Lawmakers call for audit of Tolleson Union High School District’s finances
How did your country report this? Share your view in the comments.
Diverging Reports Breakdown
Legislative committee focuses on Phoenix school in receivership, real estate deal
Arizona lawmakers want more accountability for taxpayer dollars going to public schools. Their eyes are on two Valley school districts. The Isaac School District in Phoenix went under a state receivership due to a cash deficit of several million dollars. The nearby Tolleson Union High School district stepped in to bail Isaac out by buying the other district’s property for $25 million. Some lawmakers are disturbed by Isaac’s unusual deal with Tolleson and the financial situation Isaac got into.
Earlier this year, the Isaac School District in Phoenix went under a state receivership due to a cash deficit of several million dollars.
The nearby Tolleson Union High School district stepped in to bail Isaac out by buying the other district’s property for $25 million.
Isaac will pay that money back gradually with interest.
However, some lawmakers are disturbed by Isaac’s unusual deal with Tolleson and the financial situation Isaac got into in the first place.
“It’s this kind of stuff that is showing up as an epidemic throughout, not just school systems, but it’s the lack of focus, on mission, of what we are spending taxpayer money on,” said Sen. Mark Finchem (R-Prescott), the Joint Legislative Audit Committee co-chair, at a hearing on Friday.
Fellow committee co-chair Rep. Matt Gress (R-Phoenix) said in a text that the committee is “exploring the need” for more audits and gathering more information.
The Arizona Auditor General’s Office had marked Isaac high risk for several years leading up to the receivership.
Gress is also sponsoring a bill that would require school board members of failing schools to resign and ban real estate deals like the one between Tolleson and Isaac.
Lawmakers and speakers brought up slipping test scores, financial mismanagement and alleged conflicts of interest in hiring
“It’s just a notorious policy. I just don’t think that school districts should become a friends and family employment center,” Gress said.
One question that resurfaced is about the role of Tolleson Superintendent Jeremey Calles, who also did work as a consultant for Isaac and helped broker the deal between the districts.
The receiver, Keith Kenny, issued a bleak report on Isaac in May .
Kenny testified to the legislative panel that Isaac was probably “the worst situation” he’s ever walked into.
Arizona lawmakers probe superintendent over $25M school real estate deal
Tolleson Union High School District entered into a leaseback deal with the Isaac Elementary School District in January. Isaac would sell Isaac Middle School to TUHSD for $25 million and Tolleson would then lease back the building at 6% interest. The agreement included no prepayment penalty and no lock in requirement for Isaac. The benefit for Tolleson Union students, Calles said, was by generating up to $7 million more than the district had before. But there was some pushback from committee members who questioned how the move would help the district, which has a “B” letter grade from the State Board of Education.
It all unfolded during a Joint Legislative Audit Committee hearing on Monday morning. The JLAC oversees all audit functions of the Legislature and state agencies.
In January, the Tolleson Union High School District entered into a leaseback deal with the Isaac Elementary School District, where Isaac would sell Isaac Middle School to TUHSD for $25 million and Tolleson would then lease back the building at 6% interest.
“The first conversation I had came from a text message from, yes, the prior superintendent, Mr. Mario Ventura, who texted me and asked if I could take a look at his finances,” said TUHSD Superintendent Jeremy Calles.
Calles works two jobs, as superintendent and also as a consultant. He said that when the Isaac Elementary School District first contacted him it was in his role as a consultant. But when his own district got involved, Calles’ involvement changed. He says he never billed a dime and the Isaac Elementary School District has never been a client of his.
“This is not a new concept; the only thing novel on this idea is that both sides of the transaction, you have a school district. Everything else about this transaction, both sides of the transaction are not unseen,” said Calles.
He said the agreement included no prepayment penalty and no lock in requirement for Isaac Elementary School District and helped the district out during its financial crisis. The benefit for Tolleson Union students, Calles said, was by generating up to $7 million more than the district had before.
