Relations between the Anaheim City Council and City Manager Thomas Wood had been cooling for some time before Wood was asked to resign last week, according to sources close to City Hall.

Two key issues that insiders say caused tension were the way city contracts have been handled and the fact that Wood does not live within city limits. Meanwhile, Anaheim’s business leaders expressed a mix of shock and confusion in the wake of Wood’s resignation.

Wood was the third high-ranking city official to resign since Voice of OC investigations revealed potential conflict of interest issues regarding the city’s building division. Private firms connected to staffers who worked in the division had received tens of thousands of dollars in outsourced plan review work.

Prior to Wood, both Scott Fazekas, who was head of the building division, and Assistant Building Official Richard Brooks had resigned. The building division’s conflict of interest issues “might have been the last straw,” according to a source close to City Hall.

Tensions on this issue reached public tipping point in October when Wood disagreed with Mayor Tom Tait during a City Council meeting in which council members voted to slash Wood’s contracting authority from $250,000 to $100,000.

Wood claimed that contracts not approved at council meetings were just as transparent as those that are. Tait took umbrage with that claim.

“Mr. City Manager, you wrote that it’s the same review requirements as if it’s on the agenda — except it’s not on the agenda,” Tait said.

Apart from the contracting issue, members of the community have long complained that Wood was violating the city charter by not residing in Anaheim. Wood’s contract specifically exempts the residency requirement until the council requests that he live in the city. It is unclear whether the council made that request.

A news release announcing Wood’s resignation said the council had a desire to move in a “different direction regarding management of the city.”

Councilman Harry Sidhu refuted assertions that relations between council and Wood had become icy. However, he couldn’t provide details on the council’s new direction.

“We have not formulated what the new direction will be,” Sidhu said.

City Hall watchers say axing a city manager held in such high regard by the business community shows a clear departure in the way affairs are being conducted in the city. The perception is that during Mayor Curt Pringle’s tenure, which ended last year, the business community’s clout — including influences from outside the city — would have carried the day.

One source said that leaving the business community out of the loop made the decision “all the more impressive” because it demonstrated the council’s independence from Pringle and the business community.

Business leaders say they have a deep reverence for Wood because he was a key broker in the successful 1990s effort to expand the city’s resort district, the revenue-producing region that includes Disneyland, the Anaheim Convention Center and an assortment of hotels.

“If not for Tom Wood, that [resort district] would not exist today. That one thing is the engine that makes the rest of the city go,” said Bill Taormina, head of Taormina Industries.

“When all of a sudden, with a guy like that you wake up and see a resignation letter, I just got confused,” he said. “I’m experiencing these emotions that I can’t really grasp.”

Todd Ament, president of the Anaheim Chamber of Commerce, said that Wood wouldn’t have tolerated staffers working for firms that received outsourced work from the city. Ament praised Wood’s savvy deal-making skills.

“For Tom knowing that was happening in his department, there’s nobody who would have been more upset than him,” Ament said. “He’s a good man. He’s got a good heart. He did a lot of good for the city.”

Taormina dismissed Wood’s conflict of interest issues in the building division and his residency as being “irrelevant” to Wood’s performance as city manager.

“Living here and the building department things has nothing to do with his competency or his performance. That simple,” Taormina said.

Mayor Tom Tait declined to comment on the council’s relationship with Wood, as did Councilwoman Kris Murray, who sources say was the only member of the council to oppose the resignation request.

Murray subsequently was the only council member to vote against appointing Finance Director Bob Wingenroth as interim city manager.

Murray, a member of the Save Our Anaheim Resort committee, is seen as closest to the business community and former Mayor Curt Pringle. Her opposition would have reflected their feelings on the issue, a source said.

“One reason I was surprised is because I didn’t think they [the council] were engaged enough to handle the city manager,” one source said.

Council members Lorri Galloway and Gail Eastman did not return phone calls seeking comment.

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