Riverside mayor sues his own city in battle over ‘expensive’ city manager’s contract

The Press-Enterprise | March 12, 2018 – 

Riverside Mayor Rusty Bailey is suing the city he leads, saying the nearly unprecedented step was needed to prevent “calamity” if his veto of City Manager John Russo’s new employment contract is ignored.

The city attorney and a majority of the City Council say Bailey doesn’t have the power to veto Russo’s contract. Instead, they’ve begun following the terms of the agreement, which Bailey contends is poorly timed and too expensive.

“I obviously don’t agree with the contract for the reasons I’ve stated, but this is about protecting the fundamental principles of our government: the checks and balances,” Bailey said by phone Monday.

He filed a petition in Riverside Superior Court on Friday, March 9, seeking a temporary restraining order stopping the city from following the provisions of the new employment contract unless the City Council votes to override Bailey’s veto. The petition also asks a judge to find that City Attorney Gary Geuss and his staff, as well as anyone they might hire, are disqualified from offering counsel regarding the contract or veto because of what Bailey contends is a conflict of interest.

“This is to preserve the checks and balances established by the charter and the democratic processes of the city of Riverside now and for the benefit of the future,” says the lawsuit, filed by the Riverside-based law firm Thompson & Colegate.

Since Bailey ended the Feb. 6 City Council meeting by declaring he was vetoing Russo’s new 7-year employment contract — which the council approved 5-2 — Riverside officials have been split over whether the city charter allowed the veto.

The new contract extends Russo’s term for seven years, with 3 percent raises each year, and also includes a 15-year, $675,000, home loan. But city administrators maintain that it doesn’t cost taxpayers any more than Russo’s previous, $323,946-per-year deal, which also includes 3 percent raises but ended in 2020, in part because it limits how much vacation and administrative leave Russo can cash out.

Bringing the dispute into court is unfortunate, said Councilman Mike Soubirous, a defender of Russo’s contract.

“It’s disruptive and a distraction,” Soubirous said, pointing to a finding by an earlier city attorney that the mayor couldn’t veto contract questions for the city manager. “In essence, if he has the veto power as well, then he has control of the city manager, city attorney and city clerk.”

The legal question comes down to two sections of the city’s charter.

The document, which is essentially the city’s constitution, says that the mayor may veto any formal action of the City Council, except an emergency ordinance, the annual budget or an ordinance proposed by initiative petition. But it also says “the city manager shall serve at the pleasure of the City Council.”

When Bailey attempted to veto the contract — holding a legal opinion that he did have that authority, despite what Guess and another outside attorney said — Geuss told him his remedy would be to go to court.

When Bailey attempted to convince council members to schedule a hearing on the veto, they voted 4-2 to stand with the city attorney’s position.

The charter says the council must vote on whether to override a veto between 30 and 60 days after the veto is made. Friday, the day the lawsuit was filed, marked 30 days.

The lawsuit contends that the city attorney — and anyone who works for him — can’t give an objective opinion because the same conflict over whether the mayor may veto a so-called charter officer contract applies to the city attorney and city clerk.

“This creates a conflict of interest in the city attorney because the resolution of this dispute over the veto of the contract for the city manager has the potential also of insulating the city attorney from scrutiny by the mayor (petitioner) in the future when it comes to his own employment contract,” the lawsuit states.

Russo and Geuss could not be reached for comment Monday.

A veto by the seven-member council takes five votes to override, so reversing the contract would require both a finding that the veto was valid and changing the mind of at least one of the five council members who voted for it.

Councilman Mike Gardner, who voted for the contract in February, said he would consider the timing when deciding whether to change his vote. And he said Bailey was making the right choice.

“Personally, I would have preferred that he just accept the result as it was done, but if he wants to challenge it, this is the right way to do it, and I applaud him for taking that route,” Gardner said. “It’s a legal question. It belongs in court, not social media.”

It’s not clear when the case might be heard.

Bailey, who said he is raising donations to pay for his side of the lawsuit without using public funds, said the city could avoid the conflict by scheduling a vote on his veto. If five members vote to override the veto, he’ll accept the result, he said.

Council members have said they’re unwilling to do that because it would set the precedent that the mayor can veto such actions, which they believe would violate the charter and make the city manager accountable to the mayor at council members’ expense.

“They (the City Council) still can have an override hearing,” Bailey said. “If they just do that, it’ll avoid this constitutional crisis.”

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