On June 25 or shortly thereafter, members of the Upland City Council will make a crucial decision with regard to their city’s future when they   determine whether to keep city manager Stephen Dunn in place.

Stephen Dunn

Fallout from the political corruption scandal that ultimately resulted in the indictment of and eventual guilty plea by former Upland Mayor John Pomierski put former city manager Robb Quincey under a cloud. In January 2011, less than two months before Pomierski was indicted and less than seven months after FBI and IRS agents served a search warrant at Upland City Hall, the city council put Quincey on paid administrative leave and selected Dunn, who for nine years had been Upland’s finance director, to serve as interim city manager. In May, 2011 the city terminated Quincey and the following month hired Dunn. In taking the position, Dunn agreed to accept a salary and benefits package that was more than 44 percent less than that provided to his predecessor.  Whereas Quincey had been provided with a base salary and add-ons  of $368,529 and benefits of $92,096 for a total of $460,625, by contrast  Dunn’s contract called for him to receive $189,425 in salary with $65,119 in benefits, for a total annual compensation of $254,544.
Dunn’s salary was on the lower end of the scale among city managers in Southern California and he was paid less than one of the employees he oversees, the police chief, who is provided with a base salary and add-ons of $229,724, plus benefits worth $76,898 for a total of $306,621 per year.
Significantly, Dunn declined a multi-year contract, insisting that the council review his performance after his first 12 months of overseeing the 73,732 population-City of Gracious Living’s 327-employee, $116-million-budget municipal operation.
Once he was installed as city manager, Dunn was entrusted by the city council with the Herculean task of instituting financial reforms to prevent the city from running aground. Like all California cities, Upland was seeing shrinkage in its revenues brought on by the foundering national, state and local economies. Moreover, Quincey, whom Pomierski had handpicked to serve in the city manager’s role in 2005, had negotiated extremely generous employee contracts with the city workforce’s bargaining units, a ploy which some believe was intended to allow Pomierski to proceed with all manner of depredations at City Hall, including applying a selective land use, zoning and permitting policy that benefited those willing to pay the mayor bribes while punishing those who refused to participate in the graft.  The financial commitments the city made in raising municipal employee salary and benefit levels as a consequence of the contracts negotiated by Quincey meant that the city’s expenditures would clearly outrun available revenue, resulting in a severely unbalanced budget. At the outset of Fiscal Year 2011-12, a budget was approved that contained a $3.1 million deficit.
Dunn, however, formulated a program to lay off 16 and grant 28 golden handshakes to reduce the city’s payroll to 283. He implemented that plan by the end of July 2011.  Among those eliminated were four department heads – fire chief Mike Antonucci,  who received a base salary and add-ons  of  $170,698 and benefits of $71,692 for a total annual compensation of $242,390; public works director Anthony La, who drew a base salary and add-ons  of $177,030 plus benefits of $58,974 for a total of $236,004 per year; community development director Jeff Bloom, who was paid a base salary and add-ons of $165,422 plus benefits of $54,197 for a total annual compensation of $219,618; and Haweda Nash, the human resources/risk management director. with a base salary and add-ons  of $159,230 plus benefits of  $54,902 for a total of $214,132. By late August, the $3.1 million deficit was entirely erased.
Left out of the bloodletting in 2011-12 was the police department. But in upcoming 2012-13, the imperative to trim spending remains and with most other municipal divisions already thinned out, Dunn brought his focus to bear there.
The police department presented a particular challenge on multiple grounds. First, popular sentiment in many quarters held against reducing law enforcement function. Second, the police union represents the strongest of the city employee bargaining units, with a law firm on retainer and a history of filing legal challenges that had proven expensive for the city to defend. Third, under the terms of one of his contract amendments, Quincey’s own pay hikes were tied into those to be provided to members of the police department, giving him an incentive, when he was negotiating with the police union, to provide them with salary and benefit concessions. One of the costly concessions Quincey had made to the police union pertained to contributions to the police officers’ retirement fund. While both the city and the officers have traditionally contributed to that fund, previously each police employee was making a contribution equal to 5.8 percent of his or her own yearly salary. Under the  terms negotiated by Quincey more than two years ago, each officer’s contribution is now reduced to 3.9 percent, as of July 1 the contribution will be reduced to 1.9 percent, and on January 1, 2013 the officers will discontinue making that payment and the city will pick up their entire 5.8 percent retirement contribution. That change is locked into the contract the union and the city signed. Dunn made an effort to have the officers give back that benefit, but the police union did not consent to doing so. Consequently, Dunn responded by targeting the police department for layoffs.
