With the days counting down until a new mayor takes office, the city of Sacramento may also lose its long-standing city manager.
Amid a so-far unsuccessful effort to get a raise this year, and a new mayor being elected, Sacramento City Manager Howard Chan appears to be playing hardball.
Tuesday’s City Council agenda, posted online Thursday, contains an item to require the new council, minutes after being sworn in, to consider extending Chan’s contract. It would also remove a clause that says if he is going to quit, he has to give a 60-day notice or he loses the ability to effectively stay on city payroll for the next year.
The contract between the city and Chan is set to expire Dec. 31, stated the staff report. Chan has requested an extension until Dec. 31, 2025.
“With the appointment of a new mayor and two new council members occurring in early December 2024, the parties agree that it was important to delay the vote on the extension request until the new mayor and council members were seated and could vote on the item,” the staff report stated . “Accordingly, these proposed contract amendments will ensure that the status quo remains in place until the vote on the extension can occur and sets that date for the mayor and City Council to consider and vote on the requested extension.”
After the agenda was posted, Councilwoman Katie Valenzuela and mayoral candidate Flojaune Cofer swiftly blasted the agenda item.
“The fact the council is considering inserting this item on to a future council’s agenda is outrageous,” said Valenzuela, whose term ends Dec. 10 and who has endorsed Cofer. “This action is currently reserved for the mayor, and the incoming mayor deserves an opportunity to decide if they want to take up the city manager’s contract when they take office. Changing the rules at this stage of the game is simply outrageous.”
Cofer called the move manipulative.
“Underhanded moves like this are exactly why we need a new style of leadership in City Hall,” Cofer said. “Mayor Darrell Steinberg is trying to mold (mayoral opponent) Kevin McCarty — who he endorsed — into a Steinberg third term. If the mayor doesn’t want to put this on the agenda for the current council, the new council deserves to be able to thoughtfully make this important decision together on their own timeline without political manipulation.”
McCarty said he opposes the item.
“I would be opposed to having the city manager’s contract on the (Dec. 10) agenda,” McCarty said in a statement via spokesman Andrew Acosta. “New members of the council are being sworn in that night and this issue deserves a thoughtful discussion.”
In a statement, Steinberg said he wants to leave the decision in the hands of the future mayor and council.
“I understand that we are in the heart of political and campaign season. I stand strongly by my recommendation, backed by the vast majority of my colleagues, to let the upcoming mayor and city council exercise their power and authority in deciding on any contract issues related to the city manager, Steinberg said. “When I was elected in 2016, the old city council gave me and the new council that same courtesy, and I believe it is the right thing to do.”
The item follows letters sent by business and city union leaders this week to council members asking them to extend Chan’s contract for a year, through the end of 2025. Chan could work without a contract, as city unions often do during negotiations.
If he does work without a contract, or quits with less than a 60-day notice, Chan would no longer be able to exercise a clause in the contract that would allow him to stay on city payroll for a year afterward, said Amy Williams, Chan’s chief of staff.
A letter signed by leaders of eight business groups infers Chan could be considering quitting if the council doesn’t extend his contract soon.
“Howard’s responsiveness, transparency, and focus on practical solutions have made him a trusted and effective leader,” the letter stated. “We strongly encourage the council to renew Howard Chan’s contract for at least another year. His continued presence as City Manager will ensure the ongoing success of the partnerships between the city and our (organizations) and allow us to build upon the solid foundation we have established under his leadership.”
The letter is signed by the leaders of Downtown Sacramento Partnership, Midtown Association, Tower District, Mack Road Partnership, Stockton Boulevard Partnership, R Street Partnership, the Power Inn Alliance and The River District.
A similar letter from city unions that represent police officers, firefighters and managers echoed similar language about not wanting to work with both a new mayor and city manager.
“(We) wish to express a growing concern over the potential simultaneous loss of two of the most important leaders in the city of Sacramento,” the Sunday letter stated.
Chan earned $593,240 in total wages last year — more than Gov. Gavin Newsom and any other city manager in the state. The council in December awarded Chan a raise, then rescinded it in January after The Sacramento Bee reported the council had violated the Brown Act. The council has not granted Chan a raise since, but has discussed his “performance” during three private meetings since.
In addition to the mayor, there will be two new members of council come Dec. 10 — Phil Pluckebaum, supported by Chan, replacing Valenzuela, and either Stephen Walton or Roger Dickinson replacing interim Councilman Shoun Thao.
Chan, through Williams, declined comment for this story.
Chan has been city manager since 2016, for the entirety of Steinberg’s term. A new city manager would be hired by the council, likely following a nationwide search or by promoting a current assistant city manager.
Another Brown Act violation?
The item on Tuesday’s open session agenda follows a lengthy closed session to discuss a “performance evaluation” for Chan.
Under the Brown Act, the state’s transparency law, councils are allowed to shut the public out of discussions about an employee’s performance, but nothing about compensation unless it’s negative and disciplinary.
“Closed sessions held pursuant to this subdivision shall not include discussion or action on proposed compensation except for a reduction of compensation that results from the imposition of discipline,” the act states.
Compensation is not limited to formal salary increases, said David Loy, an attorney specializing in the Brown Act with the First Amendment Coalition.
“Compensation is compensation,” Loy said. “That includes contingencies on what they get paid if certain things happen. And when in doubt, they should err on the side of transparency.”
Valenzuela said the closed discussion Tuesday was about Chan’s contract and was not about whether to fire or discipline him.
The over-hour long closed session caused the council to be 24 minutes late to start the open meeting, while groups waited in the chambers to celebrate Indigenous Peoples’ Day and Filipino American Heritage Month.
The next meeting will take place at 2 p.m. Tuesday.
New information has become available since this story was first published. This story has been updated.
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