By Mark Gutglueck
Palace intrigue rivaling that of any in the royal courts of Europe in the Seventeenth and Eighteenth Centuries played out at Upland City Hall earlier this year before hitting fever pitch earlier this fall.
A series of mostly clandestine events, triggering moves and countermoves and the merging of in some cases contrary political agendas resulted in a cascade of both formal and informal investigations, the ultimate outcomes of which remain in doubt. This has been accompanied by a drawn-out bureaucratic bloodbath which itself may or may not be through, one which has so far entailed the termination of the city manager and three department heads, and the narrow avoidance of the firing of the assistant city manager.
The dramatis personae in this tale include former city manager Rod Butler and the man brought in to replace him at least on an interim basis, Martin Thouvenell, assistant city manager Jeannette Vagnozzi, former fire chief Paul Segalla, former finance director Scott Williams and community services director Roberta Knighten.
At the heart of the matter are issues in large measure yet hidden from the public. Looming larger into the public consciousness are a series of decisions that have continually postponed a comprehensive reckoning with financial reality which at present is causing city officials to serious contemplate the ultimate dissolution of the city’s 110 year old fire and police departments. Moreover, more than four months after the city council cashiered city manager Rob Butler without any explanation, information has surfaced to indicate the council took that action because a majority of the members had come to believe that he had purposefully hidden from them or otherwise misrepresented to them crucial financial information.
Exacerbating the situation for Butler was the presence of his second-in-command, Jeannette Vagnozzi, an ambitious rising star in the municipal administrative constellation whom Butler had brought in last year, ostensibly to serve as his aide-de-camp and hatchet-woman, who had been serving as the assistant to the city manager for nearly a decade in the not-too-distant City of La Verne, three cities removed from Upland west across the border with Los Angeles County. Ultimately, Vagnozzi’s involvement in his administration would contribute to Butler’s demise in Upland.
Butler’s presence in Upland was itself remarkable. It is unlikely that there is anyone with as much municipal managerial experience as Butler possesses who was less suited to be Upland city manager in the time he would inhabit the office. A journeyman municipal administrator who had cut his teeth as a young man in Claremont, Butler slowly but steadily ticket punched his way up the governmental totem pole in Chino where he spent four years as a senior management analyst working on financial matters, Ontario, where he was an administrative officer in the city’s housing and redevelopment agencies, and Pomona, where he was assistant to the city manager. In January 2009, at the age of 44 he obtained his first assignment as city manager in Crescent City, where he remained for 23 months and abruptly departed to become the city manager of Patterson in December 2010. After a little more than three-and-a-half years there, Butler departed when he was offered the opportunity in August 2014 to replace Stephen Dunn in the role of permanent city manager in Upland.
Butler had been raised in Upland, where he attended Western Christian High School. He and others hailed his hiring in Upland as a homecoming, and there was talk of Butler, then 50, remaining for the rest of his career in the city of his youth. Upland, where he was given a three-year contract with a base salary of $189,629, was an indisputable step forward for Butler, who had been paid $100,000 yearly in Crescent City, the 7,643-population county seat of Del Norte County, and $135,000 annually with 19,033-population Patterson. But managing 74,000-population Upland, with its rocky recent history involving its former mayor John Pomierski and former city manager Robb Quincey having been indicted and convicted in 2011, 2012 and 2013 of political corruption, which both had engaged in with the collusion of much of city staff, would prove to be a far greater challenge than Butler anticipated when he took the job.
Upland had taken a beating with the Pomierski scandal, its reputation trashed, while its function had been undercut by a housecleaning undertaken by the reformist mayor, Ray Musser, the long suffering political outsider on the council who for nearly a decade had futilely resisted but then succeeded Pomierski after his downfall, and the former finance director, Stephen Dunn, who had been elevated to city manager to succeed Quincey. In that housecleaning, 26 city employees, including four department heads – some of whom were known to have or were suspected of having cooperated with Pomierski and Quincey in their depredations – were shown the door in June 2011. That move both boosted and dimmed morale at City Hall. At the same time, the city found itself saddled with what many deemed overly generous salaries and benefits that had been provided to city employees, including police officers, during the Pomierski regime to buy their silence with regard to the highly questionable activity that had been going on at City Hall during the first decade of the Third Millennium. That generosity included conferring upon city employees pensions that would pay many of them a yearly retirement stipend approaching or matching their annual salaries while they were working. In this way, the city, which by the time Butler arrived had a general fund budget in the $40 million range, was saddled with having to make an annual payout of approaching $7 million of that $40 million – roughly 17.5 percent – to pay for former employees no longer working for or contributing anything toward the current function of the city. This took a sizeable bite out of the money available for basic city operations. And while some city employees were unconnected and uninvolved in the excesses of the Pomierski years, still hiding among them were several of Pomierski’s enablers, ones who were yet enjoying the spoils – in the form of inflated salaries and benefits – of the Pomierski corruption.
Affable and easygoing, full of Christian charity, Butler was constitutionally incapable, it seemed, of taking a hard line with anyone. The prospect that he would ride herd on a municipal structure that was in need of constant guidance, not to mention committed discipline that would include forcing the city’s employees to give back the spoils of corruption by making concessions in contract bargaining, was equally unlikely. Indeed, Butler sought to outright ignore the more unpleasant and confrontative elements of his job, exuding warmth and bonhomie, endeavoring to get along with everyone, being responsive to all parties’ concerns in words or promise, but unable to be decisive when responding with action to one demand or set of demands put him in conflict with another demand or set of demands.
