In a scathing report that was released on Thursday, the grand jury found that the dysfunctional atmosphere at City Hall was attributed to a combination of factors, including ineffective leadership at the council level, a general lack of knowledge by certain department heads, and redundancies in leadership that led to a tremendous amount of waste — all of which led to an atmosphere of uncertainty among city employees watching from the sidelines as nearly every single department head in the city turned over during that period.
The investigation into the City of Manteca began after a number of requests were submitted to the San Joaquin County Civil Grand Jury — which, unlike a criminal grand jury does not have the power to indict criminal wrongdoing, but instead serves to ensure transparency in the operations of government agencies within the designated county — back in 2019, but because the report was not going to be ready in a timely manner, the investigation was shelved.
“Upon thorough review, the Grand Jury concluded that several basic administrative protocols were missing from the management of the city: lack of consistent and formal personnel practices, lack of training and succession planning, and absence of financial acumen which in turn led to insufficient checks and balances,” the grand jury wrote in its summary of the investigation. “There is also a need for improved internal employee grievance processes. Overall lack of leadership from the council and inexperience in the city manager’s office created the dysfunctional administration that is struggling to effectively manage city operations.”
After interviewing witnesses and combing through thousands of pages of documents, the grand jury is recommending that Manteca:
*Develop, implement, and adhere to hiring, promotion, and termination policies.
*Utilize open recruitment, both internal and external, for all vacancies.
*Implement succession planning so that institutional knowledge is maintained.
*Develop and implement definitive onboarding and training plans for all employees.
*Develop a grievance procedure that provides an option to allow grievances against top administration to be dealt with by an external third party.
*Ensure the management of the city’s finances are transparent, current, and within the confines of budgetary constraints.
In its summary, the grand jury pointed to a number of factors that were to blame for the current situation Manteca finds itself in.
“The nature of our democratic form of government is not static. Changes are inevitable, leaders change, laws change, people and ideas change, and cities grow. The same is true for city employees: periodic elections decide the mayor and city council, employees are hired, fired, transferred, or retire. These changes are common but are generally not crippling,” the grand jury wrote in its conclusion. “However, when there is extraordinary and unprecedented loss of key personnel, it can be disconcerting to the city’s employees and the public.
“This can lead to rumors and conspiracy theories about what is happening at ‘City Hall’ and leaves remaining city employees uncertain about their futures. All these changes can also reveal problems that might otherwise go undetected. This is what happened in the City of Manteca.”
Inconsistent employment practices
In the first section of the report, the grand jury found that Manteca did not follow best practices when it came to recruiting employees or promoting employees from within, chiefly with the way former City Manager Miranda Lutzow was given the job of Interim City Manager.
While Lutzow had management experience in cities prior to coming to Manteca, she had never been in a position equivalent to city manager, and subsequently promoted others into similar roles that further exacerbated the issue, according to the report.
“In general, executive hiring can be accomplished in two ways: outside candidate recruitment or internal candidate promotion. Promotion from within city ranks usually involves a long-serving, tested and trusted employee, who has the expertise to be an executive serving the community,” the report stated. “Manteca’s appointed city manager was neither a long-serving employee, nor did the candidate have any experience as a city manager. Only one council member expressed concerns about the lack of experience and voted against the appointment.
“The city manager then appointed the city clerk as interim assistant city manager, who had no municipal management experience, but was seen as supportive of the city manager. Neither position went through any kind of recruitment process.”
The grand jury found that the promotions to both of those positions led to some of the turmoil at city hall as and throughout the wider community as they “struggled to learn the job.” The recommendation to the city moving forward will be to draft and adopt written recruitment policies and procedures for all executive positions and follow them by the end of this calendar year.
In addition to issues with the city’s top brass — including the rushed way in which the previous city manager tried to reorganize the structure of the city to include 27 new positions without complete job descriptions or funding mechanisms to pay for them — the grand jury also found that insufficient training and development, an inconsistent promotion policy, a lack of a formal succession plan, and a flawed grievance procedure exacerbated the issues.
It was the inconsistent administrative leave and employee termination process, however, that resulted in a concrete damage.
Over the course of the last two years, the grand jury found, paid leave, investigations, severance packages, and wrongful termination lawsuits have cost the City of Manteca more than $1 million.
