Former Morro Bay City Council violated state meeting law

Experts: Meeting over severance pay for executives was illegal

jhickey@thetribunenews.comSeptember 24, 2013 

Morro Bay City Manager Andrea Lueker, left, listens as City Attorney Rob Schultz speaks during a packed City Council meeting Thursday, Sept. 12, at the Veterans Memorial Building.


Correction: An earlier version of this story incorrectly attributed a statement on the statute of limitations to Chief Deputy District Attorney Jerret Gran. He did not say the statute of limitations had expired on Brown Act Violations. While 90 days is the minimum for some aspects of civil action to report suspected Brown Act violations, the criminal statute of limitations is one year, Gran said.

The former Morro Bay City Council violated the Ralph M. Brown Act when it increased the severance pay of City Manager Andrea Lueker and City Attorney Robert Schultz during a closed meeting on Nov. 1, 2012, and failed to notify the public of the contract changes.

The Brown Act is intended to require local public agencies to conduct meetings in an open and public manner. Several legal experts have confirmed that the former council — consisting of Mayor Bill Yates and council members Carla Borchard, Nancy Johnson, George Leage and Noah Smukler violated several aspects of the Brown Act. (Leage and Smukler are still on the council.)

The act states among other requirements that proper disclosure must be given about the content of closed meetings; that the salary of public agency executives be discussed only in open sessions; that special meetings shall not be called to discuss compensation; and that actions taken in closed sessions be publicly announced afterward — but all of these rules were violated at the Morro Bay City Council’s Nov. 1 meeting.

The notice released two days before the special closed session meeting described the agenda as “Discussions regarding Personnel Issues including (2) public employees regarding evaluation, specifically the City Manager and the City Attorney.”

The notice did not notify the public of possible contractual discussions or salary changes.

The Brown Act also says, “no item or discussion shall be undertaken on any item not appearing in the posted agenda.”

Closed meetings can be called to evaluate public employees, but discussion cannot include executives’ salary, compensation or fringe benefits.

“They can’t even have a closed-session discussion, let alone action, on matters associated with compensation under code 54957 (a Brown Act section.) That was illegal,” said attorney Tom Newton, executive director of the California Newspaper Publishers Association.

“The law allows these limited closed sessions to protect the privacy interests and potential embarrassment of employees, but once you start talking about compensation, the public interest overrides the employee’s interest,” Newton said of the section.

The council also called a special meeting over the issue. On this topic, the Brown Act reads: “A legislative body shall not call a special meeting regarding the salaries, salary schedules, or compensation paid in the form of fringe benefits, of a local agency executive.”

Once the council made its closed-session decision at the Nov. 1 meeting, there was no public notice given afterward that the employees’ contracts had been changed to increase severance pay, and no such minutes from the meeting have been published.

The act says, “The legislative body of any local agency shall publicly report any action taken in closed session and the vote or abstention from that of every member present.”

“It was a total error,” Yates said when contacted by The Tribune Tuesday about the council’s failure to notify the public of the contract changes. “It was just a goof. There was no malice there. We were not trying to hide anything from anybody.”

Yates did not admit to violating the Brown Act.

There is a 90-day statute of limitations on Brown Act violations. If a public body receives a written complaint within 90 days of a suspected Brown Act violation, the body has 30 days to correct the action before legal action can be brought. Then there is only a short window of time to file a complaint, Newton said. So Lueker’s and Schultz’s increased severance pay is official, Newton said.

If it can be proven that the members of a legislative body knowingly and intentionally deprived the public of information to which the public is entitled, then each of the members is guilty of a misdemeanor, the act says. No Brown Act complaints have been brought against the city of Morro Bay, Deputy District Attorney Jerret Gran said.

When asked why the council increased severance pay for Schultz and Lueker, Yates said the council wanted the two long-term employees to have the same benefits that reflected what other cities provide. Schultz’s contract listed nine months of severance pay (three months more than Lueker’s) until July 2011, when Schultz’s severance was reduced to six months, his contract shows.

Yates said that change was meant to equalize the benefits for the two. Both now earn similar wages: Lueker earns $152,244 annually, while Schultz earns $151,589.

After the council completed a study in which it was determined that nine months was more of an industry standard for severance pay, Yates said, the council voted on Nov. 1, 2012, to increase both Schultz’s and Lueker’s contracts to provide nine months of severance pay. That was just six weeks before the new City Council took office. When asked about the timing of the contract changes, Yates declined to comment.

The total cost of terminating Lueker and Schultz without cause and completing a search to replace them, including legal counsel fees and severance pay could be at least $305,000, according to The Tribune's calculations. That does not include possible accrued vacation pay.

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