In the plan Dunn initially worked up with the assistance of police chief Jeff Mendenhall, it was proposed that the department eliminate one of its two captains, reduce its staff of ten sergeants to eight, drop from a force of 49 officers to 42 officers, while keeping in place all five of the department’s lieutenants and all nine of its detectives.  Simultaneously, Dunn proposed laying off one police service coordinator, three police service technicians, one evidence clerk, and one records specialist. That proposal gouged a nerve, prompting complaints that Dunn is intent on gutting the police department and public safety. Members of the city council were sent emails to that effect from both identified and anonymous residents and department employees.  Nevertheless, the police union has not consented to a rescission of the agreement to have the city pick up the police officers’ portions of their contributions toward their pension fund.
Dunn relented somewhat, moving forward with a plan that called for reducing the police department by 12, including six sworn officers and six civilian support staff. There were no actual layoffs of police officers, as there were already vacancies in six sworn positions. One of the civilian police positions was vacant as well, such that there will be five actual layoffs.
Despite the attenuation of Dunn’s police department reduction effort, he has not escaped criticism as a hardhearted, bottom-line oriented administrator.  His critics seized on the release of one of the police officers, Dan Tolliver, who had been with department since 1993 and was serving in the capacity of resource officer/police department liaison with the Upland Unified School District.
Tolliver was originally diagnosed in September 2005 with gastric cancer. After a six-month regimen of chemotherapy and five weeks of radiation, his cancer went into remission in April 2006. He went back to work full time with the police department but in September 2007, Tolliver was hospitalized again. During surgery, doctors found a tumor in his pancreas, which was redressed with six more months of chemotherapy. He was back to work in the summer of 2008, and was given the assignment of school resource officer. In April of this year Tolliver filed a workers compensation claim with the city.
Dunn has been attacked for callously terminating Tolliver against his will. According to those assailing Dunn and city clerk Stephanie Mendenhall, who last year was given secondary and tertiary assignments as the city’s director of human resources and risk manager in the aftermath of Nash’s departure, Tolliver, who yet had hopes of returning to work once again,  was informed by email that he was being handed an involuntary retirement.
One of Dunn’s more recent economizing efforts has yet to be embraced by the city council. Dunn recommended that the operation of the city library be outsourced and that the city negotiate a contract with Maryland-based Library Systems and Services, Inc. to do just that. But the Upland Library Board of Trustees has balked at that request, concerned that Library Systems and Services, Inc.’s profit motive would ultimately deprive patrons of services local tax dollars are paying for without any guarantee of savings to the city.
Perhaps sensing that with Dunn’s job review approaching he is more vulnerable than at any time in the last year, his critics have recently stepped up the effort to convince the city council to jettison him.
In the face of the layoffs, Dunn, and to a lesser extent Stephanie Mendenhall, are being blamed by city employees and their associates and family members for morale problems throughout City Hall, for creating an atmosphere of confusion and insecurity among employees as well as providing inconsistent information on how bumping rights (that is, a process by which city employees with greater seniority whose positions have been eliminated can supplant employees in other posts) will work.
Reliable reports have reached the Sentinel, confirmed by employees, that some employees “are at one another, yelling” and that at least some of Upland’s city workers believe “the team spirit that used to exist in the city has been totally destroyed.”
In this way, those  who are not favorably inclined toward Dunn report, there is a significant morale problem among employees in Upland and a perception that Dunn has sought to weaken city employees individually and collectively to create a stronger position for himself.
Dunn and Mendenhall have been criticized for using emails to inform employees that they were being laid off.
Furthermore, Dunn has been accused of protecting and promoting Stephanie Mendenhall and his own executive assistant, Annette Guthrie. Others have zeroed in on the consideration that Dunn was finance director during all five years of Quincey’s tenure as city manager and was thus implicated in the fiscal excesses the Pomierski/Quincey regime is accused of foisting on the city.
