The day before the Upland City Council placed City Manager Rosemary Hoerning on paid administrative leave, she advanced Development Services Director Robert Dalquest by six pay grades, conferring on him a raise of more than $30,000 per year, documentation obtained by the Sentinel indicates. That advancement in Dalquest’s remuneration raised his salary before benefits by $32,876.03 from roughly $137,711.65 annually to approximately $170,587.68.
That action was taken without authorization by the city council, the Sentinel is informed, and came shortly after Hoerning learned that the council was inching toward suspending her as city manager, preparatory toward her termination.
Dalquest is one of the five members of the city’s executive management echelon, which includes the city manager, assistant city manager, chief of police, development services director and public works director/city engineer.
In Upland the executive management team is distinct from the city’s body of 37 mid-managers.
Hoerning was elevated to the interim city manager’s post in May 2019 upon the city’s termination of her predecessor, Jeannette Vagnozzi.
During the first several months that Hoerning was serving in the assistant city manager’s capacity, then-Upland Treasurer Larry Kinley, determined to shed light on what he considered to be a looming financial crisis brought on by the city’s runaway pension debt he believed was threatening the city with eventual bankruptcy, insisted on including in the monthly treasurer’s report provided to the city council and the public a running tally of how much in arrears the city was on making payments to the California Public Employees Retirement System. This figure, referred to by the term “unfunded pension liability” had grown to more than $112,039,675 as of mid-fiscal year 2019-20 and would reach $120,920,721 as of June 30, 2020. Hoerning and the city’s finance manager, Londa Bock-Helms, repeatedly altered the treasurer’s reports after Kinley had signed them, erasing, whiting out or removing the references he made to the unfunded pension liability. When Kinley refused to comply with Hoerning’s and Bock-Helm’s insistence that the pension debt references not be included in the treasurer’s reports, they changed the name of the treasurer’s report to the treasury report and bypassed Kinley in producing it, thereby keeping information about the city’s burgeoning pension debt from reaching the city council or the public.
In February 2020, Hoerning was promoted to the status of full-fledged city manager, and the qualifier “interim” was dropped from her title. That action was taken, pending the forging of a contractual commitment on her salary that was mutually acceptable to her and the council. When the council at last took on the issue of settling her rate of remuneration, it did so in a way that created a festering vortex that sent Hoerning into a wicked tailspin some three months later, one from which she did not fully recover.
At issue at that time was that Police Chief Darren Goodman had in late 2019 applied for the position of police chief in Riverside. Ultimately, Riverside in January 2020 had elected to promote to police chief then-Deputy Chief Larry Gonzalez, who had already been serving in the capacity of acting Riverside police chief following the exit of his predecessor. Nevertheless, talk persisted that Gonzalez would fill the deputy chief’s position he had vacated with Goodman, and that Goodman would make the move to Riverside, which is significantly more proximate to where he resides than Upland. At that time Goodman was receiving $184,000 in salary, other allowances of $118,500 and $60,735 in benefits for a total annual compensation of $363,235. In order to keep Goodman in place as police chief, the Upland City Council augmented that with a $66,000 salary enhancement, boosting his total compensation package to $429,235. In this way, Goodman was receiving an annual salary, before benefits and add-on pay, of $250,000, one quarter of a million dollars, or $20,833.33 per month.
Between February and the end of March of 2020, Hoerning had huddled with then-City Attorney Steven Flower. They came up with a formula that was to provide her with a monthly salary of $19,167.67, equivalent to an annual salary of $230,012.04. On top of that, she was to receive $50,683.48 or thereabouts in benefits and other pay of $39,231.39, for a total compensation package of $319,926.91.
For managerial purists, this presented a dilemma, since on the City of Upland’s organizational chart, as is the case in virtually every other municipality in the United States, a city manager is considered to be the police chief’s superior. Through the creation of a circumstance in which Goodman was being provided with higher pay than Hoerning, who was technically Goodman’s boss, the city’s line of authority had been compromised. Councilwoman Janice Elliott at the time had attempted to have the city council examine and redress that issue before ratifying Hoerning’s employment contract as city manager, but the remainder of the city council as it was then composed did not indulge her in that. As a result, Hoerning had an annual salary that was $19,987.96 less than Goodman’s and her total annual compensation was $109,308.09 below that provided to the police chief.
