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.