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Council Refuses to Close the Gap on Former Interim City Manager’s Pension Shortfall

A dispute over the legality of granting the former City Manager pension benefits erupted into a maelstrom of criticism.

Rajeev Batra spoke to the Santa Clara City Council Tuesday night, imploring them to award, what he characterized as, past-due benefits for his time as Interim City Manager. Batra stepped in after the departure of Julio Fuentes in 2016. The former Public Works Director retired from the City, filling the role of City Manager as a retired contractor.

However, although he received a 5 percent raise after returning to fill the role of City Manager, he was unable to bank pension money at his new salary because of the California Public Employees Retirement System (CalPERS) salary cap. That cap prevented him from earning retirement benefits on yearly salary higher than $265,000. Batra came before the Council requesting the Council make up the difference, which amounts to roughly $25,000.

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Batra said he was “misled” into retiring in March 2017. He took the role as interim City Manager to serve the Santa Clara; however, he said, he would have been better off financially had the Council not approved the 5 percent raise for him in a closed session and he had returned to the public works department, where he would have accrued vacation time and sick leave.

When he brought the matter up with City Attorney Brian Doyle, Batra said he was “dismissed.”

“The responses were very negative toward me,” he said. “I feel very low in my heart.”

Batra took issue with how this problem was agendized in closed sessions previously, adding that he was not “litigating” the City—as had been written on the agenda. He had hired law firm Berliner Cohen to provide a legal opinion on whether the Internal Revenue Services (IRS) code allowed for such benefits. That legal opinion agreed with Batra’s assertions.

However, Doyle said Batra made some “serious misrepresentations” and that the Council has no grounds to award him any benefits and that doing so would violate the California Constitution. Perhaps, he said, Batra “misunderstood the legal memo,” adding that he was “baffled” how anyone could misunderstand the circumstances. Further, he pointed to Council Member Patricia Mahan’s motion to approve Batra’s raise, saying it referred to an IRS decision. He said “no one explained what that meant.”

Still, Mahan, who is also an attorney, contests that her motion intended to award Batra the raise with a promise to fill the pension gap without awarding any additional incentives going forward. She accused Doyle of twisting the intent of her motion and the spirit of the entire discussion.

For the City to “renege” on an agreement with Batra when he stepped into the role of City Manager when the City was “in chaos,” Mahan said, is “shameful.” Council Member Pat Kolstad was absent from the meeting, so Mahan moved—at Batra’s request—to push the discussion to a later date. However, that motion failed in a 3-3 vote, with Mahan and Council Members Dominic Caserta and Teresa O’Neill supporting it. Mahan called it “shameful” to have the discussion without the full Council present.

Caserta apologized to Batra for the way Doyle treated him, saying he doesn’t believe anything the Council did violated the state constitution and that Doyle used “loaded verbs” that were “inappropriate.”

Mayor Lisa Gillmor in turn apologized to Doyle for Caserta’s comments, calling it a “personal attack,” saying the Council is “starting to get used to the personal attacks and name calling.”

Caserta sniped back at Gillmor, saying that accusing him of name calling is “not worthy of the position [she’s] in.”

Mahan said the framing of the question when seeking legal opinions makes a big difference. She noted how one question was posed regarding the legality of Batra’s situation in reference to the IRS while another was framed in the context of state law and the CalPERS system, both of which yield different answers.

“You could put three attorneys in a room, you are going to get five opinions,” she said.

The Council voted 5-2 to reject Batra’s request. Caserta and Mahan voted “no.”

 

City Clerk and Auditor

The Council also discussed adjusting the role of two vacant city jobs. The first of which was the city and stadium auditor. An audit—prompted by a grand jury investigation into stadium operations last year—recommended the Council appoint a city employee to act as auditor for the City.

The Council agreed with the ad hoc committee’s recommendation to appoint the Assistant Finance Director, a position that sits vacant, to that role. The Council voted unanimously to appoint the Assistant Finance Director to take on auditing responsibilities.

The clerk’s position, however, proved more divisive. In the wake of City Clerk Rod Diridon Jr.’s resignation earlier this year, the Council opted to hold a special election to fill his seat for the remaining two years of his term. However, during a study session last month, Council Members expressed concerned about whether those running would be qualified, citing the “changing role of clerks.”

