By Mark Gutglueck
The City of San Bernardino this week moved to hire Greg Devereaux, who recently departed as San Bernardino County’s chief executive officer, as a management consultant.
Devereaux’s hiring comes amid stepped-up concern over a revolving door ethos throughout San Bernardino County’s governance circles. San Bernardino’s selection of him is further complicated by several layers of conflict Devereaux finds himself in, the sheer demand on his time, together with questions relating to whether San Bernardino’s hiring of him was a bald ploy to purchase influence at the management level of the county, as Devereaux remains in place there as a consultant to the county administration.
Devereaux first became involved in local government in 1991, when he was hired to serve as Fontana’s redevelopment and housing manager. With aplomb, Devereaux mapped out a strategy to pull Fontana out of the financial abyss that Fontana had slid into under the direction of Fontana’s city manager from 1973 to 1987, Jack Ratelle. Fontana’s financial situation overwhelmed each of the three city managers succeeding Ratelle – John O’Sullivan, Russ Carlsen and Jay Corey. When Corey departed in 1993, the city council elevated Devereaux to city manager. In four years he not only succeeded in lifting Fontana out of its intractable economic circumstance, but succeeded in putting that city on firm financial footing that would persist for two decades – to the present. Having witnessed the dramatic turnaround in Fontana, the Ontario City Council set about luring Devereaux to Ontario, succeeding in doing so in 1997. For the next dozen years he ran that city, likewise transforming it through a variety of strategies which had for the most part not been previously utilized. By 2009, a dozen years after Devereaux had taken the helm in Ontario, the city had a total budget approaching $670 million dollars, meaning the city had more than two-thirds of a billion dollars running through all of its funds annually, such that its financial numbers were more than double that of the next most financially dynamic city in San Bernardino County.
In November 2009, the county terminated Mark Uffer as the county’s top administrator, a position then known as the county administrative officer. A recruitment drive throughout California to replace Uffer attracted 277 applicants. Sixteen of those applicants were given a second look, but inevitably, largely on the strength of his relationship with county supervisor Gary Ovitt, who was then chairman of the board of supervisors and had been mayor in Ontario during part of the time Devereaux was city manager there, Devereaux was selected. So impressed were county officials that Devereaux was able to essentially write his own ticket. In an intense negotiation session that involved Devereaux insisting upon being given the title of chief executive officer as opposed to county administrative office, a degree of autonomy with regard to overseeing, hiring and firing county department heads that went beyond the authority of any previous county administrative officer, a salary and benefit package unparalleled in county history and a so-called superbonus, Devereaux consented to leave Ontario and become the county’s top staff member. The superbonus consisted of a provision written into his employment contract that he could not be removed as chief executive officer on anything less than four votes of the board of supervisors. Thus, the bare 3-2 majority vote that had knelled Uffer’s exodus would be insufficient to terminate Devereaux. His firing could only come if a cause was cited and a substantial number or percentage – 4 out of 5, or 80 percent of the board – agreed to force him out. He was given a ten year-contract that guaranteed he would remain as chief executive officer for five years and provided him with the option of remaining thereafter – with the board’s consent – as chief executive officer or instead transitioning into the position as “special projects” advisor. He was to be paid $319,909 in base salary as chief executive officer together with benefits that would make his total annual compensation eclipse $400,000. As special projects advisor he was to receive $91,000 per year.
His understanding of how to keep all of the moving parts of a large organization in synchronization with one another was unrivaled regionally. While delegating responsibility to department heads, he would intermittently and in some cases even constantly carry out operational control surveys that impressed upon the county’s workers that they were not only answerable, but in some fashion absolutely answerable, to him.
A significant element of Devereaux’s strength was his mastery of the financial bottom line and his ability to force the county’s department heads to constrain themselves to the budget imposed on them.
