By Mark Gutglueck
The City of San Bernardino has withheld payment of former City Manager Andrea Travis Miller’s severance payment for more than two months following her forced departure.
While members of the mayor’s political team are casting about for some basis upon which to forego making that payment, the terms of Travis-Miller’s contract stipulated that a departure disbursement equal to one year’s salary be conferred upon her in the case of early termination of her contract. If the theory under which the city is withholding the payment does not hold up, the city will very likely be forced to pay her not only the severance itself, but her legal costs, including the amounts billed by her attorney in her effort to be made whole.
After the city council, which at that time was down to six-sevenths strength, in a closed-session discussion on April 4 divided 3-to-3 in a vote to place Travis-Miller on leave, Mayor John Valdivia, whose authority does not include a vote on most matters but allows him to break a tie and veto both 4-to-3 and 3-to-2 votes, broke that deadlock, resulting in Travis-Miller’s paid suspension. Valdivia had been on the outs with Travis-Miller since the 2018 election season during which he had successfully vied against and unseated former Mayor Carey Davis. It is Valdivia’s belief that Travis-Miller militated against him behind the scenes during that race.
In May, a special election was held to fill the gap on the council that had been created when Valdivia was obliged in December to resign his position as Third Ward councilman to move into the mayor’s post. Handily elected was Juan Figueroa, who was backed by Valdivia’s political machine, which provided him with $60,000 in money that either originated with Valdivia’s campaign fund or came to him through donors who are also Valdivia’s political backers. On May 29, the day Figueroa was sworn into office, the council almost immediately adjourned into a closed session, one conducted outside the spection and earshot of the public. At that point, Valdivia had undisputed control over the council, and the council voted 5-to-2, with council members Sandra Ibarra, Ted Sanchez, Henry Nickel, Bessine Richard and Figueroa prevailing, augmented by a similar vote by Mayor Valdivia exercising his authority to vote on issues relating to staff personnel, to fire Travis-Miller.
For nearly two months prior to that decisive 6-to-2 vote, there was reflection and expression of concern about jettisoning Travis-Miller and the expense this would entail, consisting primarily of paying her a severance that could better be used to pay the first year’s salary and benefits of her successor. Hence, there had been considerable speculation about the council citing cause in forcing Travis-Miller to depart, as this would absolve the city of the requirement to pay her the severance her contract specified, consisting of one-year’s salary and benefits. A laundry list of grounds for her firing made the rounds.
While the unofficial reason bruited about the community for public consumption intended as an ostensible explanation of the council’s action was that the budget Travis-Miller had recommended to the council before the onset of fiscal year 2018-19 and which was approved missed its revenue generation mark by $7 million, in entering the vote to terminate her the council elected not to cite cause and just bite the bullet and pay her the $262,542.50 severance.
It was anticipated that within a fortnight the city would cut Travis-Miller a check for the full amount or begin paying her in 26 bi-weekly pro-rated installments of $10,097.78 over a one year period. That did not occur. On July 16, Miller filed a claim against the city citing breach of contract and alleging she was being retaliated and discriminated against and had been harassed.
The filing of such a claim is considered the precursor of a lawsuit. In order to sue a public entity, a claim must be filed. The public entity has the option of seeking to satisfy the claimant for whatever loss or damage is specified or rejecting the claim. Upon the rejection of the claim, the claimant has one year to file suit in state court or two years to file suit in federal court.
At its July 17 council meeting the council had a closed door conference with its legal counsel relating to two cases of significant exposure to litigation. Because the discussion was not held publicly, it is not known whether Travis-Miller’s claim or its substance was considered. At its August 7 council meeting, the council had a closed door conference with its legal counsel relating to a case of significant exposure to litigation. Because the discussion was not held publicly, it is not known whether Travis-Miller’s claim or its substance was considered.
That the council failed to cite cause in terminating her on May 29 complicates things for the city in terms of Travis-Miller’s allegation of breach of contract. Citing such cause is a requisite of foregoing making the severance payment specified in her contract. The Sentinel has learned that the city is preparing to fend off Travis-Miller’s claim by a belated citation of cause, one which was under discussion during the April 4 to May 29 period in which Travis-Miller hung in the limbo of administrative leave prior to her firing.
Mayor John Valdivia, his advisors, his council allies and Assistant City Attorney Sonia Carvalho believe they can exploit the events that followed from the city council’s granting of her request, some two months after her August 2017 hiring as city manager, to hire Greg Devereaux as a management consultant at $10,000 per month through a $120,000 per-year three-year contract with his firm, Worthington Partners. Devereaux had been retained “for consulting services related to strategic planning and organizational development” and to 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.
