City of Carmel-by-the-sea P.o. Box Cc Carmel-by-the-Sea, Ca*

Conclusions 24

• CL1
  In the time period noted above, City operations were undisciplined, as City policies were outdated, nonexistent or ignored. With several empty Department director positions, employees worked hard to keep up and paid little attention to standard municipal procedures. Response: Since the time period noted above, the City Administrator had conducted an organizational review. The basic conclusion of this review was that, prior to 2012, each department had been asked to handle much of its own HR, IT, procurement and contract compliance. This was not judged to be a good delegation of responsibilities, especially given the complexities involved. Instead the City Administrator recommended a more centralized approach to each and the city was reorganized accordingly. Recruitments were initiated to fill key vacancies, notably for "several empty Department director positions." The City Administrator hired or promoted several employees. The current City Administrator and the City Council continue to find and correct areas of city operations where city policies are "outdated, nonexistent or are ignored."
• CL2
  In the time period noted above, there were serious flaws and vulnerabilities in network system security, placing the City at risk financially and legally. Response: The City Administrator has recruited and hired an IT director who is now onboard and working to address the IT system including a plan appropriate for the size and complexity of the Carmel-by-the-Sea government organization.
• CL3
  In the time period noted above, contracts were mismanaged with regard to public bidding, purchase order processing, and services provided with expired contracts. Response: Since the time period noted above, the City Council has updated the purchasing policy and has requested staff to come back with an even more systematic review of the policy and its implementation, drawing on the best practices of similar organizations throughout the state for "public bidding" and "purchase order processing." Staff has brought forward "expired Response to MCCGJ September 1, 2015 contracts" on a regular basis for City Council review and the City Council has brought those contracts up to date. The Respondent will continue doing so until all "expired contracts" have been brought into compliance with our municipal code and policies. The City Administrator has assigned a senior manager to oversee public bidding, purchasing and contract compliance.
• CL4
  In the time period noted above, the City Council was not provided with contract payment schedules or accumulated payment tracking reports. Response: In the time period noted above, the City Council and community were provided with the check register. This format, while essential, does not provide for an easy way to spot trends, see the larger financial landscape or monitor "contract payment schedules or accumulated payment tracking reports." Since the time period noted above, the City Council budgeted for new financial software and, consistent with City Council direction, the City Administrator has made such software a high priority of our new IT manager. As an interim measure, the check register now includes "contract payment schedules" and "accumulated payment tracking reports" for the larger contracts and the City Council receives quarterly financial reports.
• CL5
  In the time period noted above, the Human Resources process was mismanaged with regard to pay grades, progressive discipline, and proper staff training, and was lacking in leadership. Response: In the time period noted above individual departments managed their own Human Resources. This system did not work well and the City Council budgeted for filling the HR position. A recent recruitment failed to find a qualified candidate and the recruitment continues. The new HR manager will provide the "leadership," "proper staff training," and appropriate "progressive discipline." The City Administrator and the City Attorney have also employed the services of an outside labor law attorney, reflecting the complex nature of labor law in California.
• CL6
  In the time period noted above, the Public Records Act request process was unstructured, noncompliant, and ad hoc. RESPONSE: The Respondent agrees in part and disagrees in part. The large majority of Public Record Act requests were immediately processed and responded to by the City Clerk. If the City Clerk had a question or a concern, the process had been that the Clerk conferred with the City Attorney prior to issuing the response. City agrees this process was not followed by all members of the City Staff at a later time and was instead referred to outside law firms without consulting with the City Attorney. The City Council adopted a new policy regarding Public Record Act requests. Response to MCCGJ September 1, 2015
• CL7
  The Mayor and City Council did not fully execute their responsibilities of inquiry and oversight. RESPONSE: The Respondent disagrees. The City of Carmel by the Sea is a General Law city established pursuant to the California Government Code 34102 et. Seq. and is commonly referred to as a Council/Manager form of government. In a Council/Manager form of government, the City Manager has the power to administer the day-to-day affairs of the city, including the power to hire and fire employees and perform such other functions as the City Council directs. The Mayor and City Council members in a General Law city provide policy direction and are not authorized to involve themselves in employee matters. When the Mayor and members of the City Council did exercise their power of inquiry, the information requested was not forthcoming or was inaccurate.
• CL8
  Neither the Mayor nor the City Council members received any formal training or substantive orientation on the responsibilities of their positions. RESPONSE: The Respondent disagrees. The Mayor as well as members of the City Council have attended various workshops sponsored by the League of California Cities on a variety of subjects regarding the role of a city council member as well as a number of other workshops on municipal governance. In addition, the Mayor and members of the City Council have attended the mandatory class every two years regarding AB 1234, as well as local training workshops dealing with the Ralph M. Brown Act, Public Records, Conflicts of Interest and decision making.
• CL9
  The Mayor and the City Council members were more responsive to political pressure than to the need for effective governance. RESPONSE: The Respondent disagrees. The Mayor and City Council members are elected representatives of the Carmel by the Sea community and as such are responsible to the community. Being responsive to the community is a major part of their commitment to serve as a public servant and is an integral part of governance.
• CL10
  AND F11 THE MCCGJ EXEMPTED F10 AND F11 FROM REQUESTED RESPONSE.
