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Meltdown: Sex, Lies and Scandals in... Carmel, Seaside, Del Rey Oaks, P.G. and Soledad

Monterey County Weekly -- Aug. 27, 2009

Webmaster Note: The Monterey County Weekly’s Aug. 27, 2009 edition published a front page story on the meltdown of local cities. Read up. This is what residents of a future City of Carmel Valley can expect in the future.

By Kera Abraham & Zachary Stahl

It’s been a cool summer in Monterey County. Wildfires have been slow to spark, and relatively mellow compared to last year’s epic blazes. But city governments are wilting under a different kind of heat.

Over the past several months, the cities of Pacific Grove, Carmel-by-the-Sea, Del Rey Oaks, Seaside and Soledad have become sticky with allegations and resignations involving the highest local posts. Mayors, city administrators and police chiefs are jumping ship in rough seas – facing allegations of misconduct, recalls, votes of no confidence and orders to take administrative leave.

What on earth is going on?

“It’s extremely abnormal,” says County Supervisor Dave Potter. “In my 20 years as an elected official, I’ve never seen this level of dysfunctional accusations coming forward at the same time in so many different places.”

The recessed economy may be stressing local governments out, but Potter thinks the angst runs deeper than that. “Maybe it’s the El Niño effect: Global climate change is hitting City Halls all over the place,” he jokes. “With sea level rise we’re all getting a little nervous.”

Whatever the reason, our cities are melting.

Herewith, the Weekly ’s Scandalometer scale. Let the fracas begin.

City Without Pity: Petty bickering, money troubles drive out three top officials.

By Kera Abraham

It’s enough for a city shake-up to involve the mayor, as in Del Rey Oaks and Soledad. When the city administrator/manager is implicated, as in Carmel-by-the-Sea and Seaside, City Hall itself becomes dysfunctional. And when the police chief exits, like in Seaside, fear creeps in.

But Pacific Grove tops the bunch, with all three top officials making a swift exodus. Sadly, the ongoing P.G. soap opera lacks sex appeal (as far as we can tell), but its other problems are juicy enough to give it pride of place.

The city manager was the first to go. In July 2008, former City Manager Jim Colangelo gave his six-month resignation notice. Deputy CM Charlene Wiseman was right on his heels, but the City Council persuaded her to stay on as interim city manager.

The council has struggled since January to find a replacement – several candidates have backed away in the last rounds, according to Councilman Alan Cohen – but the search may soon be wrapping up. Mayor Dan Cort announced Aug. 19 that councilmembers have settled on a top pick, who will be revealed Sept. 2 unless some skeletons come tumbling out of the proverbial closet. Just in the nick of time: Wiseman’s last day is Aug. 31.

That’s the same day Mayor Cort intends to resign, though he gave his fans some hope by saying he might be willing to stick around a little longer for “something urgent.” Cort first announced his bailout Aug. 3, prompted by a recall threat (also targeting Council members Vicki Stilwell, Bill Kampe and Deborah Lindsay) by regular City Council hecklers David Dilworth and Terrence Zito.

Ten days after Cort’s resignation bomb, Police Chief Darius Engles announced he’ll be gone in January.

That’s three top officials bailing out in the space of a year. WTF?

In hindsight, the economy was probably the trigger. In early 2007, P.G. officials launched a code-red mission to reverse a legacy of financial mismanagement by earlier administrations. The recession kicked them when they were down.

Colangelo and Wiseman took on the role of change agents, bent on avoiding the city’s impending doom by any means necessary. With backing from the City Council, they launched a massive reorganization, slashing more than 20 departmental positions while creating roughly as many at the central level. Deep service cuts and new taxes brought the budget back into balance, but pissed off residents.

And there are few crowds tougher than a bunch of P.O.’d Pagrovians.

“It’s hard to implement that much change and continue to run the organization,” Colangelo told the Weekly last August. “People’s feelings about the issues become very personalized, and it becomes more about whether they like me or dislike me than what’s right for the city… We need to get past that as a community.”