In June 2020, Luz Barrett, a clerical employee in the police department with a fluency in the Spanish language, lodged a complaint against Goodman. Barrett contended that Goodman had her assist him in his efforts to communicate with his family’s Spanish-speaking housekeeper, and that she had carried out that assignment while being paid by the city, what was characterized as a misappropriation of city funds and resources. Consulting only with then-Mayor Debbie Stone, Hoerning on June 22, 2020 suspended Goodman as police chief without consulting with the remainder of the city council before doing so.
In relatively short order, Goodman marshaled evidence to demonstrate Barrett had forged the timecard she said supported her accusation, and Goodman further pointed out that shortly after his hiring as police chief in July 2018 he had promoted Barrett to the position of executive assistant, but in the spring of 2020 had returned her to her former lower clerical classification based upon his conclusion that she lacked the necessary skills to fulfill the executive assistant role. In the face of substantial resident protest over the treatment Goodman had received, on June 29, 2020, Hoerning at the direction of Councilman Rudy Zuniga, Councilwoman Elliott and then-Councilman Bill Velto reinstated Goodman.
According to Goodman’s Lawyer, Stephen Larson, Goodman as late as September and October of last year was experiencing interference in doing his job and shabby treatment from Hoerning.
In November 2020, the San Bernardino County Civil Grand Jury, with which City Treasurer Kinley had filed a complaint, provided a report of its inquiry into the effort by city staff to muzzle Kinley in his role as elected treasurer. According to the grand jury, city officials had obstructed Kinley in his effort to fulfill his role as city treasurer, and had hidden information relating to the financial burden municipal employee pension debt was placing on the city. While noting that it had “found that most actions mentioned in this report may not violate the law,” the civil grand jury in its report stated, “The San Bernardino County Civil Grand Jury is aware that there potentially may be criminal activity associated with these actions that are not within the jurisdiction of the civil grand jury. The civil grand jury does, however, view these practices as deceptive. These actions also demonstrate a lack of proper government practices and transparency to the citizens of Upland.”
The potential criminality referenced in the grand jury report was the alteration of public documents, which is a felony. No criminal grand jury took up that matter.
The civil grand jury recommended that “The Upland City Council investigate and make public, at an open public city council meeting and on the Upland city webpage, how city staff covered up the notation of unfunded pension liability made by the city treasurer on the monthly treasury report [and] make public, at an open public city council meeting and on the Upland city webpage, what disciplinary action was taken addressing the alteration of the treasury report after it was signed by the city treasurer.”
There has been among some of Upland’s residents discontent with Hoerning’s performance. One of those disenchanted with Hoerning is former City Councilman Glenn Bozar. Another critic was the former leader of the Coalition of Upland Concerned Citizens, Steve Bierbaum. Lisa Nicely, a resident who from time to time weighs in on local issues, has found fault with Hoerning’s guidance and management of the city, as has Lois Sicking Dieter, a candidate in last year’s mayoral election.
Until very recently, in general over the course of her tenure as city manager, Hoerning has been well favored by the city council. Former Mayor Debbie Stone, Councilman Rudy Zuniga and current Mayor and former Councilman Bill Velto have in particular spoken highly of Hoerning and have been laudatory of the job she has done. Councilwoman Janice Elliott defended her in the face of criticism of the fashion in which she and Bock-Helms had treated Kinley.
In November 2020, however, the city’s voters displaced Stone as mayor in favor of Velto, and two new members of the council were elected, Shannan Maust in the city’s First District and Carlos Garcia in the Third District. While neither Maust nor Garcia have been directly publicly critical of Hoerning, both have taken issue with certain of the city’s policies and its direction while Hoerning has held the top staff position. The presence of Maust and Garcia on the council, at least initially, did not represent or seem to represent any threat to Hoerning’s continuation in the position of Upland’s top staff member.
In recent days, however, there was a major and sudden shift against Hoerning on the council. She appeared to be riding high, or relatively so, in February when the city discontinued its arrangement with the law firm of Richards Watson & Gershon to serve as its legal advisor and retain the law firm of Best Best & Krieger, a change which saw Steven Deitsch replace Steven Flower as city attorney.
The city has been embattled, in particular over the last year, with regard to land use decisions.