Moreover, Devereaux’s tenure as county chief executive officer began more than two years after the county, region, state and nation had been hit with an economic downturn that persisted for more than five years. With the accompanying drawdown in revenue available to the county forcing successive rounds of belt tightening, Devereaux had to seek and extract the reluctant concessions of the unions representing county employees to allow the freezing of salaries and reduction of benefits. He was able to carry this off in the face of a degree of enmity with elements of the county’s workforce and the unions representing them, in large measure through the assertion of control, indeed supercontrol. In this way, Devereaux’s absolute authority was a necessary ingredient in his success, along with calculation and precision and what were sometimes perceived as ruthless tactics, as the margin for error and the window for achievement in the arenas in which he functioned were decidedly narrow. His political masters on the board of supervisors – who changed in 2010, changed some more in 2012 and changed in 2014 – were willing to tolerate his dictatorial manner and live with his style of having primacy in dealing with county staff and department heads, in large though not total measure cutting the board off from direct interaction with those department heads and staff.
While it seemed that Devereaux would very likely serve out a full ten years as county chief executive officer, somewhat abruptly on January 19 he announced he would step down as county administrative officer in April and move into the special projects manager position laid out in his contract. In the same time frame, he formed a company, Worthington Partners, a management consulting firm. Assistant county administrative officer Dena Smith was moved into the post of interim county administrative officer to replace him.
In July, the Ontario International Airport Authority, a board set up by the City of Ontario in 2012 in consultation with Devereaux and the county to oversee the operation of Ontario Airport following its return to local control from that exercised by the City of Los Angeles which had run it since 1967 and owned it since 1985, hired Devereaux and his successor as Ontario city manager, Chris Hughes, as consultants, agreeing to pay each of them $20,000 per month for a guaranteed 36 months, for a total of $720,000 or $240,000 per year, each.
Those consulting contracts were not entered into directly with Devereaux and Hughes, but rather their respective companies, Worthington Partners, LLC and Woodlawn Consulting, LLC.
Ontario Airport has only recently returned to local control, after nearly a half century of being under the professional management of the City of Los Angeles, the Los Angeles Department of Airports, and the corporate entity Los Angeles uses to operate its aviation facilities, Los Angeles World Airports. It was suggested, though not clearly stated, that the hirings of Devereaux and Hughes were intended to facilitate the sell-off of what some Ontario officials consider to be surplus property at and around the airport so that it can be developed. Temporally proximate to the consulting contracts being entered into with Worthington and Woodlawn was the forced departure of Kelly Fredericks, the career airport management professional who had been hired as the Ontario International Airport Authority’s executive director. Fredericks differed with his political masters, believing it to be a mistake for the authority to divest itself of the property surrounding the airport and then see it developed because doing so will inhibit future expansion of the facility. The incestuous nature of the Devereaux and Hughes hirings was at once a major topic of discussion among many inside and outside of politics in San Bernardino County.
Also recently there has been growing public criticism of the tendency of elected officials to promote into discretionary governmental staff positions their colleagues, either other elected officials, former elected officials or retired staff members with whom they have had extended previous relationships. In this way, Fourth District San Bernardino County Supervisor Curt Hagman’s hiring of Ontario Councilman Alan Wapner as his district office’s policy advisor has come under fire. Wapner, a former Ontario policeman, has been on the Ontario City Council since 1994. He is the president of the board of the Ontario International Airport Authority. Hagman is a member of the Ontario International Airport Authority board. This underlap and overlap is improper and fraught with conflicts, critics have charged. Hagman also formerly employed then-Chino Hills mayor and councilman Ed Graham as one of his office’s field representatives. He now employs Chino Hills Councilman Peter Rogers as his district director. Hagman served in the California Assembly but previously was a member of the city council and mayor in Chino Hills when Graham was also on that panel. The board of supervisors was recently upbraided by a number of county residents over the board’s decision to confer the position of High Desert Corridor coordinator on former Victorville City Councilman Ryan McEachron. McEachron was voted out of office last November after serving two terms. He is a close political associate of Supervisor Robert Lovingood, the current chairman of the board of supervisors, and is rumored to be Lovingood’s choice to succeed him as supervisor. While he was on the Victorville City Council, McEachron was a member of SANBAG, the county’s transportation agency. For the last two years he was in elective office, McEachron was the president of SANBAG and in that position championed the building of toll roads on the I-15 and I-10 freeways, a move unpopular with a majority of residents but which was endorsed by a majority of elected officials and government employees engaged on transportation issues. Critics consider McEachron’s hiring, which was done without a formal application and bidding process, to have been an example of cronyism and favoritism aimed at benefiting the political establishment.
