SB To Cite City Manager’s Toleration Of Conflict Of Interest In Her Firing

City Manager Andrea Travis-Miller utilized former County Chief Executive Officer Greg Devereuax, who was serving in the capacity of the City of San Bernardino’s management consultant, to assist her in negotiating a legal settlement with the East Valley Water District in 2017, despite the consideration that Devereaux was also working for the water district. A majority of the San Bernardino City Council is intent on citing Miller’s toleration and encouragement of that conflict of interest as the grounds for her termination, the Sentinel has learned.
By firing Travis-Miller for cause, the city will avoid having to pay her the $430,000 she would otherwise have to be paid as a severance under the three-year contract she was provided with when she was hired in August 2017.
At the time of Travis-Miller’s hiring, the council lavishly praised her managerial talent, which was based in a certain measure on her having served in the capacity of San Bernardino’s assistant city manager just prior to that hiring, a stint as Covina’s city manager in 2015 and 2016, more than two years as the executive director of the San Gabriel Valley Council of Governments that began in 2013, and seven years as La Mirada city manager from 2001 to 2008. Perhaps most important in the council’s decision to hire her was that she had gone to work for San Bernardino in 2011 as an assistant to then-city manager Charles McNeeley, who in the face of significant and overwhelming financial challenges to the city, in April 2012 resigned. At that point, Travis-Miller was elevated to the position of acting city manager. In tandem with then-finance director Jason Simpson, Travis-Miller made a review of the city’s financial books, the conclusions of which were so startling that the city council in July 2012 resolved to file for Chapter 9 bankruptcy protection on the basis of a 45-page report from Travis-Miller recommending the city do just that. The city did so the following month. Travis-Miller gamely soldiered on as acting city manager, disregarding the negative associations that attended her continuing association with a city in bankruptcy. Travis Miller’s standing as a law school graduate, a member of the California Bar and her practice with the law firm of Manning & Kass, Ellrod, Ramirez, Trestor from 2008 until 2011 also stood her in good stead with the council, members of which indicated they believed Travis-Miller had the breadth and depth of experience to handle the city’s top managerial assignment on her own.
Less than two month later, however, Travis-Miller requested and the council granted her permission 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, “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.
Travis-Miller said she calculated that Devereaux would make “hourly $100 to $120 for about 20 to 25 hours of work per week.”
Devereaux’s hiring raised with many individuals immediate red flags. Her declared need for top-flight managerial assistance to get her arms around the 215,000-population city’s intractable problems was an acknowledgment that the celebration of her managerial expertise at the time of her hiring was a bit overblown. Moreover, Travis-Miller’s stated expectation that Devereaux would be available to devote as much as 20 hours a week to San Bernardino was absolutely unrealistic, given that he at that point had a commitment to remain as a management consultant with the County of San Bernardino through early 2020 for which he was to be paid $91,000 per year, had a consultancy contract with the Ontario International Airport Authority for which he was being paid $240,000 annually, had a consultancy contract with the East Valley Water District, for which he was being paid $120,000 per year, and consulting contracts with at least three other entities at that point.
In April 2016, which was prior to Miller being hired as assistant city manager as well as Devereaux’s departure as San Bernardino County’s chief executive officer, 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 relating 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 by inspecting and ratifying the environmental documents for the undertaking that had to be filed in compliance with the California Environmental Quality Act.
Historically and currently, under a joint powers authority formed in 1958, untreated wastewater originating within the jurisdiction of the Highland-based East Valley Water District has been and is 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 is then discharged into the Santa Ana River.
San Bernardino alleged there was no comprehensive cost analysis and total price tag for the Sterling project and the true cost, including the escalation of local water rates, and 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 the 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. The two entities in a joint statement called the lawsuit “politically motivated” and expressed “full confidence in our plan and a vision for the Sterling Natural Resource Center.”
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 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.
Travis Miller, however, turned to Devereaux to assist her in the negotiations with East Valley Water District. Either ignoring the consideration that Devereaux was also working for East Valley or perhaps hoping that he would use his influence with East Valley to craft a settlement that was favorable to the city, Devereaux drove the settlement negotiations toward an outcome that included East Valley simply being able to walk away from the 1958 joint powers agreement and no longer be required to use San Bernadino’s water reclamation services. San Bernardino would simply accept the loss of the $4 million in revenue it previously previously realized in the contractual deal with East Valley, but would be in some measure recompensed by 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. Under the deal, the San Bernardino Valley Water District agreed to deliver 3,000 acre-feet of state water project water annually to San Bernardino for a period of 10 years, which is 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. That property is hamstrung by contamination issues relating to fuel, solvent and other chemical spillages near the property while it was in use as an Army Air Corps and later Air Force base.
San Bernardino is to pay East Valley $8 million that the city over the years has 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.
Over the last year of former Mayor Carey Davis’s tenure, a degree of dissatisfaction with Travis-Miller’s performance as city manager had developed on the council, though the level of discontent never reached anything approaching the needed four votes among the council’s seven members to put her job in jeopardy. With the November 2018 election, Valdivia displaced Davis and two of Valdivia’s allies – his cousin Ted Sanchez in Ward One and Sandra Ibarra in Ward Two – acceded to the council. While as mayor Valdivia has no direct vote, he can break ties or veto items that are passed by a three-to-two or four-to-three margin. Valdivia, when he was yet serving on the council in Ward Three, had gravitated toward a dislike of Travis-Miller. As mayor he is now gunning to oust her. With the support of Ibarra, Sanchez and Valdivia’s other council ally, Councilwoman Bessine Richard, placing Travis-Miller on administrative leave was effectuated last month when Valdivia voted to break a tie over the issue after councilmen Henry Nickel, Jim Mulvihill and Fred Shorett voted in closed session to keep Travis-Miller in place.
The current council is one member short, as Valdivia’s vacancy in Ward Three has not been filled. Valdivia’s ally, Juan Figueroa, has outspent his opponent, treasure Ortiz, in the mail-in ballot race, which is to conclude on May 7, to choose Valdivia’s Third Ward replacement. If Figueroa prevails, four solid votes to cashier Travis-Miller will be in place. The only issue is that she will be due another 15 months of her salary and benefits if she is set free before her contract expires in August 2020. The only way that payout can be avoided if she is fired is to make her departure one that was done for a stated reason.
Accordingly, the council contingent Valdivia heads has refocused its attention to something observers had picked up on in December 2017, when the settlement with the East Valley Water District was forged. While Travis-Miller’s insisted at the time “We need to get along with people who are our neighbors,” there was the perception that the settlement was in no way a good deal for the City of San Bernardino. Through the litigation, San Bernardino had already raised issues that convinced the state to begin withdrawing funding for the Sterling project, including a $15 million water recycling grant. San Bernardino, with its existing water treatment facility in place and the joint powers authority mandate, possessed leverage the water district simply did not. That Travis-Miller allowed Devereaux, whose loyalty to San Bernardino was compromised by his contractual relationship with East Valley, to take part in the negotiations now forms the basis for terminating Travis-Miller with cause, the Valdivia-aligned contingent on the council believes.
-Mark Gutgueck

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