In April 2020, the city council as it was then composed gave a 4-to-1 go-ahead to Bridge Development Partner’s planned 201,096-square foot warehouse on 50 acres on the west side of the city north of Foothill Boulevard and south of Cable Airport intended to house a delivery facility for on-line retailer Amazon. That same month, the city council gave another 4-to-1 nod to Frontier Homes’ proposed residential development on property previously intended for use as a flood control facility north of 15th Street on the east end of the city. With each of those votes, Councilwoman Elliott was the dissenter. Amid accusations of impropriety, favoritism and graft pertaining to those decisions, lawsuits were filed against the city by residents over both of those projects, putting those undertakings on hold and entailing legal costs for the city.
In November and December 2020, city staff sought to insulate the city council from citizen antipathy by designating the city’s planning commission to serve as the decision-making body with regard to another warehouse proposal on the city’s west side promoted by Yellow Iron Development. In that case, the planning commission balked at giving that project approval, even though the zoning on the property in question – light industrial – was consistent with use as a warehouse. A majority of the commission felt that a warehouse at that location was incompatible with neighboring residences. That decision may have staved off another lawsuit from the residents in the neighboring residential subdivision, but it also left the city, already involved in 55 lawsuits – vulnerable to legal action by Yellow Iron Development, the proponent of the proposed warehouse.
In February, the city administration again allowed the planning commission to make the final decision with regard to allowing a 192 total dwelling unit residential project to be built immediately proximate to an existing medium intensity industrial facility, one that manufactures boats using processes that involve the use of fiberglass, epoxies and other chemicals and materials that present certain health risks to those in close proximity to the operation.
All of these land use decisions were overseen at the staff level by Development Services Director Robert Dalquest, who has come in for substantial criticism over his indulgence of the development community in circumstances which entail the placement of what some deem to be incompatible land uses next to residential communities. There was considerable chatter late last year suggesting that Dalquest’s continued tenure with the city was in jeopardy. Word on the street was that the council’s alarm, insofar as such alarm could be said to exist, was in reaction to Dalquest’s performance rather than Hoerning’s. Dalquest, however, has survived.
Indeed, given that Hoerning has been for at least ten months on the outs with Police Chief Goodman, Dalquest, with the possible exception of Assistant City Manager Steven Parker, has been the one member of the city’s executive management suite most closely aligned and supportive of Hoerning.
From an outside perspective, the move toward sacking Hoerning did not manifest until shortly prior to the council’s action, taken in a specially-called meeting on Wednesday night, March 31. It would appear that the action took Hoerning almost as much by surprise as it did the public. The public announcement of the meeting came the day before, on March 30, in this case a mere 24 hours ahead of the meeting commencement. California law requires that agendas for regular governing board meetings, such as those for a city council, be published in full 72 hours ahead of the meeting taking place. As Wednesday’s meeting was called as an “urgency” or “emergency” meeting, the required warning to the public needed to be made only 24 hours in advance.
Hoerning, of course, as the honcho at City Hall, was immediately aware of what was coming. The wording of the agenda put out by the city clerk, stating “Closed session public employee performance evaluation and consideration of dismissal and related actions pursuant to Government Code Section 54957 Title: City Manager,” left little room for Hoerning to avoid the obvious conclusion that her head was on the chopping block. Before she left City Hall that night, she had a document prepared by staff which pertained to Dalquest. That document, titled “City of Upland Employment Agreement Amendment,” without elaboration states that an alteration of the terms and conditions of the previous employment contract the city had with Dalquest had been “agreed upon.” Its terseness indicates the document was drawn up in a rush. In the recital section, again without elaboration or explanation, the document states, “The city desires to amend the employment agreement to provide employee with annual salary increases within the assigned salary range for the development services position.” Using the preexisting employment contract with Dalquest as a jumping off position, the document denotes, “The annual salary for the position of development services director shall be assigned to Range 3243 of the city’s salary scale or $127,097.57 – $179,932.28 annually, with employee’s current salary set at step 7 of Range 3243.”