Devereaux was simultaneously working as a consultant to a number of other public agencies, including the County of San Bernardino, the Ontario International Airport Authority and the East Valley Water District.
In April 2016, the City of San Bernardino, based upon direction provided to the city attorney the previous month, filed a lawsuit against the East Valley Water District and the San Bernardino Valley Municipal Water District. That suit was filed prior to Miller being hired as assistant city manager, a position she held when she was elevated to city manager in August 2017, or Devereaux taking on his consulting contract with San Bernardino.
The city’s lawsuit against the East Valley Water District related to East Valley’s Sterling Water Recycling Plant project to be built near Indian Springs High School, which the city claimed was beset with major questions and problems. That project was projected upon completion to discharge roughly 6 million gallons of treated wastewater into the local groundwater basin per day. The East Valley Water District was utilizing the San Bernardino Valley Municipal Water District, a regional water wholesaler, to act as the lead agency on the project and carry out the environmental certification for it by inspecting and ratifying the environmental documents for the undertaking that had to be filed in compliance with the California Environmental Quality Act.
Historically, under a joint powers authority formed in 1958, untreated wastewater originating within the jurisdiction of the Highland-based East Valley Water District had been treated by the City of San Bernardino at the San Bernardino Municipal Water Department-run Margaret H. Chandler Water Reclamation Plant in San Bernardino and then the rapid infiltration and extraction tertiary treatment facility in Colton, which is jointly owned by Colton and San Bernardino, but operated by San Bernardino. The purified water was then discharged into the Santa Ana River.
In the suit, San Bernardino alleged there was no comprehensive cost analysis and that the total price tag for the Sterling project and the true cost, including the escalation of local water rates, had not been laid out. The suit further alleged that the environmental impact report was inadequate in its provision of “substantial evidence or analysis” assuring the project would not substantially degrade water quality in the Bunker Hill Basin and would not harm the Santa Ana River sucker fish. The public health and cost implications of the project were exacerbated, the city claimed, by the absence of a process for “de-salting” groundwater, that is, the removal of nitrates and other untoward contaminants from the water. Moreover, the suit alleged, the project did not take into consideration that the City of San Bernardino, through its water department, had arranged to make water treatment services available to the district, was continuing to make water treatment services available, was about to embark on its own wastewater recycling plant project, the San Bernardino’s Clean Water Factory, to recharge groundwater, and that if East Valley departed from the longstanding arrangement and began treating its own wastewater, then San Bernardino’s water provider would stand to lose no less than $4.5 million annually for 20 years.
In response, both the Highland-based East Valley Water District and the San Bernardino Valley Municipal Water District asserted that the $128 million project, which was dubbed the Sterling Natural Resource Center, offered the best future arrangement for water treatment and local groundwater recharging as well as the best protection for ratepayers within the East Valley Water District, the cities of San Bernardino and Highland, and unincorporated San Bernardino County as well as the larger service area of the San Bernardino Valley Municipal Water District.
In June 2016, San Bernardino followed up with a second lawsuit in which the East Valley Water District was the sole named defendant, alleging the district had violated state law in circumventing the disclosure process in the pubic scoping arrangement for the proposed sewage plant. The city maintained the East Valley Water District was proceeding with the project despite not having licensing or authorization to provide wastewater treatment and disposal services, and that it had neglected to seek that authorization from the San Bernardino County Local Agency Formation Commission, which is charged with ascertaining jurisdictional boundaries relating to the provision of infrastructure and public services.
In January 2017, both the East Valley Water District and the San Bernardino Valley Muncipal Water District asked San Diego Superior Court Judge Joel R. Wohlfeil, who was hearing the case against them, to dismiss it. Wohlfeil at that time rejected the motions. But after further hearings and considerations, Wohfeil ruled “The CEQA [California Environmental Quality Act] process was adequately undertaken such that the lead agency and the public were reasonably able to analyze the costs and the benefits” of the Sterling Natural Resource Center.
The city’s lawsuit against the East Valley Water District relating to the violation of the process that included excluding the San Bernardino County Local Agency Formation Commission from looking into which entity would most logically be able to carry out the function of regional water purification and groundwater recharge proceeded.
In the fall of 2017, Travis-Miller took up the matter in earnest, looking to find a way to negotiate a settlement that would conceivably involve having the East Valley Water District abandon its plan to complete the Sterling Natural Resource Center and come to an accommodation by which San Bertnardino would continue to provide the regional water treatment service, facilitating the eventual construction of the city’s San Bernardino Clean Water Factory. In pursuit of this settlement, Travis Miller turned to Devereaux, who was also serving as a consultant to the East Valley Water District, to assist her in the negotiations. Devereaux’s input was deemed particularly valuable given that in his seven years as the chief executive officer of San Bernardino County, he had developed a thorough knowledge of the manner in, and the principles under, which the San Bernardino County Local Formation Commission operates.