Wiseman, meanwhile, said she’d been busy cleaning up corruption in City Hall. “You can’t say ‘Wink wink, nod nod, you’re my friend and, I’m gonna give you the contract.’ That’s what was happening,” she explained last year. “I knew the illegalities of what I was finding.”

Money troubles ultimately drove out Chief Engles as well. After 11 years with the PGPD, he announced his resignation in mid-August, saying he’d had enough with the cuts to his department.

“Obviously we’re not right-sized, and we’ve been asked to lose another position,” he said after his announcement. “Future cuts in this time are just not what a chief needs. I just don’t agree with the levels that we’re at, and I don’t see it getting any better.”

Cort, too, blames the economy for stalling his agenda. He was appointed mayor in 2005, after former mayor Jim Costello stepped down for health reasons, and elected in 2006 and 2008. But he says he wanted to help guide the city toward sustainability – not get stuck in a Sisyphean labor of budget tweakery.

But ultimately, Cort says, it wasn’t the budget that drove him to quit. It was the incessant bitching.

Pacific Grove has a rare provincial quality, a small-town hokeyness that inspires the local tourist bureau to praise its “old-fashioned charm,” “storybook hometown quality” and “timeless air.”

But it also makes the place an anomaly in terms of civic engagement. City Council meetings are packed tighter than the Star Trek movie on opening night. In a town that clings to its traditions, the public comment period at the beginning of meetings has become a sometimes hours-long ritual, during which residents queue up to wheedle, kvetch, ramble, perform, pontificate, and sometimes even say nice things while the city careens towards bankruptcy.

The recall against Cort is on hold until Aug. 31, according to Dilworth will not comment on whether the campaign against the other three councilmembers continues. Cort says he still plans to step down around the end of the month – hopefully with a new city manager in place.

“The bottom line is civility,” Cort told the Weekly Aug. 11. “What [my resignation] really needs to do is protect these councilmembers, who are willing to work the way they do, from harassment. If I have to sacrifice my position, it’s better.”

Silent Scandal - Discreet is the word for accused city administrator.

By Kera Abraham

Not much seems to happen in Carmel-by-the-Sea. The tony village finds some spice in doggie glamour shoots and occasional celebrity appearances, sure, but it’s not the kind of place one would look for scandal.

At least, not until an employee filed a sexual harassment suit against City Administrator Rich Guillen.

A June complaint by Human Resources Manager Jane Miller paints a lascivious picture of her boss, alleging he had affairs with two of his subordinates and rewarded them with promotions and pay raises. Miller claims Guillen flirted with her too, and retaliated when she didn’t return his advances.

Moreover, Miller alleges, Guillen took a divide-and-conquer approach to all of his female employees, protecting those he viewed as loyal and forcing out those who fell out of his favor. He suppressed internal investigations into his own conduct, she further alleges.

The mayor and City Council, to which Guillen reports, knew about his discriminatory behavior but failed to prevent or stop it, she alleges. The complaint suggests “Guillen’s power at City Hall was unchecked,” and cues a series of settlements with employees over 40 years old (mostly managers) who left the city under Guillen’s pressure.

The attorney handling the case for the city, Rick Bolanos of Liebert Cassidy Whitmore, says he can’t discuss matters under litigation.

Guillen has likewise kept mum, as have Mayor Sue McCloud, the City Council and the women allegedly involved in the affairs – retired community services director Christie Miller and City Clerk Heidi Burch. Guillen and Burch are still reporting to work.

The city rejected all of the accusations in a legal response in mid-July. The first court date is set for December.

And while most current city employees are keeping quiet, three former employees who spoke with the Weekly on condition of anonymity backed up Miller’s claim, saying it’s mostly consistent with their experiences working under Guillen.

Another long-time employee said the female staffers in Guillen’s office are known as “Rich’s bitches.”

“It was a harem-like atmosphere,” said the source, who asked not to be identified. “The working atmosphere in the city is stressful and demoralizing. People are afraid for their jobs.”

Mayor McCloud seems to keep such a tight grip on the city that it’s hard to imagine any repercussions coming to Guillen, her right-hand man, unless they’re court-ordered. In that case, she may have some explaining to do, too.

