Chico Taxpayers Association

Two high-level city of Temecula employees were placed on administrative leave due to “differences in management philosophy and goals,” said the city attorney.

City officials have been tight-lipped since giving walking orders to City Manager Bob Johnson on Nov. 13 and Chief Financial Officer Genie Wilson on Nov. 14.

A pair of fired Temecula executives, through a spouse and a mutual friend, has revealed behind-the-scenes discord over city pension and finance issues that played out prior to their abrupt dismissals late last year.

The details surface as new twists in the only upper-echelon purge that has publicly unfolded in Temecula since the affluent, fast-growing community became a city in December 1989. They also sharpen the focus on the salary and benefits that are still being paid to Shawn Nelson, who formally stepped down as Temecula city manager in December 2011.

In a cover letter to the local media, Scott Spencer in early February declared that “…it’s time for the press to honestly expose the corruption at Temecula City Hall.” Spencer describes himself as a business owner and a 20-year resident of the Temecula Valley who is a confidant of Bob Johnson and Genie Wilson, two city administrators who were fired late last year.

Johnson’s wife, Maryann, later e-mailed reporters a four-page account she said points to a “fascinating conspiracy that had obviously been orchestrated behind the scenes for several months.” She warned that rising city pension obligations “will someday seriously compromise” Temecula’s ability to repair and maintain its public buildings and other infrastructure.

The pair of documents – which at times alternate between questions and accusations – netted a mixed response from Johnson’s replacement, two City Council members and Nelson.

The city’s current mayor, Mike Naggar, shrugged off many of the issues raised in the communications from Spencer and Maryann Johnson. Councilwoman Maryann Edwards, who was mayor when Nelson’s contract was amended in July 2009, responded in a similar manner.

“Everything’s above board and transparent,” Edwards said in a mid-February interview. She then referred any further questions to the city attorney.

Interim City Manager Aaron Adams has steered clear of the personnel issues surrounding the dismissals of Johnson and Wilson. But Adams countered that there has been plenty of disclosure and ample public records that detail city finances as well as Nelson’s contract terms and his continuing retirement pay and benefits.

“It’s no secret,” Adams said following a recent council meeting.

Nelson has echoed that perspective.

“It’s very clear what the (employment) contract says,” Nelson said in a telephone interview. “It’s very transparent.”

Nelson said he is proud of his service to Temecula and his retirement package simply reflects the benefits and unpaid leave, unused vacation days and other time off that were in place or had accrued over his approximately 21 years as community services manager, interim city manager and then city manager.

Nelson declined to respond to the questions and allegations that have been raised following the dismissals of Johnson and Wilson. He broke off a sentence during the recent telephone interview after saying: “It’s just disgruntled…”

The layered dispute has unfolded as Nelson’s next career step has led to him simultaneously being paid by both Temecula and Menifee for providing similar services to the two cities.

Together the two municipalities will pay Nelson more than $417,000 over the next 12 months. And due to the terms of Nelson’s Temecula contract, that city will continue to pay his health care, pension, vacation and leave benefits over that period.

Nelson’s contract and the July 2009 changes were a key focus of an eight-page analysis that Spencer provided to local reporters. The sharply-worded analysis was accompanied by attachments that examine Nelson’s various pension scenarios as well as a spread sheet that details the city’s rising pension costs for all its employees.

The analysis refers to city officials or their actions with such biting phrases as “misrepresented,” “problematic past practices” and “did not always fully or transparently disclose.” It also questions whether the council’s authorization of so-called seniority leave for Nelson “may have been something called a gift of public funds.”

The analysis ends with a joint statement from Johnson and Wilson that calls upon the city to be more open and change the way it operates.

“There is an absolute requirement for transparency when it comes to public employee and elected official compensation and benefits,” Johnson and Wilson wrote in the statement. “After all, we are fully accountable to the public in how we are spending their money. We are confident that we provided current Temecula’s leadership with the information they needed to assure that more transparent and responsible management practices, goals and philosophies are being implemented now and into the future. 

