Florida State College at Jacksonville President Steven Wallace resigns

Wallace sent email offering 'soft landing' before Tuesday's special meeting

JACKSONVILLE, Fla. - As the Florida State College at Jacksonville's board of trustees were to convene a special meeting to talk about terminating President Steven Wallace's employment contract, he offered to resign at the end of this year and leave the college in 2014.

After more than two hours of discussion, the board approved a modified contract that will pay Wallace nearly $1.2 million in pay and benefits over the next 20 months.

In an email to the board, Wallace offered the alternative contract in which he would step down as president at the end of this year, then remain with the college in a reduced capacity through June 2014. He wrote this would allow him a "soft landing."

"At this point the key consideration for me and my family is to be treated fairly in recognition of my 15 years of successful leadership, in taking this college to a significantly higher level," Wallace told the board.

Over the last week, the board began considering its options and costs to part ways with Wallace.  During Tuesday morning's discussions, the board's attorney said Wallace could be paid over the next two years under his suggested contract modification.

Douglas Burnett, vice-chairman of the board, told the trustees he preferred a "clean crisp break," and was the only person to vote against the retirement package.

"I had to vote no because I didn't feel like what was on the table met the test of reasonableness" Burnett said.

In approving Wallace's amended contract, the board said he would be on special assignment after Jan. 1, 2013, work from home, not use any school resources or funds.

Wallace pointed out the trustees signed Wallace to a new, four-year contract in June.

"This is a win-win," board of trustees Chairwoman Gwen Yates said after the meeting. " I think the board came together, and I think they were engaged and they dealt with a very, very difficult situation."

The board said it would discuss the search process for its next president at its scheduled Nov. 6 meeting.

Growing crisis of leadership

Wallace has been under increasing criticism after two audits of the college's finances and management structure, $4.7 million in inappropriate awards of federal Pell grants, and the subsequent discipline and demotion of employees.

Last week, Yates authorized former board chairman to discuss "matters involving the employment contract of Wallace and make recommendations for possible resolution."

Documents obtained by Channel 4 from FSCJ showed officials were looking at the cost of "separation" with Wallace, which would vary from $362,160 if he was terminated for "cause," to nearly $800,000 if he leaves voluntarily, to $851,020 if he is let go "without cause."

DOCUMENTS: Wallace's employment discussions | Trustee Suanne Thamm's email

Florida State Sen. Steve Oelrich, of Gainesville, has called for a grand jury investigation into FSCJ for a number of reasons. The college wrongly approved 1,700 federal loans, and Wallace may have misused public funds, according to Oelrich.

"There is just so much suspicion. And me as the higher chairman, I've got serious concerns about how that college is being conducted in the past, and there's good evidence of a coverup," Oelrich said.

A state audit looked into whether Wallace moved nearly 100 days of unused sick leave into his vacation. The audit deemed the move legal because it's money that would be paid to him.

Celine McArthur, a former investigative reporter who briefly worked for the college, blew the whistle on the school's financial mismanagement earlier this year and has provided documents to the state about issues at the school.

"The key points that I brought up were wasteful spending, lack of transparency, gross mismanagement, unethical and unlawful behavior -- and the case has expanded since then," McArthur told Channel 4 on Tuesday during The Morning Show.

McArthur said she regularly sends information to the governor's office, hoping he'll call for a grand jury investigation into how FSCJ has been run.

"I've sent him every piece of information. I really hope so. He has campaigned on eliminating waste in government, and this is one case," McArthur said. 

Last Sunday, Gov. Rick Scott ordered top-down review at FSCJ.

Suanne Thamm, one of the FSCJ trustees, said in an email that it looks like Wallace will announce his "retirement" in order to forestall the governor's removal of the entire board of trustees.

"You might think that the governor would deal directly with his board on matters like college leadership. But, no. We get to read his opinions in the newspaper," Thamm wrote. "We've come a long way ... from the politics of Jeb Bush, the governor who appointed us because he cared about the future of our state's education programs and future. Even lipstick won't help the current pig."

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