• CL11
  There was no credible evidence to support allegations of contract splitting, cronyism or any other wrongdoing under Mr. Stilwell or Ms. Paul. RESPONSE: The Respondent cannot speak to the evidence reviewed or the content of the interviews since it was not present during the Civil Grand Jury interviews. The City refers the Civil Grand Jury to the independent review of contracts by attorney Stephanie Atigh. The City Response to MCCGJ September 1, 2015 also refers the Civil Grand Jury to Paragraph 9 of the Separation Agreement and Release between Mr. Stilwell and the City which states as follows: 9. Professional Reputation. City shall refrain from any statements, public or private, concerning Employee which would have the effect of damaging his professional reputation or personal character."
• CL12
  The General Law/Weak Mayor structure was often misunderstood by Carmel citizens and the City Council. RESPONSE: The Respondent cannot comment, either agreeing or disagreeing, as there is no information or polling data on which to base a response.
• CL13
  THE MCCGJ EXEMPTED F14 FROM REQUESTED RESPONSE
• CL14
  The governance and administration of the City is unduly influenced by the reportorial and editorial practices of The Carmel Pine Cone. RESPONSE: The Respondent wholly disagrees. The City Council has taken numerous actions which have been editorially criticized by The Carmel Pine Cone. Response to MCCGJ September 1, 2015
• CL15
  The position of City Treasurer is underutilized and so provides little benefit to the City. RESPONSE: The Respondent wholly disagrees and this recommendation will not be implemented. The duties, roles and responsibilities of the Office of City Treasurer are aptly listed in Government Code Section 41001-007 and are very specific on the limited role of the City Treasurer.
• CL16
  The City Treasurer was isolated from any meaningful role in the contract/invoice disbursements and tracking system. RESPONSE: The Respondent partially disagrees, as to have (or had) the City Treasurer engaged in the aforementioned role would have been partially contrary to the separation of duties between the City's finance and contracts employees and the duties of the Treasurer. State Law specifies that the Treasurer shall monthly report to the "legislative body" providing an "... accounting of all receipts, disbursements, and fund balances." The Treasurer has no role in contracts.
• CL17
  There was no evidence of any systematic review of contracts in excess of $25,000 by legal counsel as to form or content. RESPONSE: The Respondent agrees and disagrees in part. Prior to the dates in question, the City Attorney reviewed contracts and provided approval or recommended changes which were then incorporated into the contracts. During the time period in question, Administrative Staff referred some contracts to the City Attorney for review and comment which were later revised or amended without further City Attorney review.
• CL18
  A significant amount of money is spent on outside counsel as it supplements the City Attorney position in numerous matters including but not limited to labor and employment concerns, public records requests, general business and facilities, joint powers agreements, municipal law, and miscellaneous lawsuits. RESPONSE: The Respondent agrees. (See response to Recommendation #R14.)
• CL19
  Historical averages of amounts spent on outside legal services over the past five years would support a full-time City Attorney and staff where such attorney would have experience in contracts, employment matters, and Public Records Act requests, as well as municipal law. RESPONSE: The Respondent disagrees. See Response to Recommendation #R14. Response to MCCGJ September 1, 2015
• CL20
  The City Council seriously failed to exercise its power of inquiry in its decision-making process regarding rehires, by excluding the City's outside defense counsel from the process and by negotiating hasty settlements of claims in the early or pre-litigation stages, which precluded any meaningful scrutiny of these employment issues. RESPONSE: The Respondent wholly disagrees. The City Attorney had discussions with the outside counsel referenced by the Civil Grand Jury who was retained to represent the City in the termination matters involving the employees. Due to the fact that the City Administrator had been verbally approved for substitution as the hearing officer in the Fenton termination appeal, he could not discuss the case with the defense attorney as it would have constituted ex-parte contact. He did converse frequently with the outside counsel who represented Mr. Stilwell when he served as the hearing officer in the four day Fenton hearings in June 2014. The settlements were not "hasty." The City Attorney and City Administrator had daily conversations on these personnel matters (including weekends), consulted with both private practice and municipal attorneys, met with attorneys representing the terminated employees, reviewed the personnel files, notes from the Skelly hearings, read the Fenton hearing transcripts of over 400 pages, and reviewed the written and stated causes contained in the termination correspondence. The City Attorney and City Administrator made recommendations to the City Council based upon their independent reviews of this information. It is ironic that the Civil Grand Jury states these efforts to bring fairness to the unnecessary firing of four long time employees was "hasty" since a private practice attorney retained by the City and involved in these termination matters told the City Administrator on 19 February 2015 that the decision process for ending the careers of the employees was "very aggressive" for the alleged offenses. Response to MCCGJ September 1, 2015
• CL21
  "Cities with in-house (full time) City Attorney staff generally still use outside counsel for specialized services, particularly litigation."
• CL22
  "Contemplation of an in-house (full time) City Attorney Office must also plan and budget for support staff. The benchmark data includes a minimum of one administrative position would be required, such as a legal secretary, and at least a part-time paralegal."
• CL23
  "Non-personnel costs for a City Attorney Office (full time) include mandatory State Bar dues, recommended practice area section memberships, professional memberships, mandatory continuing legal education, office supplies, subscriptions, conference and travel, law library and books and subscriptions, automated legal research (Westlaw or Lexis), computers and software licenses, minor capital outlays and other similar legal office expenses." "A budget for an in-house (full time) City Attorney Office would also include contract costs for specialized outside counsel...."
• CL24
  "Transitioning to in-house (full time) City Attorney services would also involve certain startup costs, such as recruitment, one-time purchase of equipment and furniture, law office materials, books and supplies, and other start-up expenses." R15 The City Attorney manage the selection, and oversee the engagement of outside legal counsel, including the review and approval of their billings. RESPONSE: The Respondent agrees and this has been implemented. Response to MCCGJ September 1, 2015 EXHIBIT - A July 5, 2015