Sacramento City Manager Howard Chan’s obsession with his pay has consumed the Sacramento City Council and proves that the unelected Chan is far more powerful than the combined force of nine council members elected by voters
On Tuesday, there will be yet another council discussion initiated by Chan, who wants another guaranteed year on the job. But the size of Chan’s salary does not fully capture what is happening here.
Opinion
Among the many problems with this scenario are how rapidly his pay has increased, the extravagance of the perks he’s gotten, how often Chan has demanded even more — at least once illegally — and how the Sacramento City Council has been powerless to rebuff him.
During the span from 2017 to 2022, Chan’s base salary jumped more than 42%, from $282,060 to $400,652. In early 2022, Chan was awarded 58 weeks of “management leave” that he could cash out at any time. That’s 2,320 hours. Later in 2022, Chan was given six more weeks of leave, netting 64 weeks in all, that he could cash out whenever he wanted.
By 2023, he was the highest-paid city manager in California. In late 2023, Chan asked for 5% more in salary and another six weeks of vacation, which the council gave to him. Then The Bee reported that the council had taken its action in violation of the Brown Act , which guarantees transparency in government meetings and records.
By 2024, some members of the council didn’t want to deal with this issue any longer, but Chan did .
Chan supporters are insistent
Behind closed doors, the council has been bogged down with Chan’s contract talks for weeks. He simply will not take “no” for an answer. Business and labor leaders have been lobbying council members incessantly to appease Chan.
Last week, when I asked to speak to Chan, I was instead called by a political operative who sought to direct me to Chan supporters. When I told the operative that I would only speak to him on the record, he declined.
Neither Chan nor his enablers seem to want to discuss how they are nullifying city council members elected by the people. Special interests lobby for themselves all the time, but this situation isn’t simply about lobbying, It’s about controlling.
This past Tuesday, the council held a closed-session performance evaluation of Chan. Under the state’s Brown Act open meeting law, the only permissible conversation about compensation during such an evaluation is whether to reduce his pay due to a performance concern. So the council may have broken the law again while debating a longer contract for Chan.
It does not appear that there are enough votes on this council to grant Chan another year on his contract or a raise. But the same council may be willing to punt the issue to the next mayor and council rather than risk losing Chan.
Mayoral candidates unhappy
That is outgoing Mayor Darrell Steinberg’s emerging strategy. On Tuesday, he will propose that the next mayor and new city council take up the Chan issue at its normally ceremonial first meeting on Dec. 10, when new council members traditionally take the oath of office and pose for photos with family members and friends.
“I have been consistent that the upcoming mayor and city council should have the right to decide on any contract issues related to the city manager,” Steinberg said.
Neither of the candidates running to replace Steinberg likes his idea..
“Underhanded moves like this are exactly why we need a new style of leadership at City Hall,” mayoral candidate Flojaune Cofer said. “The new council deserves to be able to thoughtfully make this important decision together on their own timeline without political manipulation.”
As for mayoral candidate Kevin McCarty, “I would be opposed to having the city manager’s contract on the (Dec. 10) agenda,” he said in a statement via spokesman Andrew Acosta to The Bee’s Theresa Clift. “New members of the council are being sworn in that night and this issue deserves a thoughtful discussion.”
What a mess.
Driving the timing of this debate is a section of Chan’s seven-year-old (and often-amended) contract that forces him by month’s end to quit his job and guarantee himself another year’s pay at the top assistant city manager salary of more than $340,000. Steinberg has long wanted the next mayor to have the choice of keeping Chan or selecting a new city manager, just how Steinberg ended up selecting Chan.
With the prospect of Sacramento having no city manager come December, Steinberg is essentially proposing to freeze the status quo until Cofer or McCarty takes office.
Steinberg tries to fix it
Steinberg’s proposal eliminates the contract requirement for Chan to make any decision in the coming weeks about quitting his job to be guaranteed another year’s pay. Second, it requires this council to place Chan’s proposed contract extension on the next mayor’s first meeting agenda, stripping the new mayor of the discretion he or she normally has to set the meeting’s agenda.
“I’m outraged. I’m flabbergasted,” City Councilwoman Katie Valenzuela said Thursday. “This is highly unfair, not only to the next council but to the next mayor.”
The origins of this idea reek of secrecy and possible illegality. David Loy, an attorney for the California First Amendment Coalition, said that a confidential performance evaluation meeting must be confined to just that, performance. “Closed sessions cannot include discussion or action on proposed compensation,” Loy said.
Valenzuela was concerned in June that a closed session held that month about the city manager’s performance wandered into a salary discussion .
Was the law broken or not?
Asked if the city council can discuss Chan’s contract in a private performance evaluation, City Attorney Susana Alcala Wood said, “In the course of the Council conducting a performance evaluation, all issues concerning an employee’s performance and tenure are appropriately and necessarily discussed with the employee, regardless of whether there is an employment agreement or not. Any decisions on a contract, including decisions concerning compensation must be made at a noticed, regular meeting of the city council.”
If Alcala Wood thinks that Chan can negotiate a better contract during a closed session about his performance, she should just say that in plain English. It was only a few months earlier that Alcala Wood, in an open session, made clear that no city officer — including Chan — can directly discuss his compensation with the council in a closed session identified on the council agenda as such. Valenzuela publicly posed the question. “The charter officer….would not be in the room,” Alcala Wood said.
So what is the truth? Did the council break the law again? Do Chan, Alcala Wood and others even care anymore?
Valenzuela said that nearly all of Tuesday’s closed session on Chan was about his contract — not his performance.
Chan’s contract is written so broadly that it basically gives him another year’s pay for doing nothing as an assistant city manager. If he refused to show up to work and got fired, he would still get paid. “If Employee is terminated from the Assistant City Manager position within one year of assuming that position, Employee will receive the remainder of the Employee’s then-current salary from the date of termination through the end of the one-year term,” his term reads.
If Chan were to quit today, he would have essentially gotten nine years’ worth of pay from the council for seven years of work. He would get this additional year’s pay per his contract. And in 2022, thanks to Steinberg and the council, he was granted that stunning 64 weeks of extra paid leave that he has been eligible to cash in as extra pay. This exceedingly generous bonus has made Chan the highest-paid city manager in California for the past two years.
Chan is utterly expendable. It’s a reality of the temporary nature of the job. This situation now, however, is beyond toxic. It shows that the Sacramento City Council is not the boss of Chan. It’s the other way around.
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