Anaheim Council Planning to Cut City Manager’s Contract Authority

This article has been updated.

Anaheim City Council members will significantly cut the size of contracts and change orders the city manager and public works director can approve without council consent.

Mayor Tom Tait and the council’s four-member majority Tuesday night characterized the plan to cut City Manager Paul Emery’s signing authority from $100,000 to $50,000 as a move that will increase accountability. But opponents of the plan on the council said it shows a lack of faith in Emery and will bog down city government.

No vote was taken during the regular meeting Tuesday because Councilman James Vanderbilt, who proposed the plan, needs to make changes to exempt certain types expenditures, such as maintenance costs and contracts for city council aides. But it was clear from comments made during the meeting that had there been a vote it would have been 4-3 in favor.

Speaking for the council majority, which also includes Councilman Jose Moreno and Councilwoman Denise Barnes, Tait said the plan creates more transparency at City Hall. The mayor pointed to a $71,000 consulting contract to conduct a survey about the proposed Anaheim Performing Arts Center, as a contract Emery approved but he was not aware of.

“I didn’t know anything about the study, and the public didn’t know much about it,” Tait said. “The more you put on the agenda before the public to vote on, the better.”

Meanwhile, Councilwoman Lucille Kring, who along with Councilwoman Kris Murray and Councilman Steve Faessel oppose the plan, called it overkill.

“Either we trust the city manager or we don’t trust the city manager,” Kring said. “If every contract above $50,000 has to come back to this board…we’re going to shut this city down.”

While council members were split on Emery’s signing authority, they voted unanimously to overhaul the authority of Public Works Director Rudy Emami to approve change orders, which are increases to a contract that occur after the original approval.

The argument for allowing executive level staff to sign off on contracts up to a certain amount without council approval is that it allows the city to respond quickly to situations without waiting for a council meeting and make purchases that keep the city running day-to-day.

But the flip side is that authority can be abused.

In 2011, council members voted to reduce then-City Manager Thomas Wood’s signing authority from $250,000 to the current level, $100,000, after questions about conflicts of interest involving contracts that did not go before the council for approval.

In Santa Ana, the second largest city in Orange County, the city manager can approve contracts and change orders up to $25,000, and must report those contracts to the city council on a quarterly basis. In Garden Grove, which has a population about half the size of Anaheim, the city manager can approve up to $50,000 in expenditures.

Emery noted that of all the contracts he individually approved in 2016, 31 would have fallen between $50,000 and $100,000.

Among the contracts he approved last year were two professional service contracts with Hill International, a firm which employs controversial former city council candidate Steve Chavez Lodge. Most of the other contracts were agreements with groups hosting events in the city for extra police work and to hire instructors for public classes funded by the city.

Addressing Tait’s claim regarding the Anaheim Performing Arts Center contract, Murray questioned whether one instance is worth “a wholesale change of public policy.”

Kring said the city is already transparent, pointing to the fact that it posts on its website a description of any professional services contracts above $100,000 approved by the city manager, although the public postings do not include the specific language in the contracts.

Moreno said the decision was not a judgment about Emery or other city staff.

“I don’t think this has anything to do with trust,” Moreno said. If a member of the public asked him about a specific report or contract, “I don’t want to say I didn’t know.”

The city manager proposal is the latest in a string of actions the new council majority has taken to undo policies favored by the previous majority, which lost its hold on power when Moreno narrowly defeated incumbent Councilman Jordan Brandman in the November election.

Late last month, Tait pushed through a compensation increase for his policy advisor, Mishal Montgomery, a response to a 2012 council vote that slashed Tait’s budget for Montgomery’s position.

In other recent meetings, the new majority canceled a controversial tax subsidy program for luxury hotel developers; ended a sponsorship contract with the Anaheim Chamber of Commerce; “killed” any remaining interest in the Anaheim Streetcar project; and fired the interim city attorney, whose son was Brandman’s campaign manager and policy aide.

Tuesday’s change to the public works director’s contract authority follows complaint by resident David Zenger that the city has not updated a decades-old policy that allows the director to sign off on change orders of $10,000 or 10 percent of the total contract value, whichever is greater.

