The Press-Enterprise | February 8, 2018 –
Riverside City Manager John Russo’s new seven-year contract with yearly 3 percent raises and a $675,000 home loan went into effect Wednesday, Feb. 6 — but Mayor Rusty Bailey said he may sue to stop the deal.
Bailey ended the City Council meeting Tuesday, Feb. 6, by issuing the city’s first veto since 1993 to prevent the new contract, which he said set a bad example when citywide budget cuts are planned. But Riverside City Attorney Gary Geuss said the city charter doesn’t allow the veto.
Bailey said Wednesday, Feb. 7, that he’s spoken with a private attorney and might file a lawsuit to enforce the veto.
Earlier Tuesday, Russo got 5-2 City Council approval for a new seven-year contract that the top administrator said was needed to stop top staff from fleeing what they would see as an unstable, unsupportive council. Councilmen Chuck Conder and Jim Perry voted no.
Hours later, immediately before adjourning the meeting, Bailey announced he was vetoing the decision.
“All told, this is bad timing, bad business and bad policy, and it sends a very bad message to our community,” Bailey said Wednesday. “It is for these very reasons that I am calling on our city manager to honor his existing contract, our City Council to uphold this veto and our residents to engage with their representatives in support of this veto.”
Geuss insisted Tuesday night that Bailey didn’t have power over “charter officers” — the city manager, city attorney and city clerk.
“With all due respect to the mayor, there is no authority under the charter for a veto of a charter officer contract,” Geuss said. “… That is the opinion of your only legal representative here.”
Geuss added that Bailey would have to take the issue to court if he wished.
City Clerk Colleen Nicol said Wednesday morning that the contract would be executed that day. That makes the contract’s terms effective as of Jan. 1, 2018.
In a compromise suggested by Councilman Chris Mac Arthur, Russo agreed that his pay for 2018 and 2019 would increase 3 percent per year — the same as his 2015-20 contract — rather than the 4 percent raises for those years called for in the new contract as drafted.
Russo declined an interview Wednesday but said in a statement that he was grateful.
“I am gratified that the council voted for stability in the administration of the city,” Russo said. “Even the two council members who voted against my contract expressed pride and satisfaction with the positive changes at City Hall since the new executive team arrived.”
Riverside’s city charter gives the mayor power to veto “any formal action taken by vote of the City Council including any ordinance or resolution, except an emergency ordinance, the annual budget or an ordinance proposed by initiative petition.” The mayor then has 20 days to provide a written veto message, after which the council could override the veto with five affirmative votes.
Geuss, though, pointed to the charter’s declaration that “the City Manager shall serve at the pleasure of the City Council.”
Geuss and Bailey each have an opinion from an outside attorney backing their position. Several council members criticized Bailey’s veto attempt.
“I think you’re going to throw this city into greater chaos,” Councilman Andy Melendrez said. “I think it’s a bad political move for you. It may be one you feel strongly about – I think we all feel strongly about items we do not have go in our favor – but you are not helping the city. It’s going to stump our progress.”
Russo started as Riverside’s city manager in May 2014.
City officials have largely praised him during that time and agreed to reconsider his contract though it didn’t expire until May 2020.
City officials say the new contract, expiring in December 2024, costs taxpayers the same as his current contract. Russo’s base pay of $323,946 per year increases 3 percent each year unless four council members give him an unsatisfactory performance evaluation.
His total compensation, including benefits, is $415,988, which the database Transparent California lists as the state’s 21st-highest. Riverside has the state’s 12th-highest population.
The salary increase is balanced out by a new limit on how much leave time Russo may take as cash instead of time off, city budget officials said.
The city also agrees to a 15-year, $675,000 loan for Russo’s Riverside home. The interest rate is calculated using the five-year rolling average of the Local Agency Investment Fund.
Council members all stressed that they appreciated Russo’s leadership, but some said now wasn’t the time to extend the contract. The council gave preliminary approval in January to higher utility rates, and the budget to be approved in June is expected to include significant cuts.
“It is critical that people at the top lead from the top,” said Councilman Mike Gardner, who supported the contract after Russo agreed to only 3-percent raises. “If we’re asking our employees to make do with less, you don’t take more. If anything, you should take less.”
Bailey said Wednesday that his veto wasn’t necessarily about the dollar amount. Rather, he opposes the increasing salaries when department heads are being asked to cut costs and the precedent of opening a contract negotiation before it expires.
“What will then stop him from negotiating contracts with assistant city managers mid-term, and then department heads, and so on, and so forth?” Bailey asked. “We cannot create a pyramid of wages and benefits that are already unsustainable at their current levels.”
Earlier, Russo was fiery in defense of the new contract, which he said was about communicating stability.
A 2019 extension would come when four of the seven council seats were up for election, and 2020 would coincide with the mayoral election. Top officials, unsure whether new elected officials would support them, would take other jobs, Russo warned.
“Let’s not kid ourselves,” Russo said Tuesday night. “If we don’t extend my contract, this team will start to break up.”
Bailey said he expected to send his official veto message Thursday.