(November 27)  NEEDLES — The Needles City Council on November 12 signed off on a proposal by its new city manager, Rick Daniels, to utilize a firm he vouched for, Development Management Group, Inc., to provide economic development consulting for the city. Meanwhile, the city in Riverside County from which Daniels recently departed, Desert Hot Springs, expedited a declaration of fiscal emergency as a last ditch effort to stave off bankruptcy. That declaration came November 19, one week after Daniels made his successful pitch to the Needles City Council  to hire Development Management Group.
This summer, the Needles City Council, which for years has struggled with a stagnating local economy, gambled on hiring Daniels, whose apparent success in allowing Desert Hot Springs to spring back from a previous bankruptcy filing in 2001 and undertake an impressive array of public works and infrastructure improvement projects impressed them.
Daniels, who had spent most of his career in the private sector, including a prolonged tenure as an executive with Waste Management, Inc., held only one public sector management post before he was hired as  Desert Hot Springs city manager. As an outgrowth of his involvement in the waste hauling industry, he founded a company in the late 1990s, Mine Reclamation Corporation, with which he proposed to operate a landfill within the abandoned Eagle Mountain Mine next to Joshua Tree National Park, into which he proposed depositing millions of tons of trash from Los Angeles County transported to the site by train. The venture was dropped when the Supreme Court ruled against the environmental certification for the plan. Along the way Daniels had assumed the position of president and CEO of the Coachella Valley Economic Partnership, a consortium of business owners, financiers and developers. From that position he obtained the post of top administrator with the Salton Sea Authority. It was his experience in this public sector position that he used to leverage obtaining the Desert Hot Springs city manager position.
While with Desert Hot Springs, one of the poorest cities in the state, Daniels pulled a seeming rabbit out of his hat, undertaking infrastructure improvements that previously seemed beyond the city’s means, including paving 34 miles of city streets. He then undertook to build a municipal Health and Wellness and Aquatic Center. The cost of that project ran to $20 million, however. Daniels’ spending spree has ultimately left Desert Hot Springs with an intractable debt in the form of more than $30 million in delinquent bonds  and an ongoing yearly operation cost at the health center of more than $1 million.
Nevertheless, it was Daniels’ can do attitude, unfettered by the restrictions that typically attend the attitudes of public sector managers that so attracted the Needles City Council.
Daniels benefited from the perception that he maintained connections within the business community and political figures in Southern California, contacts that Needles city officials hope can be utilized to spur investment and economic development in the Needles area.
This summer, a city manager search committee, consisting of council members Linda Kidd, Jim Lopez and Tom Darcy was formed, and it undertook to lure Daniels, one of the highest paid city managers in the state of California with a total annual compensation package in Desert Hot Springs that exceeded $300,000, to Needles. Despite the fact that Needles has a budgeted range for the city manager position of $129,000 to $132,000 per year and was actually paying its acting city manager, David Brownlee, an annual salary of $99,728.72, the search team offered, and Daniels eventually accepted, an initial salary of $197,000 per year with annual increases of $10,000 and a benefit package that provides $9,000 per year toward his retirement fund and $13,500 for his family’s medical, dental and vision coverage. The package granted him retirement eligibility at the age of 55 (a milestone he has already eclipsed), with a pension equal to 2 percent of his maximum salary times the number of years he has worked for the city.
Unbeknownst to the search committee, Daniels was actually desperately seeking to depart Desert Hot Springs, as two council members were gunning to fire him and were in search of a crucial third vote to ensure his exodus.
In April, Daniels sought to leave Desert Hot Springs, applying for the position of county administrator in Clackamas County in Oregon. He was selected as one of three finalists in the competition for that post and as the interview process advanced, Daniels maintained a cover story to the effect that he was merely vacationing in Oregon, where he was raised and attended college. At the final stages of the Clackamas County selection process at the end of June, it appeared that Daniels had the job and it then became known to the Desert Hot Springs City Council’s members that he was gearing up to leave Desert Hot Springs. Daniels’ move to Oregon fell through, however, when Donald Krupp, one of the other two finalists, was given the county administrator’s post in July.
Meanwhile, the risky economic policy Daniels had quarterbacked in Desert Hot Springs was beginning to catch up with the city.  In addition to the delinquencies in more than $30 million in bond payments, Desert Hot Springs was seeing losses in other failed ventures, such as the  $250,000 in taxpayer funds Daniels ventured in 2010 to lay the ground for and promote a music festival that never came off. Though he initially said the city would recover the money from the concert series’ promoter, the city never did so.
In June, city finance director Terrence Beaman resigned after a lengthy dispute with Daniels with regard to Daniels’ proposal to utilize $4 million in city reserves to cover a $4 million deficit. After the municipal and financial management consulting firm Urban Futures assessed Desert Hot Springs’ economic condition, it concluded the city was in a deteriorating financial state that would lead to insolvency within 12 to 24 months.
In looking past those blemishes on Daniels’ record, the Needles City Council committed to hiring Daniels on a three year contract commencing September 16.
Two months after he officially moved into the position, Daniels offered the Needles City Council a proposal that he said could turn the city around financially.
The first step, Daniels said, is the hiring of Development Management Group, Inc., for economic development consulting services at a cost of $7,000 per month to run through the end of the current fiscal year on June 30.
Development Management Group’s hiring will be coupled with ten further actions to augment the identification of businesses that would be amenable to locating in Needles and an active recruitment effort to bring those entities to town.
Daniels said his ten step plan for Needles’ economic rejuvenation consists of  creating a single coordinated business improvement strategy involving the Needles Downtown Business Alliance, Chamber of Commerce and Economic Development Corporation; tending to the city’s cleanliness and appearance; intensify law enforcement efforts to drive down the crime rate; attracting tourists; encouraging a population increase through new residential growth; increasing local healthcare options and services; bringing in tax-producing business; making businesses aware of Needles’ extraordinarily low energy rates; reinforcing the quality of education in the local school district; and doing the same at  the Needles Center of Palo Verde Community College.
Development Management Group will devote much of its business recruitment effort to putting together information packets about the city and providing them to potentially interested businesses.
Daniels predicted Development Management Group’s efforts will bear fruit that will justify extending the arrangement into fiscal year 2014-15.
Needles councilman Jim Lopez told the Sentinel that neither he nor his council colleagues had dwelled on the circumstance in Desert Hot Springs. “I don’t know anything about that city,” Lopez said. “A lot of California’s cities are going through tough times right now. When the state of California pulled RDA [Redevelopment Agency] authoity it killed a lot of economic development.”
Lopez’s reference was to 2011 legislation that dissolved all municipal redevelopment agencies. “It killed California cities when the state yanked those RDAs and it put a lot of cities out there in major debt. I don’t know anything about what went on before in Desert Hot Springs. We wish Desert Hot Springs the best.”
Despite that, Lopez said he “absolutely” continues to have faith in Daniels. “The entire council does,” he said.  “Needles has a real strong council and we are behind our city manager 100 percent. We are going through union negotiations and he is working on economic development. The city council runs our city. The city manager brings ideas to us. He is moving us forward in a positive direction.”
Lopez dismissed any suggestion he and the other members of the city manager recruitment committee had been hoodwinked into hiring Daniels.  “We are happy to have him here,” Lopez said. “He is a perfect fit for us  We did our due dilligence. We have a seven person council, six council members and the mayor. We are all very strong and positive. There is no backbiting with decisions we have made.”