Complicating the circumstance was the leadership team Butler had inherited. Upon arriving In Upland, the closest thing Butler had to a second-in-command was Stephanie Mendenhall, Upland’s administrative services director/human resources director/city clerk. Mendenhall had been the city clerk contemporaneously with Pomierski being mayor and Quincey being city manager, and she had processed while she was city clerk a number of highly questionable arrangements directly related to the corruption of the Pomierski regime. Among those were seven enhancements to Quincey’s contract as city manager which resulted in his total annual compensation package zooming from $235,000, consisting of $195,000 in base salary and $40,000 in benefits and deferred compensation when he was hired in 2005, to a base salary and add-ons of $368,529 with benefits of $92,096 by January 2011, for a total annual compensation of $460,625, making him among the highest paid city managers in the state. Mendenhall, as city clerk, processed at least two of those enhancements without a vote of the council and based only upon the signature of Pomierski on the document granting Quincey each of those raises. What is more, Stephanie Mendenhall’s husband, Jeff, was Upland police chief when Butler became city manager. Mendenhall had been an up-and-comer in the police department during Pomierski’s reign, during which the department ignored increasingly obvious indications that Pomierski was on the take, shaking down individuals with applications for permits at City Hall or projects pending before the Upland Planning Commission or Upland City Council, which Pomierski controlled, and taking in bribes as fast as those who understood the political lay of the land in Upland were willing to hand them out. Repeatedly, in 2004 and in 2008, the Upland Police Officers Association supported Pomierski in his quest for reelection. In return, Pomierski utilized Quincey to continuously up both the pay and benefits for members of the police department, including that of the rank and file officers and those of higher rank, such as Mendenhall. Brought in to function within this milieu, Butler found himself unable to buck the current that called for keeping city employees, who had moved so far ahead by acceding to the Pomierski’s formula for governance and self-enrichment, in the money themselves.
To get along, Butler went along. He would soon be given the sobriquet of “Mr. Smiley,” in reference to his seemingly perpetually friendly countenance calculated to melt the heart of anyone he was dealing with. Still, the more he attempted to please everyone, it was beginning to become apparent that he was not pleasing anyone. Simply stated, Upland needed less of a Christian and more of a lion.
Paradoxically, two events very early in Butler’s tenure slickened the ground beneath his feet.
He had been hired in the midst of the 2014 municipal election cycle. Two of the council incumbents, Debbie Stone and Gino Filippi, were vying for reelection. Another incumbent, Brendan Brandt, had opted out of seeking reelection. Vying in that election were a number of others, including planning commissioner Carol Timm and Stephen Dunn, who had left as city manager in June of that year. While he was city manager, Dunn had installed as his administrative assistant Annette Guthrie, who had previously worked under Dunn as an employee in the finance department when he was Upland finance director. Guthrie had remained in that position after Dunn’s departure, however, and the interim city manager who had succeeded Dunn, one-time La Verne City Manager Martin Lomeli, and Stephanie Mendenhall, had determined that Guthrie’s administrative assistant position was superfluous. While the city was in the process of eliminating the administrative assistant post at the time Butler arrived, that process had not yet been completed. Stephanie Mendenhall, in her capacity as administrative services director and human resources director, took possession of Guthrie’s office computer, whereupon her review of email correspondence thereon showed communication between Guthrie and variously Stone and Filippi, which Mendenhall deemed as being related to Stone and Fillippi’s then-ongoing electoral efforts. The matter was complicated by the consideration that Guthrie and Dunn were at that point cohabitating and Dunn, Stone and Filippi were running for city council as a slate. Accusations that Guthrie was misusing city facilities for political purposes were raised and she was ushered toward the door, though a $50,000 severance was conferred on her as she left. Butler, who had been in the city manager’s position for less than a month when this was consummated, acquiesced in Mendenhall’s sacking of Guthrie. Because of the alliance that had developed between Dunn, Stone and Filippi by that point, Stone and Filippi’s relationship with Butler had essentially started off on the wrong foot.
Secondly, during Butler’s first week on the job, Lomeli remained at Upland City Hall as a consultant to assist in getting the newcomer oriented. On his second day, Lomeli hosted a meeting with former Upland Police Chief Martin Thouvenell. In the course of this meeting it was suggested that Butler have the city hire Thouvenell as a consultant/adviser. Butler, who said he would consider the suggestion, never acted upon it.
Not quite six months into his assignment as city manager, Butler encountered signs that his tenure with the city might not be all that secure. As the council took up his six-month performance review, Stone and Filippi’s displeasure with the resolution of the Guthrie matter and Filippi’s unspoken disappointment that Thouvenell had not found a place in Butler’s cabinet manifested. At that point, there was an indication that both Stone and Filippi would entertain having Butler replaced. That proposal failed to get the necessary support of a third member of the council.
In the late winter of 2015, Butler himself privately expressed his hope that many of the difficulties facing Upland could somehow resolve themselves, that a modus vivendi between the factions on the council could be worked out and that he might just be able to hang on to his job at least through his second anniversary in Upland in August 2016 and maybe to the completion of his contract in August 2017. But as Winter 2015 transitioned into Spring 2015, it became increasingly clear that Butler would not be able to carry any of that off by the force of his milquetoast personality alone. To remedy the situation, Butler asked for, and was granted, authority to hire an assistant city manager.
Thus, Jeannette Vagnozzi entered the Upland picture. Vagnozzi came to Upland from LaVerne, where for 25 years she had held increasingly more important, involved, and complicated positions of responsibility, ranging from public information officer to municipal elections officer, public outreach coordinator, risk manager, city treasurer, strategic planner, city clerk and finally assistant to the city manager.
Officially, Vagnozzi was expected to take on the assignments that Stephanie Mendenhall abandoned when she retired from the city in July 2015 – administrative services director, human resources director, risk management director and city clerk. Those were her official functions and she was vouchsafed the title of deputy city manager. Unofficially, but more accurately, she was to serve as Rod Butler’s backbone, serve as his hatchet-woman, do the dirty work he was incapable of or unwilling to do himself.