Based upon San Bernardino City Manager Andrea Travis-Miller’s recommendation, the city council Wednesday night unanimously approved entering into a $10,000 per month, $120,000 per year contract with Worthington Partners “for consulting services related to strategic planning and organizational development.” The term of the contract is to run for three years.
Travis-Miller said Devereaux would engage in “mentoring employees and council members” by participating in “strategy development discussions… and developing operational goals and objectives and helping us to arrive at performance metrics for departments” during the city’s budget process.
She said it is calculated that Devereaux will make “hourly $100 to $120 for about 20 to 25 hours of work per week.”
Given Devereaux’s other current commitments, Travis-Miller’s expectation that Devereaux will be available to devote that amount of time to San Bernardino is subject to doubt.
One of Devereaux’s known commitments is his continuing capacity with the county. Officially, he is functioning as a special projects advisor. One of those roles is his mentoring of his temporary replacement, Dena Smith, who previously served as the clerk to the board of the supervisors and the head of county land use services before promoting into the role of assistant county CEO. In June, Devereaux’s role as the county’s chief executive officer emeritus/de facto became apparent when Smith was unable to provide the board of supervisors with a comprehensive overview of the 2017-18 budget buttressed by the specifics they were requesting. Because most of the activity taking place on the fifth floor of the county administrative building where the supervisors and the county administrative officer/chief executive officer have their offices occurs behind closed doors, the precise degree to which Devereaux is guiding Smith is not publicly known. It is believed, however, that with regard to certain issues, Devereaux’s input is considered crucial. Given the sheer size and complexity of the county, it is further anticipated that when a new top county administrator is chosen, whether he or she bears the title county administrative officer or chief executive officer, Devereaux will be called upon to engage in much of the same mentoring he is now believed to be engaged in with Smith, who has reportedly withdrawn her earlier application for the full-fledged top administrative position.
Devereaux is also committed to his consultancy with the Ontario International Airport Authority, a position which is paying him twice what the City of San Bernardino is paying him. If the rate of pay corresponds to the number of hours worked, which is not necessarily a given, Devereaux would be called upon to put devote to Ontario Airport double the 20 to 25 hours per week Travis-Miller indicated he would be working on issues impacting San Bernardino. The number of work or consultancy commitments Devereaux has beyond those to the county, the airport authority and San Bernardino is unknown; it is assumed he has at least a handful of others.
There are also some known conflicts between Devereaux’s assignment with San Bernardino and with both the county and the airport authority.
The county and the City of San Bernardino are currently hashing out the portion and proportion of property tax each should receive with regard to properties within the city limits or its sphere of influence which formerly were deemed city territory. Some of those properties have been reclaimed by the county and the apportioning of tax revenue to either side is yet up in the air. Devereaux was previously, and appears to be currently, involved in those discussions representing the county. In this way, the city’s hiring of him as a consultant is seen by some as an untoward move by the city to purchase influence with Devereaux. At the same time, the degree of trust the city is putting in him and its assumed reliance upon his representations could redound to the city’s detriment if Devereaux takes more seriously his assignment to safeguard the county’s means of revenue.
The $240,000 per year contract Worthington Partners has with the Ontario International Airport Authority commits Devereaux to militating on behalf of the growth and prosperity of Ontario Airport. Ontario officials perceive San Bernardino International Airport to be in competition with Ontario Airport. San Bernardino officials consider San Bernardino International Airport to be a valuable asset in achieving its own prosperity and attracting development and investment. There appears to be little prospect of resolving this clash of interests and, most likely, given the intensity of Ontario’s commitment to the expansion of its airport, Devereaux appears most likely to side with Ontario in this confrontation of will and interest.