Because of the secrecy the city maintains with regard to its pay scale and its gradations, known as “steps,” and city employees’ specific pay grades, Dalquest’s pay rate as of the beginning of this week is not publicly known. Nevertheless, there are grounds to believe that Dalquest had progressed to the second step of the eight-step range for Upland’s development services director, based upon his February 4, 2019 hiring date. Thus, with two annual two percent cost of living adjustments and his advancement of a single step of the eight steps between $127,097.57 and $179,932.28 equal to 5,479.338, it would appear that Dalquest was, prior to the drafting and signing of the employing agreement amendment, provided with an annual salary of $137,711.65. Without consulting with the city council first and by the flourish of a pen, Hoerning jumped Dalquest six steps up the pay scale, or $32,876.03, to $170,587.68.
“This amendment shall become effective on March 15, 2021,” the document states, signifying essentially that the agreement went into effect 15 days previously. The document was signed by both Hoerning and Dalquest, with the date of March 30, 2021 affixed next to those signatures.
It is unknown at this point whether any other employment agreement amendments for other city employees were signed by Hoerning during the last two days – March 30 and March 31 – she was in charge at City Hall.
A question now is what the city council is going to do about what Hoerning did.
According to her employment agreement, Hoerning can be terminated for cause if it can be established that she has proven herself unfit or incompetent to carry out her duties to the minimal professional standards expected of a city manager, has been negligent or neglectful, evinces dishonesty, is intoxicated while at work, becomes addicted to drugs or alcohol, is absent without leave, is convicted of a serious crime, makes improper or unauthorized use of public property, accepts bribes, becomes infirm or unable to physically or mentally carry out her assignments, breaches the employment agreement or falsifies any city documents or records. If she is terminated for cause, she is due no severance pay. If she is terminated without cause, she is to be provided with six months severance pay.
Hoerning’s unilateral action at the eleventh hour in giving Dalquest a $32,876.03 per year raise might have severely undercut Mayor Velto’s reported effort to keep Hoerning in place as city manager. After going into closed session during the teleconference meeting it was holding on Wednesday night as a precaution against the spread of the cornonavirus and discussing Hoerning’s performance and what her future with the city, if any, was to be, the council reconvened in the remotely held forum being broadcast on local cable channels and via the city’s website. At that point, City Attorney Steve Deitsch announced that the council had voted unanimously to place Hoerning on leave pending future action by the council.
The Sentinel has learned that despite joining with his colleagues in the vote to suspend Hoerning, Velto is, or at least was, angling to convince his colleagues to bring Hoerning back to the city manager’s position immediately upon her completion of an accelerated college level intensity course in municipal management. It is apparently Velto’s position that Hoerning, who is trained in civil engineering and was the city’s public’s works director before she was elevated to serve as interim city manager, is rough around the edges because her education emphasized the technical aspects of engineering and public works rather than finance and public management. He nevertheless considers her to be a valuable asset to the community, even though she may lack the by-the-book training and experience to serve in the role of city manager. An intensive tutoring session by an individual such as Greg Devereaux, who was formerly San Bernardino County chief executive officer, Ontario city manager and Fontana city manager, would set Hoerning on the right course, according to Velto.
The maneuvering she engaged in to provide Dalquest with a raise he was not entitled to might convince the other members of the council that Hoerning does not deserve a second chance.
The provision of the unauthorized raise to Dalquest might constitute cause for Hoerning’s dismissal, such that she will not be due the roughly $117,306.12 six-months severance she would otherwise be eligible for if she is terminated without citing cause.
Moreover, Dalquest’s acceptance of the raise may have put his continued tenure with the city in jeopardy as well. This, too, is troubling to Velto, who attended Upland High School with Dalquest, who is one year younger than he is, from 1972 until 1975.
While Hoerning could no doubt put the $117,306.12 in severance pay to use, she could probably survive without it.
Hoerning began with the City of Ontario as an intern in 1984 while she was yet a student at Cal Poly Pomona. In 1985, after her graduation, she was given full status as an employee with that city. She subsequently went to work for the City of Upland as the assistant public works director. In 2008, she departed Upland and was hired on as the director of municipal utilities and public works engineering with the City of Redlands. In 2011, she returned to Upland to become public works director. With more than 35-and-one-half years of continuous employment in the public sector, she is qualified, if she retires now, to pull an annual pension of $208,218.36 [calculated thusly: 35.5 (years) X 2.5 percent X $234,612.24 (her present salary)] for the rest of her life.