Cities typically give their public works director more leeway to approve change orders because of the large capital improvement projects the department oversees.

Unexpected conditions in construction projects, for example, might require the city to approve more spending by their contractor to keep the project moving forward without costly delays.

However, Zenger, who once worked as an aide to county Supervisor Shawn Nelson, argued that with major projects like the expansion of the Anaheim Convention Center, change orders could be in the millions. One change order for the Convention Center expansion was nearly $6 million, according to city spokesman Mike Lyster.

The proposal approved by the council instead uses a tiered system that would allow the public works director to approve up to $250,000 in expenses, but require approval by the city manager or the city council for larger transactions.

“[This has] nothing to do with whether I think there’s anything nefarious,” Moreno said, who requested the item. “It just doesn’t make sense that one person could sign off on a million dollar change order.”

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

  • Philmore

    No matter WHAT the level of spending authority granted, the issue of ACCOUNTABILITY has not been addressed by mandating timely DISCLOSURE of the expenses, which needs to be done at least AS A STAFF REPPORT FOR AN AGENDIZED ITEM at some frequent interval (quarterly, monthly, per meeting) instead of requiring PIR requests from the public AFTER THE FACT. Disgraceful that a city spending significant agenda and meeting time on AWARDS AND PROCLAMATIONS lets the CM THUMB HIS NOSE at SPENDING ACCOUNTABILITY under the guise of “efficiency” when his OWN opportunity for transparency, “City Manager Comments” in the Meeting goes largely UNUSED, and during his tenure, each City Budget has buried HUNDREDS of items, totaling $ Millions in the “Line Item” version (see the City website) under category 4781 “Misc. Professional Services” TOTALLY WITHOUT REFERENCE OR EXPLANATION.
    There is also an increasing “efficiency” trend of Agenda items “pre-approving” lists of contractors for “no-bid” work in certain categories if they agree to certain rates, with NO MENTION of accountability. NO BID means NO COUNCIL APPROVAL means NO AGENDA ITEM FOR THE PUBLIC, right ?

  • Cynthia Ward

    Tom Wood justified his $250K signing authority claiming he had to approve enviro doc contracts for RDA projects. But when I put in CPRA for the list of what he spent in the one year he had that authority, I think only one (maybe two) of those expenses was in that line. Records show he spent ONE MILLION DOLLARS in one day, $250K at a time, for different components of the same project.

    The Change Order for the Convention Center was a STOP WORK order to Turner, despite Turner documenting that they wanted to keep working, even offering to carry the cost of the Convention Center on their own shoulders until they caught up, the City demanded they stop and then bill the City. This was then used to get an expedited trial in the CATER challenge to the bonds, and without the time to conduct Discovery for the fraud we also hoped to prove in the approval of the Con Center bonds, we lost on a technicality. The City Attorney then turned around and blamed CATER for the loss of millions in delay claims for the project, claims that as of my most recent request HAD NOT BEEN PAID despite Declarations under penalty of perjury that they HAD been covered, and ALL OF IT without City Council knowing this was taking place! How much power does the UNELECTED staff have over there?! When they can use change orders to cover their own failure to manage the project, the taxpayers lose and nobody on staff is held accountable. This needed to stop and I am glad THIS Council majority takes their job seriously, instead of just checking out and saying over and over again like a recording, that they “trust staff” while blowing gratuitous smoke up their kilts at every opportunity to get them buttered up to do their bidding, Anaheim has some of the HARDEST WORKING professional staff in the nation, but the department heads are often chosen more for their political hiney-kissing ability and willingness to never tell officials their idea sucks and will hurt the City. So the hard working staff have to watch people who have risen beyond their abilities screw things up and then use our tax money to cover the screw ups. It is time to watch out for the taxpayers and the staff who deserve better leadership so they can be proud of their projects. Thank you Anaheim City Council (minus 3) for last night’s votes for accountability.

  • David Zenger

    “Either we trust the city manager or we don’t trust the city manager,” Kring said.

    Exactly right.