San Bernardino Councilman Henry Nickel, while acknowledging there is some citizen concern about the revolving door nature of hiring establishment figures including elected officials into government positions and a perception of cronyism among politicians and government staff members, nevertheless defended the hiring of Devereaux as a consultant by the city, largely on the basis of Devereaux’s talent.
“Mr. Devereuax is a person who has a tremendous amount of experience, and it has been demonstrated by his work with several cities that were facing economic challenges which he turned around,” Nickel said. “San Bernardino is in need of that very thing. For generations we were the most prosperous city in the county. Now we are the laughingstock. We are a cesspool of poverty and that is because government has not been effective and has been unable to do its job. Mr. Devereaux has the skill and the professional capability to turn that around. He has been put in charge of several governmental entities that were in tremendous difficulty and transformed them into success stories. We have a tremendous cash flow problem. Our tax base has eroded. He has experience and insight into the nuances of enhancing revenues through all sorts of creative sources in jurisdictions like ours, and he can help us rebuild. He was brought in by the county to address similar concerns.”
Nickel said, “There is nothing untoward in hiring Mr. Devereaux in a consulting capacity. If and when there is a potential conflict, we have a mechanism to address it so we do not have to confront that perception. If and when a conflict is identified, we will address it as is appropriate. Mr. Devereaux brings a tremendous amount of insight. Given his history and track record, we would not be doing our job if we did not consider bringing him on board. Simply because he may have some clients who have different interests does not disqualify him. Such differences are in the nature of being a professional, be it an accountant, or attorney or a consultant.”
Nickel spoke to the lack of performance criteria in Devereaux’s contract and its three-year duration.
“We are looking to see results in terms of his ability to provide a service of value within the first few months of his contract,” Nickel said. “Even though we have recently adopted a new charter there is still a very unwieldy management structure in the city. We yet have cultural issues to deal with. We are bringing him on board not just to manage effectively but so we can see what can be done in terms of the law and financial mechanisms for the city. I see him as a turnaround expert to come in and take the reins of the city. Our city manager is carrying out a recruitment of new staff and we are in the midst of a massive restructuring to get our city back on its feet. He is to advise the council and be part of the strategic planning for our city to map out how we move forward and address the overwhelming problems we still face, even after the ending of our bankruptcy. If Greg does not work out, the council will terminate his contract. But [city manager] Andrea [Travis-Miller] on her own would not be able to handle something this large. Sometime within the next year or two we will make a determination if his services are still needed. If he does all we want him to do, then his contract with us will self-terminate. In the meantime, we do need someone of his caliber to help guide both the council and the professional management staff of the city. He is there to get the structure in place so we can work using the management tools available and work within California law. He is well regarded not only because of his expertise, but having him in place sends a message to the business community and potential investors that our community is changing its ways and its culture.”
Nickel acknowledged that Travis-Miller’s hope that Devereaux would be able to devote 20 to 25 hours of attention to the city was probably overly optimistic. He said the city would be benefited by the degree of intensity and professionalism Devereaux will bring to the assignment, regardless of how much actual time he devotes to San Bernardino.
Nickel addressed the conflict of interest issues that pertain to the city’s hiring of Devereaux.
“You can’t rule out the existence of all conflicts of interest when you are dealing with individuals engaged in differing activities and actions of government, but you can have rules in place to deal with them when those conflicts arise,” Nickel said. “There are bound to be such issues because Greg does have a depth and breadth of experience in this region. If there is a conflict, we need to have clear standards in place to address those conflicts. An obligation to one’s client runs across the spectrum of all professions and responsibilities. It is not just the government. It is the same in corporate environments, and nonprofit environments. There are potential issues where a conflict may be perceived. Where and when that perception arises we should provide a mechanism to keep that person from making that decision.”
Nickel continued, “Greg Devereaux has served as a public professional most of his life, so the issue of Greg Devereaux coming to work for us is really one of qualification. We need someone of his caliber at this particular time. He is the right person for this position at this time.”
