A divided crowd converged on the community center Monday evening, Sept. 12 as Oakdale City Council members held an open forum, followed by a closed session, to discuss the recent discovery of a Limited Liability Company (LLC) registered in the name of three current top administrative city employees and one former city manager.
Following closed session, the unanimous decision was made to hire the legal firm of Meyers Nave at a capped cost of no more than $15,000 to investigate whether the consulting firm VHHW, LLC poses ethical questions or a conflict of interest. (See related story.)
The consulting investigative firm, VHHW LLC, which was filed with the California Secretary of State in June, has an active website and phone as well as a storefront located in Turlock on Geer Road. The initials in the masthead stand for Vizina (the maiden name of City of Oakdale Human Resources Analyst, Michelle McKinsey); Hallam (former City of Oakdale City Manager, Steve Hallam); Hallinan (the current legal counsel for the City of Oakdale, Tom Hallinan); and West (the current City of Oakdale Police Chief, Marty West).
The discovery, made two minutes prior to a Tuesday, Sept. 6 Oakdale City Council meeting, created ripples of concern for several city employees and labor groups who felt confidentiality barriers had been compromised, creating a potential leak of sensitive information.
Mayor Pat Paul, council member Jason Howard and interim City Manager Greg Wellman responded swiftly to the discovery by issuing a press release acknowledging the discovery and scheduling the special meeting to hear all sides of the issue.
Councilman Howard called the actions of those involved, “blatantly wrong” and an abuse of a loophole within the City of Oakdale Merit System Rules and Regulations.
Section 1303 of the Merit System Rules and Regulations states: Any regular employee desiring to engage in outside employment shall first obtain non-City conflict job approval from his Department Head. The employee shall submit a statement to his Department Head on a standard City form naming the prospective employer, his address and telephone number, and outlining the proposed duties and the hours of work. Approval may be denied if, in the opinion of the Department Head, such outside employment is incompatible with the proper discharge of the employee’s official duties. All such approvals shall be subject to review by the City Administrator, and shall be re-submitted prior to January 10th each year to maintain a valid, continuous authorization.
Wellman confirmed that he was the immediate supervisor of both Michelle McKinsey and Marty West, and that neither had notified him of their outside business. He said that City Attorney Hallinan reports directly to the city council, and was not obligated to notify the City Manager of non-city business or consulting deals. Wellman did not know whether notification was required under West’s or McKinsey’s job contracts.
“But common sense dictates that the immediate supervisor should at least be given a heads up, and that was not done,” Wellman said.
Wellman has personally done outside consulting throughout his 40-year career, and he said that it is common practice for city employees to let their supervisors know when they are doing outside work that might conflict with their current position. Wellman has personally gone as far as getting a sign off from a legal advisor before doing any outside advising work, he noted.
“I’m sure that when the smoke clears and we have a little more information, further reviews will take place, definitely,” Wellman said.
West denied any wrongdoing, stating currently, his participation with VHHW Investigations, LLC was minimal, though he was interested in working on a part-time, limited basis following his retirement in March 2012.
“It’s incredibly troubling,” Howard said, adding that when he first heard of the business, “Initially, I thought it was a satire. I didn’t think it was real. Honestly, I was flabbergasted.”
Howard said the domain name for VHHW LLC was registered one month before Hallam’s employment was terminated with the City of Oakdale, which also raises troubling questions.
“That’s evidence of intent before Steve was terminated … that’s a whole other ball of wax,” Howard said. “My list of questions for legal counsel is getting longer and longer. If an employee goes to the city manager with a grievance, how can they be assured that their information won’t be shared with their supervisor?”
Det. Brian Shimmel, President of the Oakdale Police Officer’s Association (OPOA) raised similar concerns at the Monday meeting, addressing the council with a prepared statement, saying, “All employees have the right to due process in any and all matters pertaining to allegations of wrong doing, disciplinary matters and other employee rights. The position of (the) Sr. Human Resource Analyst is to be the go between of management and the city employees. The person holding this position needs to be neutral and non-bias(ed) in representing the best interest of the City. The Chief of Police is a Department Head who implements discipline and termination procedures for the Police Department. The City Manager who is the Skelly Hearing Officer on discipline matters imposed by the Police Chief and reviews all appeals. To prevent any civil rights or Public Safety Officer Procedural Bill of Rights violations, the City Manager, Police Chief and Human Resource Analyst must remain independent from each other in order to have the best interest of the employees and the City in order to prevent arbitrations and lawsuits. I find it very difficult to believe Steve Hallam, Chief West and Michelle McKenzie were able to separate their business partnership and their City obligations in making recommendations and decisions … if it conflicted against each other.”
Shimmel went on to say, “…Chief West has been excessive in disciplinary actions which have led to lawsuits and arbitrations. In our opinion … each and every case could have been resolved prior to the Association taking extreme actions to protect the rights of our employees and members. The business (venture) of these four senior members of the city government may explain the several lawsuits and arbitrations that has plagued our City…”
Public Works employee Chris Robinette echoed these concerns saying, “It’s about trust. It brings everything into question. Our employees put their trust in the personnel and now that trust barrier is broken.”
Councilwoman Kathy Morgan made her position clear on Friday, saying, she didn’t believe there’d been any impropriety on the part of the principles involved with VHHW, LLC and she maintained that position at the Monday meeting.
“Nobody’s done anything wrong — it’s just the perception. I don’t want to start a witch hunt. There’s been no impropriety. I understand the Unions are looking at this differently but what’s wrong with starting a business? I tend to look out for the best in people. Don’t ruin this before it even gets off the ground. It’s an honest, legitimate business. I think we should move on.”
Several community members, including former Mayor Farrell Jackson, echoed this sentiment.
“Quit looking backward; look to the future,” Jackson said. “There’s no conflict of interest. There’s nothing here.”
Councilman Tom Dunlop appeared annoyed by the accusations, stating the entire stir was turning into a “dog and pony show.”
“I’m disappointed this has taken on a life of its own,” Dunlop said.
Community member Alice Garcia said, “This Council is wasting tax payers’ dollars. A lot of community members have two jobs these days.”
But Michael Eggener, former city police officer and current business representative for OE3 (Operating Engineers Local No. 3) in the public employees division, didn’t believe the issue was so cut and dry, saying, “Are they in cahoots? They are high-level employees giving Council legal advice regarding personnel issues. I think these are valid questions you have to ask yourself.”
At present, council has not taken any action to place any of the three current city employees involved with VHHW, LLC on administrative leave.
Councilman Michael Brennan stated he didn’t have an issue with the four people wanting to start a new business; his issue is with the “appearance of impropriety.”
“That’s going to be my focus because that’s what affects the city,” Brennan said.
Following the council’s decision to investigate further, Eggener said, “It was a good outcome. Our concerns were addressed. Our employees were concerned that their due process rights were threatened.”
Tom Hallinan, whose family has more than four decades of service with the City of Oakdale, was visibly shaken at the Monday meeting and surprised by the furor created by the discovery of his business venture with Hallam, West, and Vizina, saying it was a phony, phantom issue.
“Spending a dime on this investigation would be a waste of city resources…This wouldn’t have been handled like this in the Oakdale I grew up in,” Hallinan said. “I don’t have much more to say than that.”