Ineffectual city management
It was the promotion of Lutzow, the report states, that kick started a process that led to the majority of the issues the city faced.
According to the report, Lutzow promoted former City Clerk Lisa Blackmon to the role of assistant city manager despite the fact that she had no executive experience, and the two decided to split up the duties of the city manager. The decision was made to bring in a third executive position by promoting Toni Lungren to the role of deputy city manager, and the duties were spread out to include her in the management trust as well.
“The team interviewed candidates for employment, attended meetings, and conferred on potential actions together, duplicating efforts,” the report reads. “The new administrative team projected themselves as team-oriented leaders, who welcomed new ideas and changes.
“However, they were intolerant of any resistance to their ideas.”
The report also claimed that the administrative team quickly became overwhelmed, making costly mistakes in the process — specifically the decision to give all paid employees three extra days off during the holiday season while claiming that it wouldn’t end up costing the city any extra money.
That decision, the report states, was made without realizing the 24-hour staffing for the city’s vital public safety services, which ended up costing the taxpayers more than $240,000.
But the city’s top brass still had people to answer to.
The report claims that the multiple members of the Manteca City Council routinely violated the Manteca Municipal Code when it came to how orders were relayed through the chain of command. According to Section 2.08.080 of the city’s governing rules, the council is mandated to direct orders to staff through the city manager, a process that was routinely bypassed, the report claims, by the mayor and some members of the council who went so far as to give detailed plans to department heads without the knowledge of the city manager.
The decision to bypass the city manager, the report states, robbed the public of the right to have its business conducted in the open and created confusion among city staff.
Faulty financial operations
The third and final section of the report addressed the city’s current financial condition, the factors that led to it, and the impact on the city council’s operations and the decisions made without the full scope of the city’s financial position.
Part of the problem, the report said, was a lack of personnel with the training needed to manage a complex financial network like Manteca’s.
“The city’s financial accounting software and computer hardware were never fully implemented. The inability to manage and extract information made it difficult to prepare financial reports in a format that was easily understood by elected officials and the public,” the report reads. “There was a lack of personnel with advanced training or specific accounting skills which would enable them to maintain accurate reconciliations, post accounts, and properly account for the various interfund transfers being directed by city management.”
While things that were supposed to be done weren’t actually being done, none of that was apparently known to the city council which were, the report claims, provided information that was less than accurate to make decisions with.
And the fact that the information that they did obtain wasn’t delivered in a timely fashion before those decisions were rendered was a different issue entirely.
“The cumulative impact of the conditions in the finance department was the lack of timely, accurate information being provided to the city council and departments. With account reconciliations and fund balances in question, and numerous internal transfers implemented among restricted funds, the city council was working with a distorted and inaccurate understanding of the city’s financial condition,” the report reads. “The city councilmembers were unaware of these distortions and inaccuracies, or the extent of their fiduciary obligations to the city.
“They relied on the information provided, asking few or no questions. Oftentimes, agendas and staff reports were not delivered with adequate time for public or council review.”
The city’s response
Now that the report has been issued, the city will have 90 days from the receipt of the report to respond to the numerous findings and outline how the city will implement the 19 recommendations made by the grand jury.
If it disagrees with any of the findings, the city will have the opportunity to address that in its response with a reason why and any alternative information that may be pertinent.
The City of Manteca did issue a statement once the report became public, outlining the various implementations that have been put in place that satisfy many of the recommendations that were included in the report.
The release notes that the city has begun the process of conducting a thorough, professional search for a city manager — which the report recommended — as well as establishing a financial ad hoc committee to more closely monitor the city’s finances and using the newly-created city attorney’s office to rework the city’s existing policies and procedures and implement enhanced employee training.
“Ultimately, we are intent on providing stable, sustainable, and transparent governance for this community and will continue to work to enhance the trust and confidence our residents have in their local government,” the City of Manteca said in a statement about the grand jury report. “Our City Council consists of local leaders who love their community and want to see it thrive.
“They will provide the necessary vision to move our community toward the future by working effectively with staff.”
The City Council will ultimately respond to the report.
To contact reporter Jason Campbell email jcampbell@mantecabulletin.com or call 209.249.3544.