Ultimately, a resolution of the litigation was crafted short of trial which entailed East Valley being able to walk away from the 1958 joint powers agreement and no longer be required to use San Bernadino’s water reclamation services once the Sterling facility was completed. San Bernardino was to be recompensed for the $4 million in revenue it previously realized in the contractual deal with East Valley through the San Bernardino Valley Water District, which is the water wholesaler for the cities and communities of San Bernardino, Colton, Loma Linda, Redlands, Rialto, Bloomington, Highland, East Highland, Mentone, Grand Terrace and Yucaipa, agreeing to deliver 3,000 acre-feet of state water project water annually to San Bernardino for a period of 10 years, which was estimated to save the city at least $450,00 and perhaps as much as $600,000 over the next decade. East Valley also agreed to convey to the City of San Bernardino ownership of 22 acres it owns at the intersection of Sterling and Third streets near San Bernardino International Airport which was previously purchased for but never used as a new district headquarters site, for the city to develop as it sees fit. San Bernardino was to pay East Valley $8 million that the city over the years had collected from East Valley’s customers, under the terms of the joint powers authority agreement, for the future expansion of a large sewer line, contingent upon development in East Valley’s jurisdiction.
The City of San Bernardino also agreed to divert 3 billion gallons of water annually, which is used for regional recharge of the Santa Ana River and which could be marketed for as much as $8 million, to the Bunker Hill basin.
The settlement was arrived at during the tenure of Mayor Carey Davis. Valdivia and his team have revisited the terms of the legal settlement with the East Valley Water District. They believe they can establish that the settlement was in no way a good deal for the City of San Bernardino. Valdivia and those in league with him on the council believe that Travis-Miller having allowed Devereaux, whose loyalty to San Bernardino was compromised, they say, by his contractual relationship with East Valley, to take part in the negotiations constituted action inimical to the city’s interest, which thereby forms the basis for now being able to assert that Travis-Miller was terminated with cause.
Whether Travis-Miller’s acquiescence in Devereaux’s involvement in the settlement negotiations constitutes legitimate grounds for having terminated her is open to debate.
If it is now Valdvia’s contention that the December 2017 settlement with East Valley was contrary to the city’s interest, that clashes with public statements he made at the time in which he asserted he was himself a key player in arriving at the agreement to end a lawsuit that was consuming city time and resources.
Further contradicting the assertion that the lawsuit settlement can serve as a legitimate basis for terminating Travis-Miller are statements from the region’s public officials, who characterized the settlement as one that was transparent and well thought out.
Among those who claim the lawsuit settlement prevented the squandering of further public resources is East Valley Water District General Manager and Chief Executive Officer John Mura.
According to Mura, the litigation the City of San Bernardino was pursuing against his agency was unlikely to have had a suitable outcome for any of the parties had it been continued to trial. Both Travis-Miller and Devereaux played what were essentially limited roles in an effort involving a multitude of officials with the water district and the city to disengage both parties from a counterproductive legal misadventure that had already squandered monetary resources and the time and energy of both entities and would have done further damage to the community, Mura said.
Stacey Aldstadt, who began as the general manager of the San Bernardino Water Department in 1996, was a prime mover in the city’s decision to file suit against East Valley over the Sterling project. Under Aldstadt’s guidance, the city had aggressively kept on with the second lawsuit relating to East Valley’s pursuit of the Sterling plant, even after the first suit was dismissed. Ultimately, Aldstadt was put on administrative leave by the City of San Bernardino in September 2017, pursuant to action taken by the San Bernardino Water Department Board of Directors. The move toward Aldstadt’s dismissal came one month prior to the City of San Bernardino retaining Devereaux as a consultant. Aldstadt was thereafter eased out the door by the board. It was in the aftermath of her departure that the city and the water district arrived at a settlement with regard to the at-that-time yet-pending litigation.
“Prior to any lawsuits being filed, several meetings were conducted to frame the issue of East Valley constructing a sewer treatment facility to treat the flows within our district boundaries,” according to Mura. “The meetings were attended by [San Bernardino Valley Municipal Water District General Manager] Doug Headrick, Stacy Aldstadt and I. The original scope of the meetings focused on the amount of river diversions that would be acceptable given habitat issues and downstream delivery obligations, the future of the JPA [joint powers authority] between East Valley and the San Bernardino City Water Department, and operational impacts to the city should sewer flows be reduced or eliminated. It was decided that East Valley should conduct a feasibility study to determine what amount of sewer flows should be diverted to a new facility if one was to be constructed. Options that were studied included a facility that would treat future flows specifically for the Harmony Project, half the existing flows of 3 million gallons per day or the entire existing flows including future growth.”
