...the apparent lack of fair and open conduct of some city business*

The District Attorney did not conduct an investigation of the alleged violations. City response - Disagree. 2100 Thousand Oaks Boulevard • Thousand Oaks, California 91362-2903 • (805) 449-2121 • FAX (805) 449-2125 Printed on recycled paper Honorable John R. Smiley Re: Response to 2005-2006 Grand Jury Report - Thousand Oaks City Council July 19, 2006 The District Attorney did investigate alleged Brown Act violations. The District Attorney, however, did not investigate any alleged Thousand Oaks Municipal Code (TOMC) violations.

Mr. Gatch was hired as City Manager of Thousand Oaks on July 13, 2004, and resigned his position effective June 30, 2005, after 38 years of service to the City of Thousand Oaks. City response – Concur in part. City Council approved Mr. Gatch's appointment as City Manager on July 15, 2003, with an effective start date of August 1, 2003.

The City Manager is appointed by majority vote of the Council and holds office at the pleasure of the Council. The City Manager is selected solely on the basis of executive and administrative qualifications as well as actual experience in the accepted practices and duties of the office. City response - Concur in part. Thousand Oaks Municipal Code (TOMC) Section 2-1.202, Appointment Qualifications, reads as follows: "The City Manager shall be appointed by a majority vote of the Councit, and shall hold office for and during the pleasure of the Council. The City Manager shall be chosen by the Council solely on the basis of executive and administrative qualifications with special reference to actual experience in, or knowledge of, accepted practices in respect to the duties of the office."

TOMC §2-1.2/4 provides for the removal of the City Manager by the City Council without cause with three affirmative votes and written notice of a termination date. The right of the City Manager to severance pay and any other arrangements incident to termination is in accordance with any contractual arrangement entered into with the City Council. City response - Concur in part. The TOMC Section cited in this Finding is incorrect. The correct TOMC Section is 2-1.214.

City Manager Gatch's contract provided for a formal annual performance review at the end of each fiscal year (i.e., by June 30). City response - Concur in part. 2100 Thousand Oaks Boulevard • Thousand Oaks, California 91362-2903 • (805) 449-2121 • FAX (805) 449-2125 Printed on recycled paper Honorable John R. Smiley Re: Response to 2005-2006 Grand Jury Report - Thousand Oaks City Council July 19, 2006 Mr. Gatch's initial employment agreement provided for an annual evaluation at the end of each fiscal year. However, the Second Amendment to his employment agreement (dated July 13, 2004, Section 6) removed any reference to timing and did not specify when his performance review should occur.

On May 25, 2005, Councilmen Masry and Dennis Gillette were requested by Mayor Bob Wilson to serve as a Personnel Committee to review Mr. Gatch's performance, salary, and benefits and to report to the Council with recommendations. Mr. Gatch provided a summary of his recent achievements and goals to the committee for consideration. City response - Concur in part. The May 25, 2005 date is inaccurate. City records indicate that the Personnel Committee (consisting of Councilmembers Dennis Gillette and Ed Masry) was in existence as early as June of 2004.

Mr. Gatch's contract (#6184-2004B) was modified on July 13, 2004, to eliminate the original contract expiration date of August 1, 2005. City response - Concur in part. Mr. Gatch's employment agreement was rewritten and approved by City Council in open session on July 13, 2004. The revised employment agreement also provided for increased benefits.

On November 8, 2004, the Personnel Committee recommended that, based on his performance, the City Manager receive a merit salary increase of 3%. He would also receive a nominal increase of 2% to the total retirement salary per year, plus tax benefits of nearly one-half of his retirement account not being tax deferred. In addition, based on the City's contractual agreement pertaining to a 10% supervisory differential, an amended contract provided a salary increase adjustment of 5%, for a total compensation increase of 8%. City response – Concur in part. In a memo dated November 8, 2004 to City Council, the Personnel Committee recommended that Mr. Gatch receive a 5% salary adjustment to maintain a differential in pay between the City Manager and his highest paid subordinate, as well as an additional 3% merit increase. 2100 Thousand Oaks Boulevard • Thousand Oaks, California 91362-2903 • (805) 449-2121 • FAX (805) 449-2125 Printed on recycled paper Honorable John R. Smiley Re: Response to 2005-2006 Grand Jury Report - Thousand Oaks City Council July 19, 2006

