Sacramento set to decide on city manager contract. Will letting him go be the ‘worst mistake?’
In 2016, Howard Chan reached the top of Sacramento’s city government.
Over 14 years he had overseen Sacramento’s parking division and worked as an assistant city manager. But when the then-city manager decided to step down, the City Council tapped Chan to serve as its interim leader after a nationwide search for a permanent hire.
His contract was for seven months.
“I’m looking forward to putting my imprint here in the city,” Chan said at the time.
More than eight years later, he is facing a debate over how positive that imprint has been. Sacramento has a severe budget shortfall, his salary has sparked disagreements on the council and frustrations from residents and his recent handling of a racial equity resolution led to criticisms from a councilmember and the city attorney.
On Tuesday, the City Council will decide whether or not to renew his contract for another year, after months of delays. Chan’s deal is set to expire on Dec. 31, though he can work without one.
A key question looms over the vote: Does the city need him to stay?
Some say yes. They argue his experience is exactly what Sacramento needs at this moment, especially since Mayor Kevin McCarty has only been on the job for a week. They swat away critiques about his pay, saying they are unfair and overblown. Without Chan, they argue, the city will be worse off as it heads into a difficult time.
“If this council votes to boot Howard Chan,” said Jeff Harris, a former councilmember, “they will make the worst mistake, perhaps, in Sacramento history.”
Others see him as dispensable. They view him as an expensive leader who has defied city rules and can be vindictive behind the scenes. Sacramento, they say, is ready for a fresh start to face its deep challenges.
“Our city is run by hundreds and hundreds of very qualified, very passionate people,” said Katie Valenzuela, who was on the City Council until earlier this month. “If he goes away, the city won’t fall apart.”
Despite the uncertainty and scrutiny, Chan, 57, wants to stay on the job. He declined to be interviewed, but said in a statement that council members have to consider a broader question than just whether or not he deserves to have his contract renewed for another year.
For Chan, the question is: should the council maintain stability in the face of a projected $77 million deficit, a series of expiring labor contracts and three new council members, including McCarty?
“The results of the city’s work — and my work — have been covered extensively,” he said, “and I am hopeful this track record speaks for itself.”
‘Invaluable’ or ‘Done with him’
Harris is one of several former council members who spoke highly of Chan’s tenure. He was on the council when Chan was named the interim city manager and then became the permanent leader in February 2017.
Chan, Harris added, worked well with council members but wasn’t afraid to say “no” to certain requests to spend more money.
Sen. Angelique Ashby, also a former councilmember who overlapped with Chan, said the city’s tough financial situation is not a knock on his tenure but the reason the council should keep him on.
“What, are you going to get a brand new person from the outside who will become more familiar with our budget in the next month or two?” Ashby said. “Having him in that position is invaluable.”
Critics push back on the praise, saying the city could have done more to lessen the expected shortfall and that relationships with Chan can sour over time.
Valenzuela said hers was professional with Chan until she started publicly disagreeing with him at City Council meetings. She recalled one instance in 2022, when she voted against providing the city manager a raise. Chan called her following the vote and was “really upset” that she had put out a public statement saying why she was against the pay increase, Valenzuela said.
“Our relationship has grown increasingly contentious,” she said, “the more I’ve disagreed with him publicly.”
Valenzuela was the only councilmember who voted against his 2022 pay bump. But the controversy around Chan’s pay grew louder in the past year.
His salary was $282,060 when he became the permanent city manager. Last year, he made roughly $593,240 in total wages, which was the second highest for a city manager in the state.
In December of 2023, council members voted to give Chan a raise and also 240 hours of leave time. Valenzuela, along with then-Mayor Darrell Steinberg and Councilmember Mai Vang, abstained from the vote.
But the following month, the council effectively rescinded that decision after The Sacramento Bee reported that it had violated state law in the process of approving the new deal.
In October, Chan requested the council extend his contract. At a meeting, business and union leaders, and residents urged members to grant the city manager’s request. Doing so, they said, would be a vote for stable leadership. The council voted to push the discussion until this month, after McCarty and other new council members were sworn in.
Several residents don’t feel Chan should stay on. One of them is Marbella Sala, president of the Gardenland Northgate Neighborhood Association, who said the council has made Chan feel “empowered” by providing repeated raises.
In a recent interview, Sala said she lost trust in Chan because of how his proposed raise was handled last year.
“After that, I was done with him.”
Ashby believes that conversations around Chan’s contract have dragged on for too long and that the criticisms over his pay are excessive. Among the top-15 highest paid city managers in the state last year, Sacramento had the largest population by far, according to state data.
“It’s time to just take a vote and move forward.”
‘Lapse in judgment’
Beyond his pay, the city manager has also faced criticisms for how he handled changes to a resolution on racial equity.
Chan’s office presented a revised version of the proposal to City Council last month that did not include key elements of the original resolution. Vang called out the office for the “major changes” and said the amendments did not reflect the views of the community.
The council delayed approval of the resolution. It later voted in favor of the unamended version after Chan pulled the revisions. City Attorney Susana Alcala Wood determined that Chan did not have the proper authority to change the resolution.
Flojaune Cofer, a recent candidate for mayor, said the incident was a “lapse in judgment.” Cofer would not have voted to extend Chan’s contract if she had won the mayoral race, saying there was not enough time to evaluate his performance.
“I would not expect that our city could not move on if any one person was not there anymore.”
McCarty, a former councilmember, said during his campaign that he would support keeping Chan on through 2025. The new mayor worked with Chan when he was an assistant city manager.
Since he was sworn in, McCarty has been more noncommittal. In a statement, he withheld “any comment until after the decision has been made by the council.”
Do the other council members feel Chan needs to stay? Most did not respond to, or declined to comment on, an emailed question about their views of the city manager.
In statements, Council members Lisa Kaplan and Rick Jennings said Chan’s leadership was important in projects including the Sacramento Republic FC soccer stadium deal and the UC Davis Aggie Square development. Kaplan wants to approve his extension with a mandatory six-month review.
At an Oct. 15 meeting, Jennings said he supported extending Chan’s contract. During that same meeting, Councilmember Karina Talamantes said she had previously pushed for an extension until July 2025, when a new budget cycle begins.
Other council members have largely avoided taking a public stance.
Chan hopes his record, which includes helping the city navigate the COVID-19 pandemic, shows he’s up for the latest challenge. In his statement, Chan said he is ready to work with the council to “identify priorities,” should they approve his contract extension.
One of those priorities will be whether or not he’s their long term answer.
This story was originally published December 16, 2024 at 1:43 PM.
