After More Than A Decade During Which Valdivia & Bankruptcy Devastated The City
After a nearly 11-year absence, Charles McNeely is back in the position of San Bernardino city manager.
In December, in the final weeks of John Valdivia’s tenure as mayor, Robert Field was persuaded to resign as the county seat’s city manager. The following month, with Helen Tran having supplanted
Valdivia as mayor, she and the council agreed on having McNeely, who had served as San Bernardino city manager from 2009 until 2012, return to the position of top administrator on an interim basis.
Some have observed that San Bernardino, at 62.45 square miles and a population of 222,101, simply wasn’t big enough for both Valdivia and McNeely.
It certainly appears that Valdivia’s tenure in the capacity of an elected official in San Bernardino was incompatible with McNeely’s service in the capacity as that city’s administrator.
In 2009, McNeely was the city manager of Reno, Nevada, the self-styled Biggest Little City in the Word, when he was lured to take on the city manager’s post in San Bernardino.
Coming into that position, McNeely recognized he faced a challenge, as San Bernardino was struggling to overcome stiff financial headwinds, ones that were an outgrowth of the decision by the Department of Defense a decade-and-a-half previously to shutter Norton Air Force Base in 1994. In the intervening time, the local economy had contracted, such that throughout the first decade of the Third Millennium San Bernardino was engaging in deficit spending with each annual budget, depleting the reserves the municipality had built up over the course of nearly a century. A major issue for the city was the exorbitant costs to the city from past concessions to the city’s employees’ unions. In particular, salaries and benefits paid to the city’s public safety personnel – firefighters and police officers – stood at roughly 79 percent of the city’s budget. Total personnel costs ran to more than 92 percent of the budget, leaving just over 7 percent of the city’s available means for capital improvements and maintaining its aging infrastructure. This was exacerbated by the consideration that McNeeley’s time in San Bernardino came in the middle of the downturn in the U.S., California and local economy that lingered for more than six years and was dubbed the “Great Recession.”
Then-San Bernardino Mayor Pat Morris, a former Superior Court judge and before that a prosecutor with the district attorney’s office, huddled with McNeely. The two had come to the realization that the city could not sustain the burden of providing constant salary and benefit increases to the city’s work force. Morris assembled a bare 4-to-3 city council majority willing to resist pressure being brought upon the city to provide automatic yearly salary increases to city employees.
In 2011, the effort to pull San Bernardino back from the financial abyss it was teetering over was compromised when Valdivia in that year’s municipal election defeated Third Ward Councilman Tobin Brinker, a key Morris ally in the effort to control city employee salaries. Valdivia had been elected with heavy support from the police officers’ and firefighters’ unions based upon his commitment to them that he would work to undo the employee pay freezes put in place by the Morris coalition. Upon assuming office in the spring of 2012, Valdivia declared there was no financial shortfall at City Hall. His presence on the city’s decision-making panel cleared the way for the police and fire unions to demand and receive the wage and benefit increases that Morris’s and McNeely’s collective effort at fiscal austerity had been denying them.
McNeely, who understood precisely what runaway spending on city employee salaries meant to the city, a month after Valdivia was in place on the city council and not wishing to be at the helm when San Bernardino declared bankruptcy, resigned as city manager effective May 1, 2012. In August of that year, the city filed for Chapter 9 bankruptcy protection.
During Valdivia’s time in office, he was able to collect over $850,000 in political donations, which warded off any competitors challenging him for reelection in the Third Ward in 2015 and enabled him to run successfully for mayor in 2018. During the Valdivia era, the city saw itself surrender its status as a full-service municipality when in 2015, staggering under pay and benefit increases for firefighters the city could ill-afford, the city dissolved its fire department in favor of arranging with the county fire department for the provision of fire protection service to the city. Likewise, the city’s sanitation division was closed out that same year and the city now has a franchise trash hauler.
Valdivia cut numerous deals with those entities donating to his campaign fund, arranging for them to get city contracts for the provision of goods and services or be awarded city franchises or, in the case of developers, have their projects approved. A pay-to-play environment became synonymous with City Hall during Valdivia’s rein there.
During that time, Valdivia in his capacity as mayor involved himself in a series of disputes with approaching two dozen city employees, resulting in resignations and firings that have yet to fully untangle themselves, involving at least six still-unsettled lawsuits against the city in which inappropriate treatment of employees or wrongful termination is alleged. Tran, a city resident who was a city employee under McNeely before she rose to become the city’s human resources director, departed to become human resources director in the City of West Covina in 2019 as Valdivia’s disputes with city employees intensified.
Tran, motivated in large measure by what she saw as the depredations of the Valdivia regime, was one of six candidates opposing Valdivia in 2022. Despite his electioneering war chest which was larger than that of all of his opponents combined, Valdivia finished in third place in the June 2022 Primary election. Tran proved victorious in the November General Election in her run-off against former San Bernardino City Attorney Jim Penman, who finished second in June.
Field’s departure in December had much to do with the perception that he would prove to be an unacceptable vestige of the Valdivia administration.