The performance evaluation and compensation item for the City Manager was removed from the agenda of the November 16, 2004, City Council meeting. It was agreed by the Personnel Committee and City Manager that the continuance of the performance review for a period of 3-6 months would have no detrimental effect on the merit and differential compensation adjustments. The adjustments would be made retroactive to July 1, 2004, when the original contract review was due. City response – Concur in part. Mr. Gatch had met with the Personnel Committee on November 16, 2004, prior to the City Council meeting, to relay that members of the City's Executive Team earlier that day decided to waive their salary adjustments. Based on this, Mr. Gatch agreed to postpone consideration of his own performance review and salary adjustments. In response, the Personnel Committee recommended to continue Mr. Gatch's performance review until a later date. The full City Council agreed to this continuance request during open session on November 16, 2004.

A review of City Manager Gatch's performance was never conducted by the City Council. Compensation and benefits issues were addressed by the Personnel Committee on November 8, 2004. City response - Concur in part. Although the City Council did not review Mr. Gatch's performance in November 2004, the Personnel Committee did so.

Since there had been no Council meeting discussion (the City Manager's termination was not an agenda item), numerous citizens alleged that Councilman Fox had talked with other Council members, in violation of the Brown Act, in order to determine that he had enough votes to terminate the City Manager. City response – Disagree. From after November 16, 2004 and prior to May 5, 2005, a City Council closed session concerning the City Manager had not been agendized. As explained in the Summary Section, the District Attorney determined that there was not sufficient evidence to suggest that any Councilmember violated the Brown Act. To suggest otherwise is not accurate. As the District Attorney noted, there is no evidence, or facts, to suggest that any Councilmember violated the Brown Act and talked to multiple Councilmembers to determine if there were enough votes to take action for or against Mr. Gatch. 2100 Thousand Oaks Boulevard • Thousand Oaks, California 91362-2903 • (805) 449-2121 • FAX (805) 449-2125 Printed on recycled paper Honorable John R. Smiley Re: Response to 2005-2006 Grand Jury Report - Thousand Oaks City Council July 19, 2006

It was suggested by numerous citizens and newspaper accounts that the termination of the City Manager had been "coerced" by Councilman Fox in service of a political agenda. City response – Disagree. It is possible that several citizens and newspaper stories expressed opinions as to what individual Councilmembers may have said or done. However, this Finding represents one hypothesis as to what may have happened. It does not represent a fact supported by specific evidence.

In a letter to the Editor of the Thousand Oaks Acorn on April 7, 2005, Councilman Fox called for Mr. Gatch to resign stating that "management of the city needed to go in a different direction, possibly with someone who is younger and has more energy." City response – Disagree. Councilmember Fox did not write a letter to the editor concerning the resignation of Mr. Gatch.

Based on public statements of other Council members, it was likely that Councilman Fox believed that he knew their positions on the issue of the City Manager's performance. City response - Disagree. This Finding represents a hypothesis, based on speculation, conjecture, and/or opinion. It does not represent a fact supported by specific evidence.

TOMC §2-1.208 provides that the "City Manager shall take orders and instructions from the Council, as a body, only when sitting in a duly held meeting of the Council, and no individual Council member shall give any orders or instructions to the City Manager. This shall not be construed to prevent any Council member from discussing matters of the City with the City Manager and staff." City response - Concur in part. The last sentence of TOMC Section 2-1.208 is not quoted correctly. The last sentence should read: "The provisions of this section shall not be construed to prevent any Councilmember from discussing matters of the City with the City Manager and staff." 2100 Thousand Oaks Boulevard • Thousand Oaks, California 91362-2903 • (805) 449-2121 • FAX (805) 449-2125 📞 🔰 Printed on recycled paper Honorable John R. Smiley Re: Response to 2005-2006 Grand Jury Report - Thousand Oaks City Council July 19, 2006

Because Mr. Gatch felt threatened and pressured and believed that Councilman Fox was speaking on behalf of the majority of the Council, he complied instead of insisting on adherence to the TOMC procedure. City response – Disagree This Finding represents a hypothesis, based on speculation, conjecture, and/or opinion. Mr. Gatch did resign from the City. There is no way for Councilmembers to know specifically why Mr. Gatch acted as stated in this Finding since Mr. Gatch never made such a statement in open session to the full City Council. Furthermore, Mr. Gatch's statement in Finding F-17 ("...stating that Councilman Fox 'implied' he had enough votes to have him fired.") contradicts this Finding.

