Arroyo Grande city manager put on leave while replacement found

Steve Adams, who has served as city manager for Arroyo Grande for 14 years, will be placed on paid administrative leave immediately, the Arroyo Grande City Council decided in closed session Wednesday.

The council members voted unanimously, with Mayor Tony Ferrara absent, to accept Adams' resignation as the city’s top administrator. The council's next step is to hire an interim manager, which will happen in December after newly-elected council members are seated.

Mayor-elect Jim Hill, a write-in candidate who ousted Ferrara in the Nov. 4 election, attended Wednesday's meeting and urged the council not to hire a search firm to look for a permanent manager until after the new council is seated Dec. 1.

Adams, who did not attend Wednesday’s meeting, started working as the city manager in September 2000. He currently earns $157,294 annually.

The council's action on Wednesday caps months of turmoil for the city, which has been divided over the response to an incident on the night of July 3 involving Adams and a subordinate.

The council on Wednesday heard the results of an investigation into the incident, in which five Arroyo Grande police officers found Adams and Community Development Director Teresa McClish alone at City Hall late at night.

Sintra Group investigators Charles Hookstra and Peter Ruggiero did not find any substantive evidence that would point to an inappropriate or romantic relationship between the pair, according to a summary of their investigation.

But their actions exhibited poor judgment and gave the perception of some form of inappropriate conduct, the summary states.

In addition, the investigators found, a significant number of city employees who were interviewed perceived there was "something more than just a casual or business manager-subordinate relationship between the two."

Adams was reprimanded for the incident during a July 8 closed-session council meeting, but that decision was not made public at the time because it was a personnel matter. More than a month would pass news of the incident and the council’s response became public.

The investigators also determined there was no attempt by the council or anyone else to cover up the incident.

Councilman Tim Brown agreed there was no cover-up effort, but he criticized Ferrara for apparently being initially hesitant to inform the rest of the council about the incident after Ferrara learned of it from City Attorney Tim Carmel.

In addition, Brown said, he learned from Carmel that two employees had previously complained about Adams' and McClish's behavior, stating that the two were often behind closed doors. Brown said he was told the complaint was handled in-house, which he was dismayed to hear.

He mentioned the incident to the investigators, adding, "I have absolute faith and still believe our integrity is intact, that these investigators did exactly what they were asked to do."

A summary of the investigation has been available on the city's website for several days, and a few Arroyo Grande residents offered varying opinions about it at Wednesday’s council meeting.

The cost of the investigation is estimated at $15,000 to $17,000.

Some felt that the investigation should have been completely independent of the city — conducted by the county grand jury, for example — and as a result didn't offer any new information.

"As many of us suspected, our money has been wasted on this portion of the report ... available to the public," Beatrice Spencer said. "Thirty-four people were interviewed and what have we learned? Our City Council should demand a refund from Mr. Hookstra and his firm."

A few residents called for Adams to be terminated. Colleen Martin also said the council should apologize to the Arroyo Grande Police Officers Association, which took votes of no confidence in Adams and Ferrara in response to the city's initial response to the incident.

In response to mounting public anger, Adams had on Oct. 2 announced plans to resign as city manager when a successor could be named.

On Wednesday, Hill asked the council to accept Adams' resignation effective immediately and suggested the council appoint a director-level employee, such as the city clerk, to act as a temporary manager until one can be hired.

Another resident who has been critical of the council's response to the July 3 incident, Patty Welsh, thanked the council for pursuing an independent investigation.

"It appears from the report that I was incorrect that something inappropriate happened July 3," she said. "I feel there is no reason to keep beating a dead horse."

Most of the comments were critical of the report. But Arroyo Grande resident Will Power said that "a cheap, cynical attitude toward city government has affected many residents," leading to a stampede of judgment, which resulted in an expensive, unnecessary investigation.

"Newly elected members to city government should know that you will be presumed guilty until proven innocent," he said.

Also at Wednesday's meeting, Hill and Arroyo Grande resident Otis Page thanked Joe Costello, who lost his seat in the Nov. 4 election, for his 12 years of service to the city.

This story was originally published November 19, 2014 at 8:15 PM with the headline "Arroyo Grande city manager put on leave while replacement found."