Tran, who gave up a more lucrative assignment as the human resources director with the City of West Covina to become San Bernardino mayor, was favorably impressed by McNeely during the time she worked as an employee of the city while he was running municipal operations during the three years he was with the city previously.
The seven-member city council’s vote to bring McNeely back was done in a closed session and was unanimous, including the eighth vote by Tran, who on most issues has no vote, but is empowered to participate in votes pertaining to hiring the city manager and city attorney.
McNeely was the first and yet the only African American city manager in San Bernardino history.
The city that McNeely is returning to has undergone some degree of change in the more than a decade that he was gone.
He is retired and a participant in the State of California’s public employees’ pension system. As such, he is prohibited from working for more than 960 hours for any governmental entity in California during any municipal fiscal year, which runs from July 1 to June 30. He is to remain in place only long enough for the city to find someone to serve as Field’s full-fledged replacement. Because he has started just now, more than halfway through the 2022-23 fiscal year, if the city has not found a replacement city manager by June 30, McNeely will be able to remain in place until December 31, 2023.
Field was the sixth city manager employed by San Bernardino since McNeely left, including Andrea Travis-Miller, who held that interim position for ten months after McNeely’s departure in 2012 and oversaw the city during its bankruptcy filing and returned to serve as city manager in 2017. She was ultimately terminated by the Valdivia-controlled city council in 2019.
The city still has unresolved financial issues, and McNeeley said he intends to prepare the way for whoever succeeds him in the role of city manager to deal forthrightly with those.
This week, at the city council’s February 1 meeting, McNeely told the city council what he intends to accomplish in the brief time he will be in place. At a few spots, he made veiled references to the need to redress the issues that had manifested as a consequence of Valdivia’s oversight of the city.
“I thank you for your confidence and your commitment to this city and your support of me as your interim city manager,” McNeely said. “My commitment to you is: in the time that I’m going to be here, I will do everything I can to live up to your expectations. I’ve been in this business a long time as city manager. I worked in many places as city manager but also I grew up in this profession. So, I know a little bit about cities and what it takes to run cities and the quality of leadership that’s necessary.”
McNeely then made an oblique reference to Valdivia, contrasting the dedication and honesty of Mayor Tran, who successfully ousted Valdivia from the mayoral position last year, and six of the current council’s seven members – Ted Sanchez, Sandra Ibarra, Fred Shorett, Ben Reynoso, Kimberly Calvin and Damon Alexander – who had evinced major differences with Valdivia over the last two to four years, with the character traits of the former mayor.
“I will tell you my observation, simply from the time I’ve been here, is anybody, any community would be hard pressed to have the quality of leadership that you as political leaders on this dais have with respect to any city. I’d match you up against anybody from the standpoint of your passion, your integrity and your desire to get things done. So, this community is fortunate to have you as a leadership of this city. So, I applaud you for that and I’m looking forward to working with you on a day-to-day basis. My commitment is to try to be responsive to you, to assist you in any way that I can and have staff work with you to make sure that your needs, that your constituents’ needs are getting met. So, I stand by that pledge.”
Still, McNeely said, good intentions and honesty is not enough when it comes to governance. He told the council that taking a reasoned, sensible and intelligent approach to defining the city’s problems and engaging in problem-solving is necessary if they are to collectively succeed.
“Let me also say to you that one of my observations – and I have many of them – that while there are a lot of things on our plate, a clear observation that I have is the structure that we have right now is not as effective as it needs to be. There’s some things that we have to do to move this city forward.”
McNeely continued, “One of them is that even in the format that you have now, you have a number of issues that require a lot of your time. In order to deal with those, in my opinion, we are going to need to step back a bit and designate some time to focus on many of these issues beyond the simple council meetings that you have. You just simply can’t get there having twice a month meetings. I want to give you a heads up about things that are out there and we should be thinking about and focusing on. It will highlight the diversity and the challenges that we have.”
Of those, McNeely said, “The first one is we do not have as a city of this size any kind of comprehensive strategic plan. We need to focus our time and intention on developing something that gives us a road map of where we need to go and the community needs to go, and [have] the community and you buy into that. The leadership starts with you. One of the things I would like to do, first and foremost, is get some time with you so we can set up a workshop and you spend the time to talk about the longer-term vision for this community, what are the issues and what kind of work plan you will be willing to accept and support going forward. The staff has a vital role in this obviously, but in order to get there, we have to spend some quality time doing it.”
Another issue that had been articulated in his conversations thus far with the council and others, McNeely said, “is the agreement with the county on property taxes.”
In 2015, in transitioning from a city-run fire department to having the county fire department provide the city with fire protection, the city made a giveaway of its property tax that auditors judge as having been poorly negotiated and by which the county is getting more revenue than is required to pay for the fire protections services actually provided to the city.
“I’ve heard over and over again that we need to sit down and talk about that,” McNeely said. “Whether or not we can change it is another question, but if we don’t sit down and talk about and explore the issue, look at it, bring some talent to the table to look at options, then we have failed this community. That’s one of the items I’m saying is at the forefront that needs to be discussed.