But there was some pushback from committee members who questioned how the move would help the district, which has a “B” letter grade from the State Board of Education but less than 30% of students are proficient in math and ELA.
“Here, you have not been able to demonstrate the $25 million financial transaction benefitting Tolleson Union students directly, given that you have no square footage, you’re not providing any learning services. It’s not even in your district so this is far beyond novel. I think you’ve made a mockery of our state law,” said Rep. Matt Gress, a Republican from central Phoenix.
There have also been other controversies surrounding the TUHSD, including a sexual harassment claim involving top district officials and a recent deal to build affordable housing.
Towards the end of the hearing, multiple city of Tolleson officials, including the city manager, voiced concerns they have with Calles.
Calles has previously told Arizona’s Family that the motives behind the complaints against him have to do with local politics and perceived power.
See a spelling or grammatical error in our story? Please click here to report it.
Do you have a photo or video of a breaking news story? Send it to us here with a brief description.
Copyright 2025 KTVK/KPHO. All rights reserved.
Tolleson district bailed out Phoenix schools in budget shortfall. GOP lawmakers want an audit
Tolleson Union High School District agreed to purchase buildings from nearby Isaac School District. The state Board of Education had voted in January to put Isaac in receivership amid a massive budget shortfall in the district. Tolleson officials would sell the buildings back to Isaac, plus interest, over several years. Republicans like state Sen. Mark Finchem criticized the agreement arranged by Tolleson Superintendent Jeremy Calles. Calles defended the district, noting that Tolleson has a higher graduation rate than the state average and only slightly worse math proficiency scores than other schools. The Joint Legislative Audit Committee will vote on an audit of Tolleson at a later date. The vote was delayed to gather more information from the Auditor General’s Office, a spokesman said. The hearing was held at the Arizona State Capitol.
Earlier this year, Tolleson agreed to purchase millions of dollars worth of buildings owned by the nearby Isaac School District in Phoenix. The state Board of Education had voted in January to put Isaac in receivership amid a massive budget shortfall in the district, and the cash from Tolleson provided a bailout for Isaac schools.
According to the terms of the sale, Tolleson officials would sell the buildings back to Isaac, plus interest, over several years.
At a hearing of the Joint Legislative Audit Committee, Republicans like state Sen. Mark Finchem (R-Prescott) criticized the agreement arranged by Tolleson Superintendent Jeremy Calles.
“Everything that has to do with the safeguarding of taxpayers’ taxpayer dollars and process. Just from what we heard today, it’s a hot mess when it comes to due process,” Finchem said.
Rep. Matt Gress (R-Phoenix) accused Calles of treating the district like a revenue making opportunity, rather than an investment in students.
“It really reeks of corruption, so we’ll get to the bottom of it,” Gress said.
Calles said the arrangement with Isaac isn’t unusual. He noted Arizona’s lease purchases with the state’s own buildings during the Great Recession, as well as the Kyrene Elementary School District, which is in a ground lease with a developer.
“The only thing novel on this idea is the fact that on both sides of the transaction you have a school district. Everything else about this transaction, both sides of the transaction are not unseen,” he said.
Rep. Stephanie Stahl-Hamilton (D-Tucson) defended the bailout.
“It seems like if I care about the kids in my own neighborhood, it’s just as easy to care about the kids in the next neighborhood. I would guess that that would be a driving force in wanting to have success in both neighborhoods,” she said.
But Gress said it’s not the role of a public school to act as a bank.
“You’re stockpiling all this cash when you don’t have a cash problem, you have the highest paid teachers in the state. You’re the highest paid superintendent in the state,” he said.
Gress accused Calles of using a beleaguered school district like Isaac in a predatory way, knowing taxpayers will be fleeced to pay Tolleson back with interest.
Calles was engaged as a consultant for the Isaac district at the same time he served as superintendent in Tolleson. Calles said the former Issaac superintendent, Mario Ventura, asked for his assistance, but that he personally didn’t profit from the sale.
