Boardmembers of the county’s mosquito district voted Wednesday not to renew a contract with longtime manager Robert Gay who came under fire for his hiring practices after two finance workers — one with an existing criminal record for stealing from employers — stole at least a half-million dollars.

The 21-member board of the San Mateo County Mosquito and Vector Control District split 11-8 in favor of not extending Gay’s contract. One member abstained and another was absent. The vote was taken in the board’s July 9 closed session meeting to evaluate his performance and reported out without a breakdown of who voted on what side. However, boardmember Joe Galligan, who represents Burlingame, said all five members of the finance committee including himself voted not to extend the contract.

Gay was judged only on his past year’s performance, Galligan said.

Gay joined the district Feb. 2, 1997. His contract ends Aug. 31.

Although the board voted not to keep him, Gay said he was actually planning to speak with members about retiring Sept. 1 so he can devote more time to his elderly mother.

“It’s a tough decision to retire. I love what I do and I love the district,” he said.

The board’s vote “worked out perfectly” with his personal plans, he said.

As for the split vote, Gay said his performance evaluation was “very positive” with better marks than the previous year but “you never know what was discussed in closed session.”

Betsey Schneider, the San Carlos board representative who sparked the investigation that turned up the embezzlement, said she voted against a new contract because Gay had not shown much growth since the scandal.

“I don’t believe that there was much improvement in his managerial skills relevant to supervision and guidance of staff under him which is what precipitated the embezzlement,” she said.

Although Gay’s last contract was renewed, the board also placed Gay on a performance improvement plan, or PIP, in February 2012.

The PIP dealt with Gay improving his financial skills, said Schneider who felt that was not relevant because the district has a new finance director.

“He needs to have more hands-on supervision of the staff. Had he given more oversight of who he hired before we wouldn’t have had the embezzlement,” she said

Gay hired finance director Jo Ann Dearman, also known as Joanne Seeney, in 2008 without performing a background or reference check. At the time, she was convicted of embezzlement in two different cases, including one in which she ran up more than a half-million dollars on her previous boss’ credit card.

Dearman, as she was then known, hired accounting supervisor Vika Sinipata. Together between 2009 and 2011, the women diverted the district’s taxpayer funds into their own pockets by giving themselves extra pay at a higher pay rate and fraudulent time off, excessively contributed to their deferred compensation funds, used credit cards for personal purchases and electronically transferred money into their own accounts. Dearman even charged defense attorneys fees for an earlier embezzlement case to the district and at one point took medical leave, claiming she needed to care for her mother but in actuality served two years and eight months in prison for the two different embezzlement cases.

Schneider’s questioning of a district fund turned up more than $635,000 missing although prosecutors could only prove a little more than $450,000. Dearman ultimately pleaded no contest to 10 felonies out of the 200 originally charged and received eight years prison. Sinipata received a four-year term.

The embezzlement case put the district and Gay in the hot seat, nearly leading to its dissolution and duty transfer back to San Mateo County. The Environmental Health Division of the county’s Health System did not want to absorb the vector and mosquito abatement responsibilities which played a role in the district remaining intact.

In July 2013, the San Mateo County Civil Grand Jury concluded that mismanagement, insufficient accountability and inadequate oversight were behind the crimes. The jury report also took aim at the district board, arguing the district’s insurance company denied its $790,000 loss claim because of its failure, and urged the county’s Local Agency Formation Commission to take a second look at dissolution. LAFCo passed, saying that the district needed monthly auditing but that dissolution would jeopardize public safety and unfairly punish the agency.

In recent years, several members of the district board have since been replaced by their appointing cities including former president Sam Lerner, of Atherton, who supported Gay in the face of calls for his resignation and the district’s dissolution.

Gay said he didn’t know if the turnover played any role in the board’s decision not to renew his contract but that many current members do not have the institutional history of the past.

James Counts, a former district operations manager who long criticized Gay’s performance, said he applauds the board members who voted against a new contract.

“I commend the new members on finally taking action and doing what they needed to do,” Counts said.

Galligan, one of the newest members, said the mosquito district is financially in a good place with a balanced 2014-2015 budget, $7 million in the bank and no debt.

The board will discuss recruitment of a new manager at its August meeting, Schneider said.

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