“Another one is the organizations that is already in place, and by that I mean the city organization,” McNeely went on. “A number of issues in my time here have come up, bubbled up and I’ve looked at this and said, ‘What we have right now doesn’t work. It needs streamlining. It needs to be reconstituted. We have to be more effective. We’ve got too many issues on our plate that have an organizational bureaucracy that is unresponsive, that is not focused to meet your needs and that of the community.’ So, we’ve got to do something about that. That’s in my lap, but I want the opportunity to come back and make some recommendations to you. And then you can say, ‘Yes, city manager, we like it’ or ‘No, let’s tweak it.’ We’ve got to change what we’re doing.”
McNeely said, “The third is our legislative packet, the legislative process that we have. I’ve talked to several of you about this. I know we have a National League of Cities conference coming up. I think we’re coming back for the next meeting with some proposals. But it’s just simply at this point focus on the National League of Cities. My recommendation is that we need to step back and we need to develop a formal process for dealing with legislative issues, and that’s legislative issues at the federal level and legislative issues at the state level. We have no one right now in house that’s focused on that. So, we need at your level for us to design a process so that it’s an annual process understood by you, understood by the community, that says, ‘Here’s how we’re going to do business with legislation and here are our partners out there that we need to work with in terms of getting the dollars that we need and passing the kind of legislation that we need to benefit this community.’”
McNeely said, “The other is economic development. If there’s one topic I heard over and over again, it’s economic development. My concern there is staff is working on a number of different issues. I’ve seen some of the projects, but [we] do not have an effective economic development program that’s been brought to you and signed off by you that gives us some guidance. I’m recommending that we sit down in a workshop fashion and talk about it, get your expertise as political leaders to give us some guidance on what you want. We can wrap cost around that. We can talk about strategy, but it really has to emanate from you as our political leadership.”
McNeeley said the city has to figure out what it is going to do about its now-shuttered City Hall, which was built in 1972 with concrete rather than steel pillars. That renders the building potentially vulnerable to collapse in earthquakes of a certain magnitude or greater. Until the pillars are reinforced, a decision to abandon the building was made in 2017. It is possible to reinforce the pillars, but there is no clarity as to whether it would be cost-efficient to do so or whether it would be better to raze the building and start from scratch.
“The other one out there is the City Hall renovation, the old City Hall renovation,” McNeely said. “I had the opportunity to tour that very recently. I’d been out of the building for a while, but we walked through that. I got a chance to see some of the issues, the problems that we are going to be confronted [with], but to a person, I’ve heard ‘We want to do everything we can to save that building.’ So, if that’s the case, we need to develop a plan for how we’re going to do that. What’s it going to cost? What’s the process? Who do we need to bring in? That’s not a discussion that can be had in its entirety at this dais. So, spending some time and getting away and saying, ‘What are the expectations? What do we need to do? City manager and staff: what do you need to do? What do you need to bring back to us so we as council/mayor can say, “Yeah, that’s right. Let’s go do this. Let’s get this done.”’”
“The other is our public safety. By that, I’m simply saying, ‘What kind of public safety system do we want? What are the issues around public safety that we want?’ If we were to envision what our public safety services would look like from your standpoint, what would that be? What are the expectations and the desires you have? And I know we have a great chief. I have been extremely impressed with him and the officers that I’ve seen, but we really need to sit down and spend some time talkin’ about police services in this community and making sure they have the resources they need to accomplish what you want them to do.”
McNeely mentioned rent stabilization and housing issues.
“Everywhere I go in the community, that’s an issue,” he said. “We don’t have a strategic plan developed that says, ‘Here’s how we’re going to go about doing that. Here is the staff we need for that. Here are the partners we need to pull in to make that happen.’”
NcNeely noted that “When I was here several years ago, one of the systems that we put in place was a call center and it was designed as a one-stop shop where we could work with our citizens and give them one number to call. They would get bounced around from one department to another where ‘Gee, no, you need to talk to so-and so,’ and they would call another department and they would call another department. That system was designed [to] put that burden back on staff. We would be the ones that would work with residents and then solve those issues, and then more importantly get that information back to our residents, and say, ‘Yes, we got it taken care of’ or “No, we didn’t and here is why we didn’t.’ It is so critical for us, if we are going to build public trust that we as staff are going to need to be more responsive to the citizens that we serve. We have the capability. We have a system in place. We’re just not using it effectively. For whatever reason, it’s there but it’s not being used. I’ve already had discussions with staff [on] how we go about improving that. And beyond that, that system also is a useful tool, a data tool for each one of you as council members because you can get into that system and you can see the complaints, the issues and break it down by your ward and you can see if there are code enforcement issues, police issues in your ward, pothole issues, you name it. Any complaint that comes in, you’re able to go in, by ward or city, and see what we are dealing with. When we are doing budgets every year, that tells you what we are doing and how well we are doing it, and tells you how we should be allocating dollars.”