Jennifer Yamaguma, Acting City Clerk, presented options regarding splitting up the clerk’s duties. In the first of the options she presented, the Assistant City Clerk—another appointed position that sits vacant—would assume all the responsibilities of the clerk except handling elections and being the custodian of the city seal.

This idea drew ire from Caserta and Mahan.

“It seems like the Assistant City Clerk will become the City Clerk,” Caserta said. “There is absolutely no way I want to take away the power of the people to make decisions. Why do we have a different criteria for those of us up here?”

The City Council has no education requirements—something he said is “evident when looking at the dais.”

Mahan said such an option “guts” the City Clerk position, calling it an “end-around.”

“This is an ill-disguised attempt to change the city charter without going to the citizens,” she said. “It reminds me of the Prince and the Pauper.”

However, Gillmor said the Council already had a study session to discuss the very options Yamaguma presented, taking the opportunity to take a dig a Caserta for not attending that meeting. She said that “professional requirements are preferred” to “keep the sanctity” of the position.

 

Dark Money

Doyle also presented a draft of an ordinance to regulate what he called “dark money.” The ordinance would impose stricter limitations on political contribution disclosures.

The new ordinance, which had been discussed by the Ethics Committee back in October last year, would require donors to report political contributions of more than $100. Violation of the ordinance would result in a misdemeanor charge, constitute a contract violation, could result in civil action and assuming litigation costs.

The goal of the ordinance, Doyle said, is to provide “maximum transparency on who is spending money.” Funneling money through nonprofits is becoming an issue, Doyle said. By ferreting out contributors, he said determining conflicts of interest or money laundering will become easier. The ordinance is designed to work “in harmony” with state law while being tougher on “dark money.”

“We are kind of leading the charge here,” he said.

Gillmor said the ordinance will finally allow the Council to figure out who is behind BLUEPAC, a 501(c)4 nonprofit that endorsed Mahan and warned against Gillmor in the 2016 election.

Such an ordinance, Gillmor said, will prevent “dark money” from “infecting other cities like Santa Clara.”

 

Planning Commissioner

Because of Kolstad’s absence, the Council opted to delay voting on appointing a new planning commissioner.

At a meeting earlier this month, the Council had narrowed the field of 10 candidates down to two—Jeremy Hicks, an engineer at Intel, and Anthony Becker, a former City Council candidate. However, a split vote in the absence of Gillmor prompted the Council to push the vote back to Tuesday, where the Council in turn pushed the discussion to its next meeting because of Kolstad’s absence.

 

College Football Playoffs

Gillmor said at the meeting that she was “very excited” to have the 2019 College Football Playoffs (CFP) championship game, but that “we’ve had absolutely no information about this.” The CFP committee awarded the game to Santa Clara over two years ago, in November 2015.

Jim Mercurio, Vice President of Stadium Operations and General Manager at Levi’s Stadium, explained to Gillmor that the bid was made, as are all bids for big events at Levi’s Stadium, by the Stadium Management company with the concurrence of the City Manager—in this case, of two former City Managers.

Other cities have assumed the cost of previous CFP games—estimated to run a $12 million loss—but Gillmor refuses to undertake any of it. The San Francisco 49ers have agreed to cover any losses.

Gillmor wanted to set up an “escrow” account to pay City employees for CFP event-related work, but City Attorney Brian Doyle explained that, legally, the City can’t legally pay employees through an external entity. Normally, the City bills the 49ers for these costs, based on the codes used on employee timecards.

“Floating $12 million through our general fund” would create an extra layer of complexity and increase the likelihood of billing errors, said Gillmor.

“The $12 million isn’t your public safety costs,” explained Mercurio. The City’s cost for the game would be less than $1 million. The City was fully reimbursed in 2016 for $3.5 million in Super Bowl 50 costs.

After a discussion of what constituted a Council “consensus” directive to City staff—head nods, winks, raised hands—the City Manager was directed to return in May with alternatives for tracking CFP-related costs.

The Council will meet again at 7 p.m. on Tuesday, May 8 in the Council Chambers at City Hall, 1500 Warburton Ave. in Santa Clara.

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