It is not known, precisely, at what point, Vagnozzi, who is not without ambition of her own, came to recognize the opportunity before her. Within five to six months, upon fully acclimating herself to Upland, she would realize that Butler’s grip on the post of city manager was growing tenuous. Indeed, a city consultant would offer a warning to Butler that he need be very careful with regard to Vagnozzi, expressing himself in strong language, telling Butler he could end up with his “throat cut.” In his typical fashion, Butler disregarded such a disquieting suggestion and he instead embraced Vagnozzi as a key member of his managerial team. He was in no position, nor was he psychologically equipped, to run an organization in which he was at odds with the individual handling the primary elements of his function. Governance in Upland was already complicated enough.
A wild card in the mix was the mercurial political ebb and flow in Upland, not too much different from some other cities, with interlocking but constantly interchanging alliances that modulate, shift and evolve with the emergence of different issues or the rush of time and exigency.
Upland is a quasi-bedroom community that nevertheless has the attenuated benefit of two of its major arterials – Mountain Avenue and Foothill Blvd. – featuring relatively robust commercial uses. In terms of economics, it also bears a relative disadvantage in that its major arterial – Euclid Avenue – exists as one of the most resplendent residential venues regionally, indeed in the entire State of California, or the entire United States, Newport, Rhode Island, Palm Beach, Florida, Brentwood, Beverley Hills and San Marino notwithstanding. Thus, while boasting status as an upscale community, Upland’s municipal structure suffers because it lacks the intensified revenue stream available to less wealthy cities in which their major streets are devoted entirely to being sales tax-producing commercial districts. In this way, Upland’s financial situation is more delicate than many less affluent communities in San Bernardino County, such as Ontario, or Chino Hills, Rancho Cucamonga, or even Fontana or Victorville.
Consequently, Upland is constantly under the gun to make ends meet. The generous giveaways it made to its employees under Pomierski and Quincey have exacerbated the situation. A key position at Upland City Hall is thus the finance director. Indeed, the last full time city manager prior to Butler, Stephen Dunn, was elevated to the city manager’s post largely on the belief that the city would do better under someone who had a full dimensional understanding of the city’s fiscal circumstance than it would if it were guided by an outsider steeped in the principles of general municipal management. In this way, Scott Williams, who had previously served as the financial adviser for the Regional Governmental Services Authority in Napa and the finance director in Sonoma and as finance director in San Bernardino, was on the front line, as it were, in Upland’s struggle to survive as a municipal entity. A little more than three years before Williams’ arrival in Upland, an auditor’s opinion made in 2012 by the certified public accounting firm Mayer Hoffman stated there were serious questions with regard to Upland’s solvency to the point that in a short while “it will be unable to continue as a going concern.”
Williams considered it his first duty, as did others, to provide the city council, the city employees up the chain of command, the department heads abreast of him at City Hall, city employees at all levels and the general public with straightforward information relating to the city’s financial condition. His second duty, he felt, was to supply all of those entities with a panoply of options to assist the city in maintaining its solvency. Williams, whose hiring by Upland predated by more than three months the hiring of Vagnozzi, initially was able to perform those tasks essentially unfettered. He developed a rapport with all five members of the city council, despite their political differences, and had established within his first three months on the job a reputation as no-nonsense bean counter, who nevertheless embodied a degree of imagination in his make-up, and was seriously dedicated to keeping the lifeblood of municipal life, revenue, flowing in and in the proper proportions to the various city departments, no matter how parsimoniously it had to be doled out because of fiscal reality. Simultaneously, he was mindful of the importance of husbanding the city’s reserves and keeping them in interest-bearing accounts or lodged in investment instruments that would assure the city was not losing ground against inflation or permitting its holdings to stagnate. And he respected, as well, the legal restrictions a municipality such as Upland must function within, keeping funds earmarked for specific purposes sequestered and safe from being tapped into and used for unauthorized programs or operations.
One of the issues within his creative field was visualizing how current operations might be altered to derive some savings. Already undertaken in this regard were so-called outsourcings. In 2014 and 2015, the city moved to shed itself of its library and animal control divisions. Williams would suggest to top city officials that they seriously consider enlarging upon this concept. Reasoning that the city’s public safety division – the fire department and police department – accounted for 72 percent of city spending on salaries and benefits, he suggested serious contemplation be given to having the police and fire departments closed out and the county sheriff’s department being brought in to provide law enforcement services on a contractual basis and that the city look at having the county’s fire division or the California Division of Forestry assume firefighting and emergency medical service provision within the city limits.
In January 2016, the city council, acting on a concept first put forth by Jason Gaudy, a member of the Upland Fiscal Task Force that was formed in 2013 to analyze the city’s options for dealing with its financial challenges, passed the Upland Fiscal Responsibility Act. The Upland Fiscal Responsibility Act, which was passed unanimously by the city council, mandates that the city “base its operating capital on demonstrable sources of revenue.” Moreover, the act states, “The city shall maintain cash balances to adequately provide for economic uncertainties, local disasters or catastrophic events, and other financial hardships or downturns in the local or national economy or contingencies for unforeseen operational needs. The city shall retain, per policy, a minimum unassigned fund balance of at least 12.5 percent of general fund operating expenditures, with a goal of bringing the total level of reserves up to 25 percent.”
Simultaneously, Butler, who was working with Williams on constructing a city budget for 2016-17, had assigned Vagnozzi to carry out contract negotiations with the city’s firefighters through their union as part of the collective bargaining process. After some back and forth, Vagnozzi offered, and the union accepted, a contract enhancement that called for granting the firefighters substantial pay increases in accordance with their accrued experience, referred to as “steps.” Vagnozzi would report that this pay increase would represent a relatively minor added cost to the city of $50,000 or thereabouts per year. By mid-spring 2016 the contract negotiations with the firefighters union and work toward a budget had coalesced into a budgetary package proposal that was previewed – in stages – by the city’s finance committee, consisting of council members Debbie Stone and Glenn Bozar along with city treasurer Dan Morgan. Over the course of two meetings, planned expenditures and anticipated revenues were mapped out. Based upon the feedback from the committee, Butler, Vagnozzi and Williams presented a proposed budget to the committee at its last scheduled meeting in May, well ahead of the traditional June 30 deadline to have such budgets in place in accordance with the July 1 to June 30 governmental fiscal year.