“At the point that Superintendent Ventura no longer had any control over what was going to happen with the Isaac School District, that is where my consulting ended. I never billed for a single dime. … I have never in my life received a single dime from Isaac School District,” he said.
Finchem also questioned why Tolleson has low test scores with 22% proficiency for students in math.
Calles defended the district, noting that Tolleson has a higher graduation rate than the state average and only slightly worse math proficiency scores.
As for the audit, whether or not one happens will be up to a vote of the Joint Legislative Audit Committee at a later date. Gress said lawmakers held off holding the vote immediately on Monday to gather more information from the Auditor General’s Office.
Tolleson superintendent endures brutal legislative hearing as community leaders speak out against him
GOP-led committee plans to call for audit of West Valley district. Superintendent Jeremy Calles brands critical statements as lies, potentially defamatory. City Manager Reyes Medrano Jr., along with Police Chief Rudy Mendoza and former school superintendent Kino Flores, publicly questioned Calles’s conduct.Questions at the hearing focused on whether spending and borrowing decisions under Calles’ leadership were shortchanging students and taxpayers. “I don’t think every school district has a superintendent willing to stand in front of you like this,” Calles responded when pressed about his financial practices. “Do you see our improvement on the letter grade system? You see that our schools are moving up on their performance?” Calles said. “When Auditor General’s Office finally sends me someone. I’ll give them the full story,” he said.”I think you should be ashamed of yourself for the way you’ve mistreated taxpayers of Tolleson Union,” Republican State Representative Matt Gress told Calles. “That was an easy answer to say, ‘No,'” Medrano said after the hearing.
Example video title will go here for this video
Next up in 5
Example video title will go here for this video
Next up in 5
To stream 12News on your phone, you need the 12News app.
PHOENIX — The superintendent of the Tolleson Union High School District faced intense scrutiny during a three-hour legislative hearing Monday, with his own community leaders joining state lawmakers in questioning his job performance and financial decisions.
When it was over, embattled Superintendent Jeremy Calles accused city officials of lying and claimed one of them made potentially defamatory comments.
The hearing’s immediate fallout appears significant.
Audit Committee co-chair Senator Mark Finchem announced he would be calling for a formal audit of Tolleson Union. Arizona Auditor General Lindsay Perry was sitting in the hearing room’s front row, taking notes throughout the proceedings.
Calles appeared before the Legislature’s joint audit committee to answer questions that went far beyond his controversial $25 million bailout of the struggling Isaac School District earlier this year.
Republican lawmakers grilled him on issues ranging from school safety and student performance to his business ethics.
Calles owns a consulting business that specializes in school finance.
“I think you should be ashamed of yourself for the way you’ve mistreated taxpayers of Tolleson Union,” Republican State Representative Matt Gress told Calles. Gress has been a harsh critic of the Isaac sale-leaseback arrangement since its unveiling.
Questions at the hearing focused on whether spending and borrowing decisions under Calles’ leadership were shortchanging students and taxpayers.
Finchem twice shut down Democratic Representative Stephanie Stahl Hamilton of Tucson before she could ask a question.
“Stop, stop, stop or I’ll ask you to leave the panel,” Finchem said, as Stahl Hamilton was formulating a question about the impact of school choice on public school districts’ financial situations.
Calles presented slides showing his district’s high credit ratings and first-in-the-state teacher pay.
The embattled superintendent remained defiant throughout the hearing.
“I don’t think every school district has a superintendent willing to stand in front of you like this,” Calles responded when pressed about his financial practices.
Tolleson City Manager Reyes Medrano Jr., along with Police Chief Rudy Mendoza and former school superintendent Kino Flores, publicly questioned Calles’s conduct.
Medrano alleged that Calles had asked the city to pay Calles’ real estate broker $85,000 in connection with the school district’s purchase of city land, which Medrano suggested would have violated state procurement law.
“The 85 was going to be on top of the purchase price, and then we were supposed to pay the broker with it,” Medrano said in an interview after the hearing.