Dunn’s detractors are matched by an equally passionate group of Dunn’s supporters, who hail his efforts at reform and economy as exactly what the doctor has on order for the ailing City of Gracious Living. With regard to the charge that Dunn was complicit in the profligate spending policies that proliferated under Quincey, members of the city council, who will ultimately pass judgment on Dunn, are acutely aware that the past council provided Quincey with the authority to fire all city department heads at will. Consequently, Dunn did not have the authority nor the leverage to oppose Quincey’s financial plans. Nevertheless, he documented what could be construed as his dissent with regard to at least some of the former city manager’s spending habits by means of interoffice memoranda which were carbon copied to the city council.
Mayor Ray Musser, who represents one of five votes that will determine Dunn’s continued tenure with Upland, offered a positive assessment of the work the city manager has done.
“Well, he’s done a good job generally, in my view,” Musser said. “He’s reduced top management from nine to six department heads. He’s walked the talk. He’s come in for [i.e., being paid] a whole lot less than the prior city manager. He has encouraged us to get rid of lifetime medical benefits for all council members and department heads. Who else could have done that? That ticket is a thousand dollars per month per family. The clock is ticking and in two or three years it would have been even more. That was an unfunded liability we had no control over and he did an excellent job dealing with that. He’s wrestling with balancing the budget. That is not a fun job, but he is determined and he is doing the best that can be done balancing the budget. We are doing a whole lot better in that regard than some other cities.”
The same courage Dunn showed in recommending to the council members that they take away their own medical benefits is on display, Musser said, in his efforts to have the city’s employee unions give back portions of the generous benefits promised to them by Quincey.
“The city is committed to paying the entire pension contribution of our safety employees, which is nine percent of their salaries and for the pensions of our non-safety employees, which is seven percent,” Musser said. “That is a whole lot of money and it is breaking this city. Steve has asked them to forego that and told them that if they pick it up from here on that will save the city enough that we will be financially okay for at least the next two years. The unions have not agreed to do that and he has said that the only choice is to cut across the board ten percent. He had the courage to say that and he has the courage to do exactly as he said if he doesn’t get the concessions. He has gotten a handle on overtime in the public works department. He is now working on getting that done in public safety, which is hard to do because when you have a fire and need resources, it’s harder to control the hours worked. He is doing things that should have been done a long time ago. “
Musser said he understood that some of the employees who had been laid off were bitter and that many of the remaining employees are concerned about being laid off in the future. Dunn is merely dealing with financial reality, the mayor said, and cannot be rightfully blamed for carrying out the directions of a council that wants to put the city’s financial house in order.
The council is relying on Dunn to come up with sensible answers to the challenges facing the city, Musser said, indicating that the council evaluates the options he provides before ultimately voting to authorize the action.  Musser said he could not speak for the rest of the council and that as council members, “We dare not talk to more than one person about this except during meetings,” in reference to the Ralph M. Brown Act, California’s open public meeting law which prohibits a quorum of a governing body from discussing official action. Yet he said his sense of it was that the rest of the council was satisfied with Dunn’s performance.
“He hasn’t been perfect and I feel we will give him feedback on where he needs to improve,” Musser said. “We’re a little bit late on doing this evaluation. His one year contract was up on June 4. I think after we get to his job review on the 25th, he’ll still be our city manager.”
Across the political spectrum on the city council, it does not seem that Dunn has too much to worry about in terms of job security.
Councilman Gino Filippi, who first came into office in 2010, is the sole declared candidate against Musser in the upcoming November mayoral election. There does not appear to be any significant difference between Musser and Filippi with regard to Dunn, however.
“From my perspective, the city manager continues to do what has been asked, which is to stop the bleeding, reduce expenses and identify methods to balance the city’s budget in order to avoid municipal bankruptcy,” Filippi said. “He has engineered Upland’s fiscal recovery plan and as painful as it may be, it had to be done.  He has met the challenge, keeping in focus that Upland residents and businesses are the priority.  There is much work to be done and he has my full support.  Of course, I believe his contract should be renewed.  He is a silver lining to say the least and I look forward to working with him for at least a couple more years at the minimum.”