Meanwhile, she’s staying the course. “I understand your point of view, but a person is innocent until proven guilty,’’ she told the Weekly recently, explaining her steadfast refusal to comment on the subject. “Perhaps the line of inquiry should be directed to the person who leveled the charges. We hope this will be all buttoned up – I shouldn’t say buttoned – in the not-too-distant future.”

Small Town, Big Drama: The heat is on in Del Rey Oaks.

By Zachary Stahl

The first thing new Del Rey Oaks City Manager Daniel Dawson did when he started at City Hall was to move into Mayor Joe Russell’s office. The move was rife with symbolism, since Russell has allegedly been micromanaging the tiny city for years, even having bills from the city attorney sent to his home.

In a revealing vote of no confidence, city staff and volunteers say Russell routinely harassed and intimidated city employees and officials, causing workers to take workers comp.

Now Dawson, a chipper 49-year-old, is the boss. “Since I’ve been there [Russell’s] role has diminished significantly,” he says. “He has been pretty much out of sight.”

But not out of mind. The rift between Russell and virtually everyone else at City Hall will come to a head on Sept. 3, when Dawson will present his findings in each of the 13 allegations on the vote of no confidence, including sending inappropriate e-mails and authorizing city attorney and auditor expenses without City Council consent.

Dawson says he will give each charge a rating, ranging from “likely happened” to “unknown,” then give the council a range of action options. The council could demand Russell’s resignation, send him a letter of reprimand, and possibly strip him of his mayoral duties by changing the city code to have an appointed—rather than elected—mayor. But only the voters can force Russell out of office with a recall.

Russell, who’s been on the council since 1974, isn’t likely to step down or admit guilt. At the Aug. 13 council meeting, which centered on the vote of no confidence, he was subdued and a little apologetic. “If I have caused any problems or hurt anyone in the city, it was certainly unintentional,” he said. “I want to bring everybody here together again.”

But Councilman Jeff Cecilio says Russell has already had his chances. “We’ve told him to tone himself down and be more respectful and more of a team player,” says Cecilio, who boiled over at the Aug. 13 meeting, saying the council was only prolonging action and knew that the allegations were true.

The three-year councilman says he called the mayor out for receiving mail from City Attorney Rob Wellington at his home and that he had to stand up to Russell when the mayor tried to put a buddy on the list of final candidates for city manager.

The city’s strange political history has contributed to the recent meltdown. Starting in 1999, Police Chief Ron Langford took on the double duties of top cop and part-time city administrator. That ended last summer when Dewey Evans, also chief executive officer of Seaside Basin Watermaster, filled in as acting city manager. In July, Evans handed the city’s books off to his colleague Laura Dadiw. On Aug. 4, Dadiw abruptly resigned. Two days later the city swore in Dawson as the city’s first full-time city manager in 10 years.

As the city neared hiring Dawson, 27 employees and volunteers went public with their grievances against Russell. “We are hoping the new city manager comes into a nice, well-rounded city with positive staff and a positive outlook,” said Kim Carvalho, deputy city clerk. “You can’t do that when you got someone working behind the scenes against everyone else.”

For now, Russell has lost his corner office. Whether he loses anything else is up to the council.

Bullfight in Cop Shop: City administrator, police chief lock horns.

By Kera Abraham

Compared to the scandals erupting in cities to the south, Seaside seemed to be keeping it together this summer, though sweating under the economic stress of stalled developments and declining revenue.

But like a struggling welterweight late in the fight, they got into the messy action when, 10 days into August, City Administrator Ray Corpuz abruptly placed Seaside Police Chief Steve Cercone on administrative leave, dropping an interim chief into his position within 24 hours.

A muffled wail sounded from the police department.

In a flurry of comments posted to online news stories about the ouster, readers – some of whose knowledge of internal drama indicate they’re department employees – started making connections. Anonymous tipsters began contacting the Weekly.

Shortly before he was excused, Cercone had placed three officers on leave: Deputy Chief Louis Lumpkin, Officer Barry Pasquarosa and Cmdr. Mike Kimball. The suspensions are rumored to be related to sexual harassment allegations by Code Enforcer Vanessa Alcaraz against Pasquarosa.