The committee, led by Bozar, a proclaimed fiscal watchdog whose political trademark was his commitment to prevent the profligate spending of taxpayer dollars, rejected Butler’s proposed budget, taking issue in particular with the divergence of gas tax, which the city had traditionally used for road repair and street maintenance, into the general fund. Moreover, the committee objected to the proposal, layered into the budget, of raising salary and benefits of city workers by 10.02 percent and upping expenditures by 8.13 percent, and bemoaned that the proposed budget was overrunning the projected 0.47 percent sales tax growth and 6.3 percent property tax increase the city would experience. This, Bozar proclaimed, and both Stone and Morgan agreed, violated Upland’s Fiscal Responsibility Act.
Moreover, Bozar and Morgan were pushing for the budget to include an overt indication of the specter of future debt the city was accruing in the form of the city’s continuously growing pension costs. Bozar and Morgan focused in particular on the consideration that the pension fund the city participates in, the California Public Employees Retirement System, known by its acronym CalPERS, relies upon meeting a 7.5 percent earnings goal with its investments annually to remain solvent. When that earnings goal is not met, the governmental entities involved with it must make up the difference. Bozar noted that for three years running, CalPERS’ investment pool had badly underperformed, requiring Upland, like all other cities participating in it as well as the state government, to pull money away from its budget and fork it over.
During June, the committee and the council considered and reconsidered subtle reworkings of the budget made by Butler in conjunction with Williams and Vagnozzi. But again and again, Bozar took the lead in questioning facets of the spending plan, and the routine approval of the budget Butler hoped for stalled. Both Butler and Vagnozzi were resistant to the concept of eliminating or limiting staff compensation increases. On multiple occasions during public meetings, Bozar endeavored to peer behind the numbers presented in the budget, putting both Butler and Vagnozzi on the spot. In doing so, Bozar would engage in direct questioning of Williams, who had an absolute command of the numbers in the budget. Williams, in answering Bozar straightforwardly and truthfully, empowered Bozar in making his case that Butler and Vagnozzi would need to return to the drawing boards and make further cuts in individual department budgets. During such exchanges the tension in the room was palpable, and it was noteworthy that these represented one of the few times when the perpetual smile that inhabited Butler’s face while he was in the limelight disappeared, as he glowered at Williams while he was responding to Bozar.
While the balance of the council initially supported Bozar in his demands that the budget be adjusted, Butler, somewhat intransigently, refused to move the gas tax revenue out of the general fund. At the last city council meeting in June before the June 30/July 1 new fiscal year deadline, Bozar again importuned his council colleagues to delay approval of the budget. At that point, however, it appeared that Butler had succeeded in outwaiting Bozar. The four other council members – Stone, Gino Filippi, Carol Timm and Mayor Ray Musser – had lost their patience with Bozar’s budgetary fastidiousness. Tellingly, Stone would offer the sound bite that signaled the council was prepared to finally let Butler have his way on the budget. In a comment that was pointed at Bozar, Stone said, “I completely disagree with Glenn on this. I know you [Butler] are doing your due diligence to be up front. I don’t see why we have to be notified every time Rod wants to do something. We hired him as city manager. Let’s let him do his job.” The budget, as submitted by Butler, passed on a 4-1 vote, with Bozar dissenting.
Butler’s victory over Bozar, however, was a Pyrrhic one. As Bozar had suspected, and as his questioning of Williams in public had partially revealed, the budget was constructed on what might politely be referred to as “soft” numbers, that is, ones that were anywhere from slightly to grossly inaccurate. A case in point was Vagnozzi’s calculation that the raises provided to the city’s firefighters per her collective bargaining agreement with them would run the city an extra $50,000 per year. In actuality that $50,000 figure was applicable to only the last two months of that current fiscal year. In the first full fiscal year under the new contract terms, the actual cost would be $450,000. In the years beyond that, the per-year cost would escalate further, such that by the third full year, the three-year cost to the city would total at that point $1.8 million, and at five years run to approximately $2.5 million.
Williams, who had been put in the very uncomfortable position of having to decide between answering Bozar’s public questions truthfully or demonstrating loyalty to his superiors – Butler and Vagnozzi – by supporting their numbers, sensed, based upon the city council vote in favor of Butler and Vagnozzi’s budget, that he was in a very vulnerable position. Under Upland’s managerial system, the finance director, as do all department heads with the exception of the police chief, serves entirely at the pleasure of the city manager. Moreover, Vagnozzi, as the city’s human resources director, had extended, artificially, Williams’ probationary period with the city. Williams had hired on with Upland in March 2015 as a temporary employee. Normally, a new hire’s probationary period lasts a full calendar year, 365 days, during which time he or she can be terminated without any recourse. Under the standard course of things, as the one-year anniversary of hiring approaches, the employee is given a performance review and if such is satisfactory, the probationary period ends upon that anniversary date and the employee cannot be terminated without citation of cause. Vagnozzi, however, had not officially entered Williams as other than a temporary employee until November 2015, essentially six-and-one-half months after he had actually started with the city. At that time he was hired not as the finance director but as the finance manager, a subtle but nonetheless lower classification than finance director. By the summer of 2016, Vagnozzi and Butler had not yet undertaken Williams’ performance review, and thus the cessation of his probationary status had not taken place. At the drop of a hat, Butler could fire Williams for any reason whatsoever.