According to Medrano, Calles’s explanation was “it would be cleaner” for him.
“Tolleson will never violate procurement law. And that was an easy answer to say, ‘No,'” Medrano said after the hearing.
Calles fired back, calling the allegation potentially defamatory.
“I believe that borderlines defamation, the way he made that implication as if something nefarious was happening,” he said in an interview after the hearing.
When asked what district residents, teachers, and parents should think about the allegations at the hearing, Calles dismissed them entirely.
“That they’re all lies,” he said. “Do you see our improvement on the letter grade system? You see that our schools are moving up on their performance?”
Calles had anticipated that the committee would request a review by the auditor general.
“When Auditor General’s Office finally sends me someone. I’ll give them the full story,” he said.
Watch 12News+ for free
You can now watch 12News content anytime, anywhere, thanks to the 12News+ app!
The free 12News+ app from 12News lets users stream live events — including daily newscasts like “Today in AZ” and “12 News” and our daily lifestyle program, “Arizona Midday”—on Roku and Amazon Fire TV.
12News+ showcases live video throughout the day for breaking news, local news, weather and even an occasional moment of Zen showcasing breathtaking sights from across Arizona.
Users can also watch on-demand videos of top stories, local politics, I-Team investigations, Arizona-specific features and vintage videos from the 12News archives.
Roku: Add the channel from the Roku store or by searching for “12 News KPNX.”
Amazon Fire TV: Search for “12 News KPNX” to find the free 12News+ app to add to your account, or have the 12News+ app delivered directly to your Amazon Fire TV through Amazon.com or the Amazon app.
Up to Speed
Tolleson Superintendent Faces Intense Hearing With Lawmakers For Unusual Real Estate Deal
The Joint Legislative Audit Committee (JLAC) held a three-hour hearing on Tolleson Union High School District’s leaseback deal with the Isaac Elementary School District. Tolleson Superintendent Jeremy Calles was the subject of intense grilling during the hearing. Calles confirmed that he holds two professional roles, one as a consultant and the second as Superintendent. He claimed that the agreement between the districts lacked a prepayment penalty, had no lock-in requirement, and aided the district in a financial crisis. He suggested that the benefit for TUHSD students was in generating up to $7 million in funding for the district. However, committee members balked at this suggestion, noting that although the district holds a “B” letter grade from the Arizona State Board of Education, only 30% of its students are proficient in Mathematics, English, and Language Arts. Gress told reporters that he and Finchem “will be reviewing our options with the Auditor General’s office”
Tolleson Union High School District Superintendent Jeremy Calles found himself the subject of intense grilling at the hands of Joint Legislative Audit Committee (JLAC) Co-Chairmen Matt Gress and Mark Finchem during a three-hour hearing this week. Following the exchange, Gress told reporters that he and Finchem “will be reviewing our options with the Auditor General.”
The fiery hearing came about in response to concerns over a Tolleson Union High School District (TUHSD) leaseback deal with the Isaac Elementary School District that would see TUHSD purchase Isaac Middle School for $25 million with the elementary district then leasing the building at an interest rate of 6%.
🚨The #AZLeg’s Joint Legislative Audit Committee (JLAC) examined the novel actions and dealings of Tolleson Union High School District (TUHSD). Unusual real estate transactions, a Superintendent with two private consulting firms, staff with dual roles working for the district and… — Arizona House Republicans (@AZHouseGOP) July 24, 2025
Calles revealed in the hearing that he holds two professional roles, one as a consultant and the second as Superintendent, and he confirmed to the committee that initial conversations on the deal began in his role as a consultant.
He told the JLAC, “The first conversation I had came from a text message from, yes, the prior superintendent, Mr. Mario Ventura, who texted me and asked if I could take a look at his finances.”
This week’s Audit Committee hearing was one of the most bizarre hearings I’ve attended.
Check out the recap below! 👇👇👇 https://t.co/JzbdthUjGa — Matt Gress (@MatthewGress) July 24, 2025
Calles explained that when his district became involved, his role in the deal changed, although he claimed to have never billed for the conversation and never contracted with Isaac Elementary School District as a consultation client.