A former department employee, who asked to remain anonymous, said Corpuz is punishing Cercone for involving the District Attorney in the Alcaraz case, rather than treating it as a personnel matter.

Bolanos of Liebert Cassidy Whitmore, who is handling the Cercone matter for Seaside (as well as the Carmel scandal; see sidebar, p. 24), says the Alcaraz complaint – or that fact that Cercone may have handed it over to the D.A. – is unrelated to Cercone’s leave. “The reason Mr. Cercone was placed on leave was to allow for the department to respond to and address matters under investigation internally,” he says. “It had nothing to do with the D.A.”

The details are still sketchy, but the DA’s office has confirmed that Cercone made a criminal inquiry within roughly 24 hours of being put on leave.

The leaves “shouldn’t be viewed as punitive,” Corpuz said. “All these leaves have to do with making sure people’s rights are protected, the city is protected.”

Cercone says he’s been ordered not to comment.

Stephen Willis is interim chief in Cercone’s absence – though without proper vetting, he may not be qualified to wear the chief’s badge, according to state peace officer standards (see story, p. 13).

Corpuz says he doesn’t know when Cercone will return.

Cercone, meanwhile, is pushing back. He submitted a grievance to the City Council and city attorney Aug. 19 alleging, among other things, that “Corpuz and his staff obstructed a criminal case investigation by refusing to turn over complete evidence on a crime that happened in Seaside to the chief or his detectives.” Cercone’s suspension was retaliation for telling the district attorney about Corpuz’s meddling, the complaint alleges.

Corpuz says he hasn’t seen the grievance. He refers related questions to Bolanos, who could not be reached for a followup by press time. Assistant District Attorney Stephanie Hulsey says her office is not currently investigating Corpuz.

Mayor Ralph Rubio says he’s under legal advice not the discuss the matter. And City Councilman Dennis Alexander, a former SSPD officer now on Sand City’s force, calls for calm.

“Wait until this all shakes out legally,” he says. “All I can really say is the SSPD knows they’re facing some difficulty here, but the officers on the street just want to move forward and do their job. The level of safety has not been compromised.”

The level of gossip, meanwhile, is whirring toward full juice.

Recall movement is fueled by economic woes, labor disputes.

By Zachary Stahl

Soledad is feeling tension, not momentum. Dissidents are close to starting a petition to recall two councilmembers, and a union has filed an unfair labor practice charge against the city for laying off six employees.

The Committee for a Better Soledad wants to remove Mayor Richard Ortiz and Mayor Pro Tem Martha Camacho, claiming they mismanaged city funds by overspending and irresponsibly increasing salaries for police and firemen, depleting the city reserves $4 million to $10 million.

Sam Martinez, the recall committee’s spokesman, says residents want change. “I kept getting more and more feedback about how upset and frustrated people were with the leadership,” he says. “The money is supposedly there, and then all of a sudden it’s not there.”

Camacho says the allegations are false. “They are giving people bad information and scaring people into believing the city is bankrupt,” she says, adding that the police raises, an 18 percent pay increase over two years, were approved in 2007 to attract and retain officers.

In recent history Soledad’s general fund reserves were never as high as $10 million. The city’s fund balance is now about $4.7 million, Finance Director Stephen Compton says.

City officials riled up recall proponents when, in June, they laid off six workers, three of whom had been at the city for more than 20 years, including Martinez’s girlfriend, Irene Rodriguez. The employees were members of Service Employees International Union Local 521, which started representing general employees in March.

SEIU Local 521 filed an unfair labor practice charge against the city, alleging that three of the laid-off workers were members of the union’s bargaining team, which was negotiating its first contract with the city when the pink slips were issued. “This amounts to retaliation, not only for serving on the bargaining team, but for having recently participated in the union drive,” the complaint says. The union also alleges the city also didn’t give the union a chance to negotiate the layoffs and issued them unilaterally.

