phillips had a starting salary of $180,000 per year, with cost of living adjustments for additional years.
During the brief meeting, board members discussed terminating Phillips' contract under a section that refers to terminations without cause. They voted to send him a 12-month notice that his contract will not be renewed, meaning he will continue to draw a salary during that time.
When he returns from medical leave, Phillips will still have a paid role in the district — but it will not be one with the responsibilities of superintendent. But even after that year-long period, Phillips will be able to stay on as a consultant for the district for another year, according to the district's legal counsel.
All board members present — with the exception of Trevor DeHart, the last conservative member — voted in favor of the motion. It was clarified during the meeting that the board can change its mind on whether to end Phillips' contract if they choose.
Meanwhile, Radich's contract with the district is set to end Aug. 13. The board will need to renegotiate with Radich if that term is to be extended. At the same time, there were indications that members of the board will begin looking for a replacement for Phillips in the weeks ahead.