We are also hopeful that the information being provided to the public will allow current and future city leaders everywhere to view their fiduciary responsibilities through an entirely new paradigm.”

Naggar, who said he has read Spencer’s materials, indicated that they appeared to be addressed more toward the media than the city. Naggar said he did not see any benefit in sitting down with a reporter to respond to Spencer’s analysis in detail.

The separate dismissals of Johnson, Temecula’s city manager, and Wilson, the city’s finance director, played out during a string of public meetings that began Nov. 14.

Naggar has attributed the terminations to a difference in management philosophy.

“It doesn’t go deeper than that,” he said.

Johnson, whose government service has spanned nearly four decades, worked as a Temecula assistant manager for nearly five years before he was tapped for the city’s top post. He worked as the city manager for less than a year prior to his dismissal. Wilson was a longtime employee who was hired shortly after Temecula became a city.

Johnson was just the fourth person to hold the post of permanent manager since Temecula became a city. His predecessor, Nelson, has been the subject of newspaper headlines since he retired from Temecula, shifted his focus to a nonprofit group formed after the death of his son, and was recently hired by Menifee as a management and strategic planning consultant.

In mid-February, a San Diego-based newspaper group printed a story headlined: “Former city manager’s pension payment focus of dispute.”

That story – done by a reporter for the merged Union-Tribune and Californian – examined the terms of Nelson’s contract and indicate he had had about 2½ years of administrative, sick time and other leave on the books prior to his Temecula retirement. The contract, according to that story and Temecula records, note that Nelson’s contract calls for him to remain an employee on Temecula payroll and be paid $11,214 every two weeks through March 2014.

Nelson’s current position with Temecula, according to budget information, is listed as “advisor to the city manager.” Newspaper coverage leading to Menifee’s decision to hire Nelson as an “executive consultant” also delved into his Temecula contract.

A Feb. 18 news story in The Press-Enterprise contained the headline: “Expensive year in leadership for Menifee, Temecula.” That story noted that, under the terms of Nelson’s contracts with Menifee and Temecula, the municipal administrator would together be grossing nearly $35,000 per month plus benefits for a year.

The newspaper story went on to say that, because of management upheavals in the separate jurisdictions, Temecula would pay about $600,000 in administrative payouts during the current fiscal year and Menifee’s costs would total more than $400,000 in the same period.

The Menifee City Council approved its one-year contract with Shawn Nelson consulting on Feb. 19, records show. That contract calls for Menifee to pay Nelson $126,000 for one year to do strategic planning, staff training, economic development and succession planning work. At the same meeting, Menifee council members cemented an agreement with its interim city manager. Menifee’s interim city manager will be paid $160,000 annually for his work.

The accounts that Spencer and Maryann Johnson provided to newspaper reporters delve deeper into the behind-the-scenes debates that occurred after Nelson retired from Temecula.

Spencer said his lengthy analysis was released to the media with the “full knowledge and consent” of Johnson and Wilson and the “assistance” of Johnson’s wife. In separate e-mails, Johnson and Wilson subsequently acknowledged their involvement. Spencer said all of the information contained in his analysis can be obtained through city records.

Spencer divided his analysis into sections that include “escalating payroll costs,” “the pension spin,” “audits reveal city’s generosity” and “transparency and accountability at City Hall.” Spencer delves into a clash between a city union representative and Bob Johnson. It states that the financial terms of Nelson’s “complex employment contract” were confusing to Spencer, Wilson, Johnson, and the state agency that administers public pensions.

Spencer’s analysis also lists five concerns he said Johnson and Wilson presented to Temecula council members “in the months and weeks prior to their termination.” Spencer’s analysis also includes a call to action by city leaders.

“Mr. Johnson and Ms. Wilson recommended an independent audit of specifically identified fiscal issues to the City Council prior to their terminations and strongly advocate that an independent auditor conduct a full investigation into these matters in the near future.”