City manager Adela Gonzalez says the union’s claims are false. Ortiz and Camacho say they shouldn’t be blamed for the layoffs, which were necessary due to a more than $1 million shortfall brought on by the recession. “We don’t have any hidden agendas in regard to who was cut,” Camacho says.

Ortiz says the recall is a power grab by Christopher Bourke, a former councilman, who lost the November 2008 election to Ortiz. “[Bourke] took an opportunity to utilize disgruntled ex-employees to go out and get signatures because they were angry at the council,” he says.

Bourke, who is a supporter of the recall campaign, says he’ll run for mayor if nobody else steps up. “I’d be happy being off the council with decent people on there,” he says. Bourke says Ortiz crossed the line when he said at a candidate’s forum that the city had millions of dollars lying around, only to turn around later and say the city has a budget crisis. He adds that Ortiz could have done more to help developers deliver a proposed Wal-Mart and movie theater.

“I made some comments that the city was in good financial strength,” Ortiz says, adding that the city still has reserves and isn’t going bankrupt. As for Wal-Mart, he says, Creekbridge pulled out of the project because of financial difficulties and the movie theater developer is having the same problem. If the recall proponents are so worried about the city’s finances, Ortiz says, they should wait until the next general election in November 2010 instead of calling for a special election, which will cost the city up to $80,000.

While the city could see new faces on the dais, it already, like Pacific Grove, has to hire a new police chief. Former Chief Richard Cox retired early due to his medical condition, city officials say. Steven Belcher, who retired as Santa Cruz’s top cop, is filling in as interim chief.

The Monterey County domino effect.

Posted August 27, 2009 12:00 AM

By Kera Abraham & Zachary Stahl

Considering the cascade of troubles at the Peninsula’s neighboring City Halls, it’s tempting to use the phrase “domino effect.” There may be no direct link between one crisis and the next, but the Weekly has picked up on a few connections that are, at the least, intriguing.

1. Millers

Pacific Grove and Carmel-by-the-Sea share two sets of Millers who are unrelated, but deeply tangled in the latest scandals. Carmel HR Director Jane Miller is married to former P.G. councilman/police chief Scott Miller. Former Carmel community services director Christie Miller, a former P.G. councilwoman, is married to former P.G. recreation director John Miller. In Carmel, Jane alleges Christie had an affair with City Administrator Rich Guillen (which the city denies). And in P.G., a couple years ago, Scott didn’t oppose the firing of John. Awkward much? We’re guessing the Millers weren’t going on any double dates.

2. Attorneys

Both Seaside and Carmel-by-the-Sea retain local attorney Don Freeman for their cities’ non-litigation legal work. And both cities are tapping San Francisco firm Liebert Cassidy Whitmore to deal with their latest scandals. LCW’s Rick Bolanos is handling both Jane Miller’s complaint against Rich Guillen in Carmel, and the administrative shenanigans involving Police Chief Steve Cercone in Seaside.

On the plaintiff side, local attorney Michael Stamp has his fingers in several pots. He’s Jane Miller’s counsel for the Guillen complaint, and he won her husband Scott a sum in his earlier lawsuit against the city of P.G. for his ouster as police chief. Stamp also represented several former Carmel managers who settled with the city around their terminations under Guillen. It’s work he’s familiar with, having also worked for former Seaside employees who settled similar termination complaints in the mid-1990s.

3. Mayors

Both Soledad Mayor Richard Ortiz and Del Rey Oaks Mayor Joe Russell were the original good ol’ boys. Both men have been on their respective City Councils for decades. Russell was elected in 1974. Ortiz was elected in 1983.

4. Rich Guillen

The Carmel City Administrator held a number of managerial posts in Seaside, including acting city manager, before Carmel recruited him in 2000.

5. Gags

To various degrees, each of the scandalized cities is being less than transparent. Carmel officials won’t talk at all about the Guillen case, Seaside officials are offering very limited information about their suspended police chief, and P.G. – the most open of the bunch – won’t unveil the identity of its new city manager until early September. Del Rey Oaks officials, since there allegations about employee mistreatment by Mayor Russell, have frequently used the “personnel issue” card to not talk about details.

2008 © Monterey County Weekly

Last Updated: Aug 27, 09

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