With regard to Devereaux’s commitment to Ontario and Ontario International Airport and the degree to which that compromises his ability to work forthrightly in promoting San Bernardino International Airport, Nickel said, “I don’t think there is direct competition between the airports. The airport [San Bernardino International] is run by a joint powers authority [the San Bernardino International Airport Authority], which is a separate legal entity, which is not part of our city, although the city is a participant in the joint powers authority. If there is a potential conflict there and there is some advice he is giving the city that is contrary to the city’s interest, that is something that warrants scrutiny and discussion.”
As pertains to any disputes or negotiations between the City of San Bernardino and the County of San Bernardino with regard to property tax issues pertaining to property either currently or once within the city and the continuation or discontinuation of that property on municipal tax rolls or whether that money is to accrue to the county, Nickel sought to address the perception that the city was seeking to purchase influence with the county by hiring Devereaux, who remains in a very powerful and persuasive position there.
“I don’t think it is bribery,” Nickel said. “This is not to checkmate the county. We merely want to hire someone with the skill, experience and expertise to help us with our recovery.”
Nickel was rather dismissive of suggestions that Devereaux’s hiring reflected a degree of cronyism or institutional favoritism within government circles toward government employees, or a revolving door ethos wherein elected officials or government functionaries are provided with sinecures after they leave office or retire from a long held government position. He was asked about the circumstances involving McEachron, Wapner, Graham and Rogers.
“I can’t speak to that,” Nickel said. “I was not involved. I haven’t seen any indication that what they did was illegal.”
Nickel defended his own vote to approve Devereaux’s hiring. Nickel is currently a county employee. Last October, when he was hired by the county into his position as a workforce analyst, Devereaux was the county’s chief executive officer, by one interpretation, Nickel’s ultimate boss. This week, as a member of the city council deciding on whether to approve the consulting contract with Devereaux, Nickel was, by one interpretation, Devereaux’s boss. He rejected the suggestion that there was a parallel there, any quid pro quo or hint of a conflict of interest.
“He didn’t hire me,” Nickel said. “I work for the work force development team and he doesn’t get involved in the workforce development department. I have never interacted with him directly in my capacity as a county employee. I am at a low level, way below Greg’s level. Technically, he was my boss but I never had any contact with him.”
Nickel added, “On the night we hired him, he was no longer an employee of the county as the CEO, a position he hasn’t held for quite a few months now. He is simply a consultant with the county at this point. So there was no conflict of interest there in terms of me hiring my boss. He has no authority over me whatsoever at this point in terms of my capacity as a public employee. If he were still the county CEO, he would not be working as an outside consultant, but if he was, I would have recused myself on this vote, absolutely, but since he is not now my boss, I was permitted to participate in that vote.”
Nickel pointed out that prior to his hiring by the county, he had “locked horns” with Devereaux over the county’s annexation of the San Bernardino municipal fire department into a county fire service zone, which Nickel opposed and which Devereaux was facilitating. “Given my background and opposition to the annexation and our background together in my capacity as an elected official opposing his agency’s takeover of one of the city’s public safety divisions, he and the county might have had an incentive to see that I wasn’t hired,” Nickel said.
Nickel was likewise dismissive of suggestions that governance is plagued by a surfeit of public employees serving as elected officials. Though he acknowledged that there were some who believe allowing those employed by government to hold elective office overseeing the government gives such people an unfair second bite at the apple and creates an incestuous circumstance that disenfranchises citizens who are not government employees, Nickel said he rejected that as a philosophy.
“I think the nature of good local government is to have elected leaders who represent a mixture of those from the private and public sectors,” Nickel said. “One advantage a public employee offers is an understanding of how government works. I am not interested in excluding any group as a whole from holding office. I believe there should be, and there is, disclosure of how you are employed when you run for office, but there should be an opportunity for a clear choice and I would not go so far as to singling out public employees and saying they should be barred from elected service. I have worked in government almost entirely since I left college. I came into office after I was a government employee. I am not in favor of excluding public employees from serving in elected office. I ran for office against business people and other people, and I was selected by the voters to represent them. It is up to the voters. Do I think good qualified people should be precluded from government service? Absolutely not. We have room to have good people serve in whatever capacity their skill and talents offer.”