City Manager Gatch resigned effective June 30, 2005, under the threat of being fired, took a leave of absence, and vacated the City Manager's office effective May 6, 2005. It was understood and agreed that this retirement would not nullify or void the terms of compensation and benefits of his Employment Agreement dated July 13, 2004. City response – Concur in part. Mr. Gatch did resign effective June 30, 2005 and entered into a Termination Agreement. However, the written record does not support the "threat of being fired."

The Council voted to support an investigation by the District Attorney or Attorney General of possible Brown Act violations by members of the City Council. The investigation would include the Council and related staff and cover a period of two years from July, 2003, through July, 2005. City response - Concur in part. The investigation was to cover a period through June 30, 2005.

Scott Mitnick, Interim City Manager, was selected as the new City Manager at the Council's November 15, 2005, meeting. Some Council members wanted to avoid a costly and time-consuming search process for a replacement. The Council was split on the issue of candidate selection. One Council member stated that a candidate search would have been a more fair process. City response - Concur in part. 2100 Thousand Oaks Boulevard • Thousand Oaks, California 91362-2903 • (805) 449-2121 • FAX (805) 449-2125 Printed on recycled paper Honorable John R. Smiley Re: Response to 2005-2006 Grand Jury Report - Thousand Oaks City Council July 19, 2006 On November 15, 2005, City Council appointed Mr. Mitnick as permanent City Manager via a 3-1 vote, with Councilmember Masry absent and Mayor Bill-de la Peña dissenting. It is not accurate to state that the "Council was split on the issue of candidate selection." Three Councilmembers stated that they did not wish to conduct a formal search because they believed Mr. Mitnick was the most qualified candidate. The dissenting Councilmember publicly stated that "It would have been fairer to have a search and to pick the best candidate and Mr. Mitnick probably would have been the best candidate." On December 13, 2005, all four Councilmembers voted unanimously to approve the resolution confirming Mr. Mitnick's City Manager appointment and approve his employment agreement.

The City has no stated policy relative to the recruitment and hiring process for the City Manager. City response – Concur in part. The City's personnel rules, as contained in City's Administrative Policies Manual, address employee selection methods. However, these rules do not apply to "at will" positions such as City Manager and City Attorney. City Council has the option of using the City's employee selection methods as a guideline. Past practice has been for City Council to implement City Manager recruitment and selection on a case-by-case basis.

Numerous citizen complaints were voiced regarding Mr. Mitnick's compensation because it almost doubled his salary as Interim City Manager. City response – Disagree City Council did not receive "numerous" complaints regarding Mr. Mitnick's compensation. Only one public speaker made comments at the December 13, 2005 City Council meeting when City Council voted on Mr. Mitnick's employment agreement. Furthermore, Mr. Mitnick's salary did not "almost double."

When Councilman Masry resigned and subsequently died, his family and others expressed a strong preference for a special election to fill his seat, especially since three years remained of his four-year term. The Council stated their concern about the cost of a special election, based on their own estimate of $250,000, and elected to exercise their option to appoint someone to the vacant seat. ÷ City response - Concur in part. 2100 Thousand Oaks Boulevard • Thousand Oaks, California 91362-2903 • (805) 449-2121 • FAX (805) 449-2125 Printed on recycled paper Honorable John R. Smiley Re: Response to 2005-2006 Grand Jury Report - Thousand Oaks City Council July 19, 2006 City Council did not prepare a cost estimate for holding a special election. City staff passed onto City Council cost estimates provided by Ventura County staff and an elections consultant. These costs varied and were dependent on different special election scenarios.