The Harmony Project was a proposal by the Lewis Group of Companies that entailed 3,632 houses on 658 acres within a total 1,657-acre project area to include a neighborhood commercial center at the confluence of Mill Creek and the Santa Ana River, directly adjacent to the San Bernardino National Forest in the City of Highland and its sphere of influence.
Mura said, “The study also considered best use of the recycled water, should it be used for direct use by delivering it as irrigation supply or recharge into the groundwater basin. An RFP [solicitation for bids] was developed, and Stacey [Aldstadt] was invited and participated on the final interviews to approve the final scope of the study and the selection of the vendor. During this time, it was obvious that this would be a very complex issue that would require a high degree of negotiation and collaboration. The general managers agreed that it would be beneficial if a professional conflict resolution facilitator be brought in to work with the group. In addition, each agency agreed that an ad hoc committee be formed made up of the chairperson and vice chairperson from each agency. The thought was that as the facilitator worked with the general managers we would meet with the ad hoc committee consisting of the two members from each of the three agencies regularly to report on our progress.”
According to Mura, “Unfortunately, this framework dissolved when Stacey unexpectedly without any notice filed lawsuits against both Valley [San Bernardino Valley Municipal Water District] and East Valley as it related to what was now the Sterling Natural Resource Center. During the period that the legal action was taking place Valley and East Valley staff and board members continued to work collaboratively to move the project forward and resolve the legal issues. In addition, much effort was made to develop a settlement to avoid a long legal battle. Unfortunately, efforts to communicate with the city were prevented by Stacey.”
Mura said San Bernardino Valley Municipal Water District Board Member Susan Longville suggested that Devereaux could act as an intermediary for all three entities – the East Valley Water District, the San Bernardino Valley Municipal Water District and the City of San Bernardino – to assist in reaching a resolution, “but Stacey killed that idea with her board.”
Mura said that despite the consideration that the San Bernardino Municipal Water Department is a division of the City of San Bernardino, the city’s water board and Aldstadt were impervious to the oversight of the city council and city management. At a given point, Mura said he sought to utilize Devereaux as an emissary to the city. “Previously we were unable to break through the wall that Stacey had established, given the water department was treated as a separate entity apart from the city,” Mura said.
San Bernardino city officials were first given a sobering realization of what the litigation was risking when the first of the city’s lawsuits was dismissed, Mura said.
“The first legal action against the project EIR [environmental impact report] was ruled on by the judge in favor of the Sterling project on all counts,” Mura said. “This left the second case as it related to LAFCO [the San Bernardino County Local Agency Formation Commission] remaining. At this time, because of the city’s defeat and the appointment of a new city manager [i.e., Travis-Miller], the mayor [Carey Davis] began to take more interest in the issue.”
Mura said that at that point Devereaux was “primarily providing us advice regarding how to work with LAFCO and their approval process. As a result of Greg Devereaux’s efforts, meetings with the three agencies led by the mayor and one member from each board were conducted. At the time Chris Carrillo from East Valley, Susan Longville from San Bernardino Valley Municipal Water District and Judy Valles from the San Bernardino City Water Board made up the ad hoc committee. Once each agency had an opportunity to communicate their concerns, the executive staff from each agency began work on settlement options for the committee to consider. It’s important to remember that at this time Stacey had been relieved of her duties and Andrea was taking the lead on behalf of the city. Doug [Headrick], Andrea [Travis-Miller], [San Bernardino Municipal Water Department General Manager] Miguel [Guerrero] from the water department and myself held a couple meetings with the mayor to provide historical perspective and details regarding the issues. Following those meetings, Andrea, Doug, Miguel and myself began to draft elements of a draft settlement agreement for the ad hoc committee to consider. The bulk of the settlement discussions were developed during meetings attended by myself, Andrea, Robin [Ohama, the deputy general manager in the city’s water department] and Miguel. Greg Devereaux and other consultants were involved, helping with several technical issues that needed to be considered as part of any settlement discussions.”
According to Mura, “Once the draft agreement was constructed, Andrea and I presented it to the ad hoc committee and then to each elected body for consideration and approval.”
Mura said the facts of the matter did not support the conclusion that Travis-Miller was in any way remiss in working toward a settlement of the litigation between the East Valley Water District and the City of San Bernardino.
“The bottom line regarding this issue is that several people took part in an extremely transparent process to resolve a very complicated issue,” Mura said. “It took leadership, creativity and a lot of hard work to develop a settlement that will benefit the entire region for many years to come.”
By Mark Gutglueck