Few City Managers Can Spend as Freely as Westminster’s

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When Westminster officials hired a part-time consultant last month to fill in some of the duties of their recently fired finance director, the consultant turned out for his first City Council meeting.

However, the contract paying him never came before council members.

That’s because City Manager Eddie Manfro was able to hire the consultant, Irwin Bornstein, under his own purchasing authority, which is among the most expansive in Southern California.

In the interest of efficiency, all city managers are given the authority to sign contracts without council approval up to a certain limit. But Manfro’s limit is $175,000, which is higher than cities four times Westminster’s size.

For example, top administrators in Irvine, Long Beach, Los Angeles and Sacramento all have a $100,000 purchasing limit, while Fresno and Riverside set theirs at $50,000, according to research done by the city of Anaheim in 2011.

The Anaheim City Council ultimately voted that year to decrease its city manager’s purchasing authority from $250,000 to $100,000.

Anaheim Mayor Tom Tait proposed the reduction after realizing that only San Diego, among cities surveyed, had such a high cap.

“There’s a lot of business that needs to get done in a city that you don’t have time to go and wait for a council meeting, put it on the agenda, so that’s the reason for giving the city manager flexibility,” Tait said. “But at least in Anaheim, I thought $250,000 was extremely excessive.”

A manager’s purchasing authority is also a key threshold for transparency in city government, because it determines what kind of contracts show up on city council agendas for approval.

“Giving the city manager authority is not in of itself a problem, but it should be clearly transparent what decisions are made and what contracts are done without city council approval,” Tait said. “Of course, if it’s not watched, there’s a danger that it could be abused.”

In Anaheim, new contracts are all posted online. In Santa Ana, where the city manager’s signing authority is limited to $25,000, the city manager provides council members with a quarterly report of contracts he has approved.

Manfro notes that any spending approved by staff and the city manager have to fit within the city council adopted budget, and everything they spend is ultimately brought to the council in the monthly warrant register.

There’s no limit to the number of hours Bornstein can work and his contract doesn’t include a cap on how much he can be paid overall.

He points out that while Bornstein’s contract could technically go up to $175,000 before the city council sees it, it’s unlikely the contract will reach that limit.

According to Manfro, the city is using money appropriated for their former finance director’s salary to pay for Bornstein’s part-time work.

Although the contract doesn’t set an explicit cap, they expect him to work about 20 hours a week for five months. At a rate of $90 an hour, the contract will probably cost around $39,600, Manfro wrote in an email.

In addition to reviewing the city’s finances, Bornstein will also be key to devising a new strategy for Westminster’s ailing budget.

The city is projecting a $5.39 million deficit next year, a number that is only expected to rise in coming years. While Westminster has relied heavily on reserve funds to bridge that gap each year, that fund will be depleted by 2018.

City officials are expected to hold study sessions starting in September to devise a new strategy for eliminating the deficit.

Contact Thy Vo at tvo@voiceofoc.org or follow her on Twitter @thyanhvo.

  • Roger Butow

    Thanks VofOC……Personally, I’d never heard of discretionary funding above $50,000, and that only this past 18 months. Previous limit that I knew of was $25,000/ticket.
    When I first became aware of this dynamic circa 2000, ALL were in the $10,000 max. range.

    This makes Westminster look/sound like Vernon or some urbanized, free wheeling nightmare. This is per incident/vendor/person, so things could add up to glaring deficits quickly if multiple consultants were hired sub rosa.
    Water/sanitation districts & JPAs have similar dynamics.

    This upper limit would basically allow budgeting for 3/4 to full-time employees without elected official oversight or restraints—or even knowledge. Most are NOT paid full time themselves, have outside careers, so with limited personal time pouring over complex budgets seeking these expenditures is dicey.

    I guess the managers do need SOME discretionary funding or else they’d be taking everything constantly to their council or board, so a $25,000 range these days doesn’t seem abusive—–only saving grace is no workman’s comp, health care or benefit packages, correct? 1099?

    Be interesting to see/hear watchdog Council woman Diana Carey’s reaction. She seems to be the only council person awake in Westminster.

  • Smeagel4T

    “Although the contract doesn’t set an explicit cap, … the contract will probably cost around $39,600.” — Private business is forever engaging in the same contracts, with the same expectation claims, and the same resulting budget overruns later because the claims were false. The only difference between public government and private business is the inevitable overruns that occur all the time in private business never make the media. If they did, the media would have no time to report on anything else. Especially the Kardashians. Without some kind of incentive in place to underrun the budget, history sets the odds of this ending up overrunning very high just like it would if it was a private business.

    • David Zenger

      “The only difference between public government and private business is
      the inevitable overruns that occur all the time in private business
      never make the media.”

      Not quite. The only difference is that public contract overruns are paid for by the public, not the shareholders.