Although there is no stated policy with respect to the replacement of a Council member, the City has the authority to either appoint or hold a special election. City response – Concur in part. As is the case for the vast majority of General Law cities, City of Thousand Oaks follows State law in determining how to fill a Councilmember vacancy. As is commonly the case for General Law cities, the City of Thousand Oaks does not have a separate ordinance governing filling a Councilmember vacancy. In full compliance with State law, it is up to City Council to determine whether to appoint or hold an election.

Many citizens expressed their concern at the lack of a democratic process (special election) to replace a City Council member. Thus, many citizens were disturbed when the City Council decided to appoint Tom Glancy to fill the seat vacated by Councilman Masry. City response - Concur in part. Residents expressed their opinion with respect to City Council's decision to appoint a person to fill the Councilmember vacancy. Some opinions were opposed to this decision. Some opinions were supportive of this decision. The process used by City Council was legal and democratic. A total of 43 residents applied to fill the Councilmember vacancy and 32 participated in public interviews at the December 13, 2005 City Council meeting. The process used was democratic and is one that is used by other cities, including the City of Simi Valley in December 2004.

After Mr. Glancy was appointed to the City Council, an estimate was received from the Registrar of Voters of $50,000 to hold a special election, instead of the City Council's estimate of $250,000. City response – Disagree. City Council did not prepare a cost estimate for holding a special election. City staff passed onto City Council cost estimates provided by Ventura County staff and an elections These costs varied and were dependent on different special election consultant. scenarios. As explained in the attached December 28, 2005 memo from City Clerk Nancy Dillon (Attachment 2), an outside elections consultant initially estimated that holding an off- 2100 Thousand Oaks Boulevard • Thousand Oaks, California 91362-2903 • (805) 449-2121 • FAX (805) 449-2125 🛂 Printed on recycled paper Honorable John R. Smiley Re: Response to 2005-2006 Grand Jury Report - Thousand Oaks City Council July 19, 2006 cycle, special election in April 2006 would cost over $250,000 and this number was later revised to $150,000 plus internal City costs. Ventura County staff later revised the estimated cost to add a 4th seat to the regular (non-special) November 2006 election from $142,000 to approximately $50,000.

At a Council workshop in July, 2005, the behavior and ethics of Council members, as well as the need for clear rules and enforcement, were discussed. The Council agreed to a code of conduct designed to make their behavior more civil toward one another. The norms, passed unanimously, are also intended to reduce personal attacks, eliminate public reprimands of city staff, and mitigate smears during election campaigns. City response - Concur in part. After going several years without holding a goal setting session, on July 19, 2005, City Council participated in a "Goal Setting Workshop." To assist in the process, an outside facilitator, Mr. Juan Lopez of Amistad Associates, was used. During this workshop, City Council adopted a Mission Statement, Customer Service Philosophy, and ten broad Citywide Goals to help guide the organization. In an effort to improve Councilmember relations and to get past challenges that confronted prior City Councils, City Council adopted the following nine "City Council Norms:" Treat each other and staff respectfully. 2. Follow the rules (Standards of Operation) and adhere to the rules. Mayor to hold speakers accountable and Mayor Pro Tem to hold speakers addressing Mayor accountable. 3. Speak only for yourself; not for other Councilmembers. Do not speak for other Councilmembers in the press. 5. Do not criticize staff in public. 6. Keep comments from wandering into being indirectly critical of other Councilmembers. 7. Do not encourage supporters to come to City Hall to criticize other Councilmembers. 8. Do not make assumptions. 9. Do not question motivations. 2100 Thousand Oaks Boulevard • Thousand Oaks, California 91362-2903 • (805) 449-2121 • FAX (805) 449-2125 Printed on recycled paper Honorable John R. Smiley Re: Response to 2005-2006 Grand Jury Report - Thousand Oaks City Council July 19, 2006 On February 7, 2006, staff provided City Council with a six month update to the July 19, 2005 adopted Mission Statement, Customer Service Philosophy, and ten broad Citywide Goals. City Council concluded that these three tools were working well and then reaffirmed them. In the process, City Council approved 452 specific Objectives to be implemented within the ten broad Citywide Goals. City Council also approved 11 Top Priorities/Projects for staff to implement in Calendar Year 2006. City Council further concluded that the nine Council Norms are working well and that they should remain in place.