Looking over the numbers available to him from his perch in the finance department and examining the representations made to the city council by Vagnozzi and Butler with regard to the budget as well as employee contract negotiations, Williams detected that the figures provided to the city council during its consideration of the 2016-17 budget were inaccurate.
Within a fortnight, word had reached members of the city council that the numbers in the budget they had just passed were unreliable. Stone, in particular, expressed anger and frustration that she had been “lied to.” The primary focus of her anger was primarily with Butler and secondarily vectored toward Vagnozzi. In the backchannels of City Hall, something was up, while nevertheless occurring well below the public radar. The first indication that something was up came when the city council, which normally meets on the second and third Monday of each month in the evening, scheduled an extremely rare daytime special meeting set for July 27, a Wednesday, at 10:30 a.m. That morning, after holding a short public input session on the matter, which was problematic because at that point there was no official announcement with regard to which employee was being considered for termination, the council went into a closed session with city attorney Richard Adams. When the council emerged, Mayor Ray Musser designated Adams to brief the public on what had occurred. Adams then related that Butler had been terminated on a 3-2 vote, with Musser, Stone and councilman Gino Filippi supporting the action.
Since January and February 2015, when Stone and Filippi had given indication of their discontent with Butler, Bozar had been the only member of the council who had evinced any level of serious difference with Butler, primarily with regard to his more conservative attitude with regard to the budget. Indeed, all four of his council colleagues had, just a month before, sided with Butler over Bozar in regards to the budget. Ironically, Bozar and councilwoman Carol Timm were the dissenters in the move to cashier Butler. The council cited no cause in doing so, placing Butler on administrative leave through August 29, making his termination effective as of that date so that he would achieve his two-year service milestone with the city. The council further conferred on the departing city manager the nine months of salary from that date going forward due him under his contract. It was widely hinted that had Musser, Stone and Filippi been amenable to firing Butler with cause and thus withholding from him a severance, Bozar would have supported Butler’s termination.
Significantly, the council did not move to install Vagnozzi, who as the deputy city manager, would in most situations be the logical interim replacement for Butler. Instead, the city council directed, on a 4-1 vote with Bozar dissenting, that Martin Thouevenell, Upland’s former police chief who for a time was also acting fire chief and on two occasions stood in as interim city manager in the 1990s, be appointed interim city manager.
Unspoken at that point was that Jeanette Vagnozzi would be, after a brief but decent interval, out the door behind Butler.
Nevertheless, Vagnozzi remained in place, and for the week or so it took to hammer out a contract with Thouvenell relating to his interim city manager assignment, Vagnozzi served as the de facto city manager. This made Williams, who had already begun to feud with Vagnozzi over city finances, extremely nervous. In her capacity as acting city manager, Vagnozzi had the authority to terminate Williams. Williams took the extraordinary step of asking that the city attorney initiate an investigation into misrepresentations and fraud. In kick-starting the investigation, Williams proffered documentation and sat down with the lawyers and investigators for Jones Mayer, the law firm which employs Upland City Attorney Richard Adams, for a 65 minute interview. In addition, Williams vectored those attorneys and investigators to city employees who, he believed, would confirm his version of what was occurring.
Shortly after his arrival, Thouvenell did a size-up of the situation, as he was brought up to speed with regard to the state of the city. He would meet one-on-one with Musser, Stone, Timm and Bozar, hearing from them their concerns and vision for the direction the city should take. No such meeting with Filippi would be necessary, as Filippi and Thouvenell have long been close friends such that Thouvenell is considered by many to be Filippi’s primary adviser. Thouvenell would learn of Butler’s inveterate indecisiveness and review the myriad of issues that remained unresolved as a consequence of that. He also held similar brainstorming sessions or meetings with the city’s department heads. On August 11, Thouvenell held a three-way meeting with Williams and Dunn, seeking from them, as the two individuals with the most comprehensive understanding of the city’s finances, to get a better handle on the challenges facing Upland.
In addition to being directly tasked with running the city on an interim basis, Thouvenell was assigned to review candidates to permanently replace Butler.
During his several meetings with city officials, Thouvenell expressed his belief that the presence of Vagnozzi as Butler’s right-hand woman was a sign of administrative weakness, that she was an unnecessary vestige and that the next city manager should be one that would be able to function with complete autonomy and on his or her own authority. The implication was that Vagnozzi would soon be a permanent part of Upland history.
Within a very short time, however, Vagnozzi would be able to leverage her seemingly indefensible position to one of, if not strength, survivability.
During a series of meetings with Thouvenell, Williams more fully oriented the acting city manager with regard to the city’s financial circumstance. Thouvenell listened, relatively passively but intently, appearing to take it all in, asking occasional questions for further detail.
Williams was yet concerned that in the uncertain atmosphere of change at City Hall, his position was less than fully secure. Relatively early on, Williams confided this concern to Thouvenell, who reassured the younger man. Thouvenell himself needed guidance as to what the true lay of the land was. He needed financial numbers he could rely on if he were to do his own job competently. Williams, though he was floating in a sea of uncertainty himself, represented a solid Rock of Gibraltar when it came to reliable information about where the city actually stood, what it could afford to do and what was beyond its means, what qualified as unnecessary frills that should be dispensed with and what critical elements of the city’s function could be salvaged by the applications of judicious economies. Williams need not worry, Thouvenell told him. As long as Thouvenell remained as city manager, he said, Williams would remain as finance manager.
To Williams, Thouvenell seemed sincere, angling to not only fulfill the stopgap caretaker role that had been suddenly thrust on him but do what he could to enable whoever it was that would succeed him to make a go of righting the listing Upland ship of state and turn a corner on the seemingly interminable and ubiquitous financial challenges the City of Gracious Living was cursed with. And Williams was anxious to assist Thouvenell in that regard to the extent that he could.