“This is not a new concept; the only thing novel on this idea is that both sides of the transaction, you have a school district. Everything else about this transaction, both sides of the transaction are not unseen,” he told lawmakers.
The Superintendent said that the agreement between the districts lacked a prepayment penalty, had no lock-in requirement, and aided the district in a financial crisis. He suggested that the benefit for TUHSD students was in generating up to $7 million in funding for the district. However, committee members balked at this suggestion, noting that although the district holds a “B” letter grade from the Arizona State Board of Education, only 30% of its students are proficient in Mathematics, English, and Language Arts.
Gress challenged him, “Here, you have not been able to demonstrate the $25 million financial transaction benefitting Tolleson Union students directly, given that you have no square footage, you’re not providing any learning services. It’s not even in your district so this is far beyond novel. I think you’ve made a mockery of our state law.”
He added, “I think you should be ashamed of yourself for the way you’ve mistreated taxpayers of Tolleson Union.”
10/ Take a look at this bizarre response to @AZHouseGOP Majority Leader @MichaelCarbone’s question: “Why doesn’t every school district now just follow your lead and start making money and become a bank?”
Answer: “I don’t think every school district has a Superintendent willing… pic.twitter.com/sbcXp2VyG0 — Arizona House Republicans (@AZHouseGOP) July 24, 2025
The Superintendent was later asked by Rep. Carbone, “Why doesn’t every school district now just follow your lead and start making money and become a bank?”
In a reponse that appeared to show defiance, he said, “I don’t think every school district has a superintendent willing to stand in front of you like this.”
As reported by State 48 News, Calles confirmed that he utilizes his district office to conduct personal business during working hours. The outlet noted that under questioning it was further revealed that two members of school district are also employed by the Superintendent through his consultancy.
4/ After repeated questioning from Rep. @MatthewGress, Superintendent Calles admitted he uses his Superintendent office to conduct work relating to his private consulting business. pic.twitter.com/rpfxBOZvvm — Arizona House Republicans (@AZHouseGOP) July 24, 2025
When pressed to answer questions from Tolleson City Manager Reyes Medrano Jr., along with Police Chief Rudy Mendoza and former Superintendent Kino Flores regarding his conduct, including an alleged request for Tolleson to pay Calles’ real estate broker an $85,000 fee related to the district’s purchase of city land, Medrano suggested this violated state procurement laws.
“The 85 was going to be on top of the purchase price, and then we were supposed to pay the broker with it,” he told the committee. According to Medrano, Calles told him “it would be cleaner” to do so.
14/ TUHSD Superintendent Calles asked the Tolleson City Manager to accept an additional $85,000 for a land purchase so that these funds could be used to pay a specific broker that TUHSD had not hired in the transaction. “It would be cleaner for me.”
The city refused. 👇 pic.twitter.com/6FdOBi9KL6 — Arizona House Republicans (@AZHouseGOP) July 24, 2025
Calles lashed out in response, claiming the allegation “borderlines defamation.” He said in full: “I believe that borderlines defamation, the way he made that implication as if something nefarious was happening.”
Speaking with a reporter, Calles rejected the allegations saying that “they’re all lies. Do you see our improvement on the letter grade system? You see that our schools are moving up on their performance?”
The Superintendent told 12News that he expected the committee to request review of his conduct by the Arizona Auditor General and said, “When the Auditor General’s Office finally sends me someone, I’ll give them the full story.”
In a statement following the hearing, Gress said, “The hearing today revealed deeply troubling information that shows a pattern of disregard for public transparency. Combining public service with private consulting work, including using Tolleson District facilities and employees to support superintendent Calles’s consulting company reeks of corruption. Chairman Finchem and I will be reviewing our options with the auditor general.”
Source: https://www.fox10phoenix.com/news/lawmakers-call-audit-tolleson-union-high-school-districts-finances