TOMC, Chapter 10, § 1-10.01 "...The Code of Ethics for Officials and Employees" (Code of Ethics) requires that "public officials and employees be independent, impartial and responsible to the people; that government decisions and policy be made in the proper channels of the governmental structure; that public office not be used for personal gain; and that the public have confidence in the integrity of its government." City response - Concur in part. This finding does not quote the entire section of TOMC 1-10.01.

Section § 1-10.03 of the Code of Ethics states that "All officials and employees owe a duty of loyalty to the political objectives expressed by the electorate." Further, that "Appointive officials and employees should adhere to the rules of work and performances established as the standards for their positions by the appropriate authority." And finally, that "Officials and employees should not exceed their authority or breach the law, or ask others to do so ..." City response – Concur in part. TOMC Section 1-10.03 reads in full, as follows: "All officials and employees of the City owe a duty of loyalty to the political objectives expressed by the electorate and the programs developed by the Council to attain those objectives. Appointive officials and employees should adhere to the rules of work and performance established as the standards for their positions by the appropriate authority. Officials and employees should not exceed their authority or breach the law, or ask others to do so, and owe a duty to cooperate fully with other public officials and employees unless prohibited from so doing by law or by the officially recognized confidentiality of their work." 2100 Thousand Oaks Boulevard • Thousand Oaks, California 91362-2903 • (805) 449-2121 • FAX (805) 449-2125 Printed on recycled paper Honorable John R. Smiley Re: Response to 2005-2006 Grand Jury Report - Thousand Oaks City Council July 19, 2006 CONCLUSIONS City Council concurs with some of Grand Jury's eight Conclusions on pages 6 and 7. However, some of the Conclusions represent hypotheses based on speculation, conjecture, and opinion, and not supported with specific evidence and/or facts. The City's comments are as follows: C-01. The circumstances leading to the resignation of City Manager Gatch included assertions by Councilmember Fox that a vote to terminate the City Manager was a certainty. Councilmember Fox made those assertions even though no review of the City Manager's continued employment status was included on any City Council meeting agenda immediately prior to that event. This situation can lead easily to an assumption that Councilmember Fox communicated with at least two other City Council members in violation of Brown Act (Government Code § 54952.2). However, the evidence of such a violation of the Brown Act is insufficiently clear to justify the initiation of a formal accusation procedure by the Grand Jury against any member of the Thousand Oaks City Council. (F-01, F-02) City response – Concur in part. The reference to an individual Councilmember making "assertions" to the former City Manager is contradicted by Findings F-17, F-23 and F-26. This Conclusion states that one is easily led to an "assumption" that a Councilmember violated the Brown Act. However, in the very next sentence it is explained that there is not sufficient evidence or facts to support this. As explained in the Summary Section, the District Attorney determined that Brown Act violations did not take place. C-03. The actions of Councilman Fox giving specific directives and communications to City Manager Gatch outside of a duly-held City Council meeting, pressuring him to resign, may give the appearance of being in violation of TOMC § 2- 1.208. (F-01, F-02, F-04) City response - Disagree. Because the City Manager serves at the pleasure of City Council, his/her position is often tenuous and it is not uncommon for individual Councilmembers to share their personal views with the City Manager, including suggesting their displeasure with the City Manager's performance. Doing so is not in violation of TOMC §2-1.208. Further, and as noted in the Summary section, the Grand Jury found that there was no evidence of any violations of the TOMC. 2100 Thousand Oaks Boulevard • Thousand Oaks, California 91362-2903 • (805) 449-2121 • FAX (805) 449-2125 Printed on recycled paper Honorable John R. Smiley Re: Response to 2005-2006 Grand Jury Report - Thousand Oaks City Council July 19, 2006 C-05. The city government of Thousand Oaks often gives the appearance that it fails to operate transparently and professionally. There is a perception that many decisions are decided in advance of City Council meetings and that the meetings are essentially a public formality. Three specific examples are: 1) the forced resignation of City Manager Gatch; 2) the recruitment process of a new