It was at that point that Williams made a crucial move that would in one stroke seal his fate while rescuing Vagnozzi from what appeared to be certain perdition. To assist Thouvenell in mapping out the semblance of a strategy for Upland’s economic recovery, Williams returned to the economic scorecard he had been working on six, seven, eight, nine and ten months previously, the one pertaining to creative means of driving down municipal operational costs. Front and center on that scorecard were further outsourcings, in particular the fire and police departments.
When Williams broached the subject with Thouvenell, the older man did not blanch outwardly, though internally, no doubt, Williams had hit a nerve, indeed an incredibly sensitive one. As Williams ran the numbers by the interim city manager, showing that the city might reap a savings of [$2 million] yearly by surrendering fire protection responsibility to the county and upwards of [$4 million] by closing out the police department and contracting with the sheriff’s department, a major portion of Thouvenell’s life – three decades of it – reeled panoramically through his mind. For thirty years Thouvenell had been a policeman with Upland P.D., from the lowest level as a patrol officer right up the chain of command to becoming police chief.
To be sure, when Thouvenell’s tenure as police chief came to a close in 2005, it had not ended on the best of terms. Not quite five years before that, in November 2000, John Pomierski had been elected Upland mayor. For the first two years Pomierski held office, things went relatively smoothly. Sometime thereafter, however, issues manifested, gradually and somewhat vaguely at first, ones that initially might have been nothing or perhaps passing anomalies, slight aberrations, peculiarities with no deeper or dire meaning. But those anomalies persisted to the point where they were no longer anomalies but the norm, something that was real and recurrent. To Thouvenell, at that point a man with 27 years’ experience as a police officer, the signs were unmistakable. The mayor was on the take. Proof of the sort that could be used in a court of law was somewhat elusive, at least at that point. Those being shaken down, or extorted or paying the bribes, willingly or not, had much to lose and would be in no frame of mind to implicate someone of Pomierski’s stature, the mayor and a major pillar of the community. And Pomierski, while brazen in certain ways, was cautious in others.
Thouvenell was caught in the classic dilemma of a power struggle in the public arena: If he were to strike the king, he must kill the king. If the blow he wielded fell short and he merely wounded Pomierski or simply irritated him and he yet held the scepter in his hand, Pomierski would wield the power of that scepter against Thouvenell, and it would be Thouvenell who would be struck down. And so, Thouvenell tarried.
Along the way, Upland’s then-city manager, Mike Milhiser, was seeing some of the same things that had come to Thouvenell’s attention. The city manager and the police chief traded notes. One reassured the other that what they were perceiving was real. To an extent, they were able to hold Pomierski in partial, but not total check, curtailing the degree to which the mayor’s avarice was in play but not actually stopping it. Neither was in a position, on his own, to effectively bring Pomierski to heel and, for whatever reasons, they never formulated a concerted strategy to do so. Time was passing and as Thouvenell and Milhiser temporized, Pomierski grew stronger. In 2004, he would run for reelection. He did so as an incumbent and from a position of strength. Just like he had illegally and covertly shaken down developers and businessmen with projects subject to city approval, as a candidate for reelection he could legally shake down business and development interests for campaign contributions. In the election, he vanquished his challenger, Ray Musser.
He emerged from that election stronger than ever, with the solid backing of the three other members on the council excluding Musser and the endorsement of the district attorney and the sheriff. If ever Thouvenell and Milhiser could have combined forces to effectively challenge the corrupt mayor, let alone fell him, that time had passed. Pomierski bestrode Upland as some kind of political colossus. In March 2005, with Pomierski marshaling his political might in the form of the support he had from councilmen Tom Thomas, Ken Willis and Brendan Brandt, Milhiser was persuaded to leave without a fight, and Pomierski had the council confer on the departing city manager a $200,000 severance, effectively buying his silence. Within three weeks of Milhiser’s departure, Thouvenell likewise elected to retire.
At some point, Thouvenell would contact the FBI, informing them of his suspicions with regard to Pomierski. Ultimately, the FBI would move on that information, but in a deliberate and excruciatingly slow fashion. In June 2010, more than five years after Milhiser’s and Thouvenell’s departures, the FBI would carry out a raid at Upland City Hall as well as at Pomierki’s home and the homes and business offices of a number of his associates involved with him in securing and laundering bribes. Eight months later, at the end of February 2011, Pomierski would resign as mayor and the following week, in March 2011, he was named in a federal indictment, against which he initially maintained his innocence. Ultimately, in April 2012, he entered a guilty plea to those charges and was given a 24 month sentence.
But in 2005, after the departure of Milhiser and Thouvenell, Pomierski was at liberty, and would remain so for five years, to escalate his depredations. He did so by prevailing upon the three members of the council he controlled to hire his handpicked replacement for Milhiser, Robb Quincey. And Pomierski induced the police department to willingly subjugate itself to his will. He did so by getting the city council to consent to giving Quincey the same contract enhancements that the police department’s employees would get and then further consenting to having Quincey carry out the negotiations with the police union during the collective bargaining process. Since Quincey stood to benefit by the same degree in whatever he provided to the police officers, he proved a soft touch during those negotiations. In this way, Pomierski corrupted the entirety of the post-Thouvenell police department. Since Pomierski was their ultimate benefactor in this arrangement, Upland’s policemen, individually and collectively, from beat cops right up to the chief of police, were in no hurry to investigate Pomierski, let alone go to the effort to actually bring him to justice. By 2008, it was a rare applicant for project approval in Upland who was not in some fashion paying tribute – i.e., bribes – to Pomierski.
In collecting this tribute, Pomierski was in some cases crude and in others more sophisticated. He owned his own construction company – J.P. Construction. One way of ensuring one’s project would be approved was to hire him to do some phase of the project. Another was to hire one of his partners in the “consulting” business – Anthony Orlando Sanchez or Jason Crebs – to assist in presenting the project proposal to the city’s planning division. Pomierski occasionally used one of his associates – John Hennes, the owner of JH Builders who was one of Pomierski’s appointees to the Upland Building Board of Appeals – to collect the money for him. In still others, Pomierski accepted the cash directly himself. The graft was becoming woefully obvious. Yet the Upland Police Officers Association, the union representing Upland’s finest, endorsed Pomierski for reelection in 2008. He handily won that contest, once again against Musser, this time by an even wider margin than in 2004.
Painfully, Thouvenell knew all, or most, of this. He lived through it and could not ignore it, as he was himself an Upland resident. Both of the police chiefs who succeeded him and who had served under him and whom he had personally groomed – Steve Adams and Jeff Mendenhall – were the immediate beneficiaries of the largesse conferred upon them by Pomierski and Quincey. Both would see the per-year multiplier in their pensions increased to 2.5 percent from the 2 percent he himself received, compliments of Pomierski and Quincey. Though he might not articulate it, and though he might not even admit it to himself, at some level Thouvenell knew, in his heart, that the Upland Police Department, after his departure, had been compromised. The members of the department had laid down for Pomierski and Quincey. It was undeniable. The proof was that when at last events overtook Pomierski and Upland’s crooked mayor found himself between the Wheels of Justice, it was the FBI turning those wheels and not the Upland Police Department, under whose jurisdiction those crimes were being committed.
When this summer Scott Williams earnestly laid out for him the option of shuttering the police department and the fire department as a means of saving the City of Upland up to $5 million on the law enforcement component and $2 million on the fire/emergency services side for a total of $7 million per year, whatever lingering bitterness Thouvenell might have felt over the fashion in which he had been forced to prematurely relinquish the job as police chief he loved and the failure of the police chiefs that inherited that position from him to live up to the principles he had abided by were overwhelmed by another factor: his love and loyalty to the department above all else. Flawed as it was, the department was a continuing element of his personal legacy. It would outlast him and his time on this Earth. He would not participate in its demise.
He did not say as much to Williams. He merely took from Williams what he had offered, hardly batting an eyelash.
Meanwhile, down the corridor at City Hall, Vagnozzi could not have been unaware of the sword of Damocles hanging over her head. She yet had her job, but barely and by the grace of a collection of factors, some of which she understood and others which she did not. What she understood was that Butler’s demise was a likely precursor to her own. She also recognized what had undone Butler and her own participation in it. Butler had been unwilling to seize the day, when there was still daylight. His inability to be harsh and blunt, to articulate to the city’s remaining employees that they and their predecessors had long been the beneficiaries of corrupt generosity and that their expectation and sense of entitlement to that generosity on the taxpayers’ part was going to have to end, contributed further to the expectation and culture of entitlement that continues to grip City Hall. Rather than serving as Butler’s backbone, truly being his hatchet-woman and informing Upland’s municipal employees that they had ridden the gravy train for too long and that with the city teetering on the financial abyss it was now time for them to give back rather than demand more and if not to hit the road, Vagnozzi instead offered them more. And after she offered them more, she participated with Butler in hiding that from the city council. Her head was on the chopping block.
But Vagnozzi is a brilliant political infighter, with the guts of a cat burglar. She did not panic. Calmly, she evaluated the situation.
At that moment she was safe because to fire her in one purge at the same time as, or sharply on the heels of, Butler’s firing would create an ugly scene and more questions than the city council was at that point prepared to answer. Moreover, she knew, the city would be averse to jettisoning all of its top level institutional memory at once. And the council, after having gone awry twice in the last eleven years by hiring an outsider as city manager as opposed to hiring from within – witness the cases of Quincey and Butler – was as likely as not to select a current city department head to replace Butler. She surveyed the competition: police chief Brian Johnson, public works director Rosemary Horning, community development director Jeff Zwack, community services director Roberta Knighten, fire chief Paul Segalla and finance director Scott Williams. Segalla had the least time in the city and for other reasons, including that he was at that point yet committed to overseeing operations in Montclair as part of a shared fire administration/management agreement with that city, was not a likely candidate. Knighten, Horning and Zwack had the longest tenures of the six with city. Horning and Zwack had sufficient experience in budgeting and administration, sufficient educational credentials and enough technical understanding of their own lines of expertise to make a stab at running the city. Johnson was less familiar with Upland, having come into town from the Los Angeles Police Department in 2014. His commitment to being a law enforcement professional made the prospect of his transferring into the top tier of city management a stretch. Williams, with his command of the field in which the city faces its most critical problems, made him an attractive candidate for the position. Moreover, he possessed the academic credentials – a bachelor of arts degree in business from Business Master’s University, an MBA in business administration from California State University at Monterey Bay and the completion of the first year of course work toward his doctorate in public administration with American Baptist University – and he has ambition of moving into the upper echelons of public agency management.
While she remained at City Hall, Vagnozzi was not without resources. Her position overseeing the city’s human resources division gave her access to a comprehensive degree of information pertaining to all city employees, that is, the city’s personnel files, including each individual employee’s application, resumé, health insurance applications, letters of recommendation, performance evaluations, as well as discipline jackets containing corrective action notices, notations of procedural violations and any negative performance or incident write-ups from superiors.
Within the next month, information lifted directly out of Williams’ personnel file was being bruited about City Hall and had reached the ears of the council, specifically that relating to his own personal finances. The damage was immediate and the implication clear: the person at the forefront of overseeing and managing the city’s finances had a round of difficulty with his own financial affairs. The impact was that Williams’ status within the Upland organization was lowered and any prospect that he would be considered for the city manager’s post ended.
Out of the blue, Segalla was placed on administrative leave in August. Officially, in Upland, the response to questions of what Segalla had done to merit being relieved of command was that some unspecified complaint had come in from Montclair about his action or performance. Since 2014, Upland and Montclair had merged their administrative/managerial functions, while maintaining their own respective fire stations and both cities considered the possibility of merging the totality of their fire operations in the future. Thus, Segalla was serving as the fire chief for both Upland and Montclair. When reached by the Sentinel, however, Montclair City Manager Ed Starr said the issues relating to Segalla’s suspension emanated from Upland.
In September, Community Services Director Roberta Knighten, who began with Upland in April 1999 as management analyst in the public works department and was reassigned to the city’s recreation division in November 2002 and then moved up the ladder to become community services director in 2011, overseeing the animal shelter, library and recreation division at a base annual salary of $160,838 annual salary plus $76,029 in benefits for a total compensation package of $236,867, was thanked for her 17 years of service to the city, provided with a plaque and certificate of recognition, honored with a dinner and shown the door. Calling it a cost cutting move, Thouvenell said the position of community services director had been eliminated, since the city’s library and animal services divisions had already been outsourced.
With minimal fanfare and without first informing Montclair that it was doing so, Upland at its last city council meeting in September unilaterally terminated its joint powers arrangement for shared management and administration of their fire departments, citing the underperformance of the program in saving the city money.
On October 17, just days before his probationary period which had been atypically increased from 12 months to 18 months was set to expire, Williams interacted with Thouvenell. During their exchange, Thouvenell engaged with Williams with regard to the city’s financial concerns, seemingly as if all was well. Some two hours later, Williams was summoned by Vagnozzi into the office of the human services manager and ignominiously handed a pink slip.
Last Wednesday, just prior to Thanksgiving, the city in publishing its agenda for the Monday November 28 city council meeting announced that it would be taking the first step toward outsourcing the city’s fire department. Coming as it did, just prior to the Thanksgiving Holiday, much of the community missed the announcement. Others were caught flatfooted. At the meeting, Kathleen Rollings-McDonald, the executive director of the San Bernardino County Local Agency Formation Commission, and San Bernardino County Fire Chief Mark Hartwig were on hand to familiarize the council with the process of transitioning to county service and how the county fire department intended to carry out the assignment once the transition was effectuated. The arrangement with the county would not involve a contract, Vagnozzi said, but entail the entire city annexing into a county fire agency district, such that all property owners would be assessed $148 per year to help defray the cost of fire and emergency medical service provision. Ultimately, the council voted to initiate that annexation process.
Earlier in the evening, during her presentation of the city’s proposed financial stability plan, which was also approved by the city council upon Thouvenell’s and Vagnozzi’s recommendation, Vagnozzi said that staff had examined the options of outsourcing both the fire service and police service. While the outsourcing of the fire service would deliver the city savings, Vagnozzi said, there would be no savings from dissolving the police department and contracting with the sheriff’s office.
“This would actually be more expensive than what we are currently paying,” Vagnozzi said.
Absent from the meeting were Segalla, who might have provided the city council with a description of how the city’s current firefighting operations match up against the service to be provided by the county, and Williams, whose extensive research and numbers crunching with regard to the city adopting the sheriff’s department as its law enforcement service provider indicated the city would achieve substantial monetary savings approaching $5 million a year by such a move.
This week, Williams told the Sentinel that Vagnozzi’s report with regard to outsourcing concluding that the delivery of law enforcement services by the sheriff’s department would cost the city more money versus continuing to rely on the city police department was “intellectually dishonest. Jeannette provided the council with selective information to reach a preconceived conclusion. Given a true side by side comparison of the costs of law enforcement activity in Upland it is clear using the sheriff’s department would result in substantial savings, even with the debt service of Upland’s current unfunded liability.”
Moreover, Williams said, “The future increases in the cost of keeping the police department in-house will rise much more sharply than the five percent annual increase that would come with the sheriff’s contract.”
Williams said that it was his perception that a “bureaucratic symbiosis” has developed between Thouvenell and Vagnozzi over the last two months that has resulted in Vagnozzi having overcome the very real threat of termination she faced at the time of Butler’s firing.
Butler, who has recently been hired by the City of Port Hueneme to serve as city manager there, could not be reached at his Rancho Cucamonga home. Nor did he answer or return phone calls placed to his phone there or his other known phone numbers.
Early this week, Vagnozzi told the Sentinel that the suggestion that she or her action played a role in Butler’s forced exodus from Upland was absolutely incorrect. “I was begging them to not fire him,” she said.
After Vagnozzi was provided with an early draft of this article so that she could provide cogent response to its content and offer input for inclusion in the finalized version, she said, “So much in here borders on slander and libel, I would not want to participate in it. I cannot comment.”
Thouvenell, who was provided with the same early draft, was similarly scathing in his assessment of the way events had been recounted in the narrative. “What you have written is skewed and inaccurate,” he said. “You are just printing what other people are telling you. What you are doing isn’t right, so I don’t want to participate. I have no comment.”
Ray Musser, the current mayor who was on the council from 1998 until 2011, was the only political opposition to Pomierski among Upland’s elected officials during Pomierski’s time in office and succeeded him as mayor, chose not to seek reelection this year and will leave office this month.
He said of Vagnozzi, “She tried to please her boss. She did that under Rod Butler and now she is doing that with Marty [Thouvenell.]”
Musser said, “Scott [Williams] was a threat to Jeannette. That is pretty clear. But that chapter is over.”
Musser said he is leaving office, but that he believes the city is in the process of altering the lines of authority to prevent the contretemps that occurred involving Butler, Vagnozzi and Williams. “Once they get an actual permanent city manager, the finance director should report directly to that city manager and not through Jeannette or whoever is the deputy city manager,” Musser said. “At least, that’s how I hope they will set it up.”