City Manager; and 3) the decision not to hold an election to replace Councilman Masry, even though three years remained on his term of office. (F-01, F-02, F-04, F-10, F-13 through F-21, F-28, F-31 through F-36, F-28 through F-44). City response – Disagree. This Conclusion is a hypothesis based on speculation, conjecture, and opinion. As explained in the City's response to F-42, City Council has taken significant steps over the past year to improve how the City Council interacts with itself and others, especially at City Council meetings. City Council has worked exceptionally well over the past year. The tenor of Council meetings has improved significantly. Stability and professionalism have been restored to city hall. Employee morale has improved considerably. Thousand Oaks City Council meetings are as open and transparent as any other local government in Ventura County. With respect to the three examples provided in this Conclusion, the first two (resignation of former City Manager and appointment of the new City Manager) involved personnel matters which were the subject of legally and appropriately agendized City Council closed session meetings. It is true that City Council's decisions concerning personnel matters are not made in public view. The public, as many Thousand Oaks residents did so, does have the right to address City Council prior to City Council going into a closed session. The third example (filing the vacant Councilmember seat) was openly discussed at a publicly agendized meeting. A public perception of underhandedness, poor judgment, and lack of C-06. professionalism exists with respect to the resignation of City Manager Gatch that resulted in a rush to judgment when other options were readily available. (F-14 through F-22, F-24 through F-28, F-32, F-33). City response - Disagree. There were other options available to both City Council and Mr. Gatch. However, this Conclusion is not supported by the Findings. This represents a hypothesis based on speculation, conjecture, and opinion, and not based on specific evidence or facts. 2100 Thousand Oaks Boulevard • Thousand Oaks, California 91362-2903 • (805) 449-2121 • FAX (805) 449-2125 🛴 🔊 Printed on recycled paper Honorable John R. Smiley Re: Response to 2005-2006 Grand Jury Report - Thousand Oaks City Council July 19, 2006 C-07. The City Council could have easily reviewed the City Manager's performance in closed session and given him the opportunity to resign or be fired. (F-08 through F-14) City response - Disagree. The position of City Manager was discussed by City Council in closed session meetings. The prior City Manager did resign. C-08. The City Council's history of adversarial relationships, lack of cooperation, internal strife and acrimony, insulting citizenry, and extreme and disrespectful rhetoric has been well-documented for over a decade. (F-15, F-17 through F- 22, F-27, F-28, F-33 through F-38) City response - Concur in part. While it may be true that prior City Councils had a "...history of adversarial relationships, lack of cooperation, internal strife and acrimony, insulting citizenry, and extreme and disrespectful rhetoric [which] has been well-documented for over a decade," this is clearly not the case with respect to the current City Council. As explained in the City's response to Conclusion C-05 and Finding F-42, the current City Council has taken significant steps over the past year to improve how Councilmembers interact with each other, staff, and members of the public, especially at City Council meetings. City Council also obtained the use of an outside facilitator. City Council has worked exceptionally well over the past year. The tenor of Council meetings has improved significantly. Prior "adversarial relationships" have been converted into positive and constructive relationships. Prior "lack of cooperation" has been converted into a greater willingness to listen and trust one another. Prior "internal strife and acrimony" has been replaced by a desire for Councilmembers to work in harmony and with each other. The number, and volume, of citizens openly criticizing City Council has dropped significantly. The "extreme and disrespectful rhetoric" of the past is just that - in the past. As pointed out in Findings F-42 and F-43, City Council recently adopted Council Norms to ensure that the problems of previous City Councils do not repeat themselves. Both City Council and staff are strongly committed to ensuring that these Norms are fully adhered to. 2100 Thousand Oaks Boulevard • Thousand Oaks, California 91362-2903 • (805) 449-2121 • FAX (805) 449-2125 Printed on recycled paper Honorable John R. Smiley Re: Response to 2005-2006 Grand Jury Report - Thousand Oaks City Council July 19, 2006 RECOMMENDATIONS City Council has implemented three of the Grand Jury's four Recommendations on . The City's comments are as follows: