Exclusive: Ex-Sacramento city manager hired a lawyer, charged taxpayers the fees
Former Sacramento City Manager Howard Chan hired a lawyer to help in his negotiations to extend his contract, charged the legal fees to taxpayers, and the city has asked him to return the money.
The city’s actions regarding the reimbursement immediately followed The Sacramento Bee’s inquiries about the $3,215 in expenses, which were revealed in documents released March 24 through a Public Records Act request. The city’s acting city manager deemed them personal expenses and ordered Chan to pay them back.
The city said he has agreed to do so.
The Bee asked about the legal expense on March 25. City spokesperson Jennifer Singer said on Wednesday that “the item was elevated to interim City Manager Leyne Milstein. “In consultation with the City Attorney, she determined it should be a personal expense,” Singer said. “This expense has not yet been reimbursed, but we have written confirmation that it will be.”
City Attorney Susana Alcala Wood added in an email that she agreed it was a personal expense. “Chan’s securing of legal representation to negotiate his contract status was a personal action,” she wrote. “Neither the city nor my office was involved.”
Current and former City Council officials also expressed surprise that Chan would charge thousands of dollars in personal expenses to taxpayers.
Chan initially charging taxpayers for legal advice is the latest wrinkle in a saga over Chan’s contract and continuation as city manager. The contract was a contentious issue in the razor-thin 2024 mayoral race between now-Mayor Kevin McCarty and Flojaune Cofer.
Cofer alleged at a Dec. 17 City Council meeting that she had been offered a bribe in exchange for supporting a contract extension for Chan. The Bee subsequently reported that California Black Chamber of Commerce President Jay King and developer Paul Petrovich were involved in the alleged scheme.
In the months leading up to the vote that would have extended Chan’s contract for a year, multiple sources familiar with negotiations — which involved council members and the city attorney — said Chan frequently referred to “my lawyers.” Sources said he gave the impression that he was paying for the legal advice.
“This was hidden from us, so it comes as a surprise,” said Councilmember Karina Talamantes. “It’s unacceptable that the city manager expensed his personal legal fees with taxpayer dollars.”
Chan’s expenses and ‘clear conflict’
Chan, who was one of the highest paid public officials in California, has declined multiple requests for an interview about his relationship with King and Petrovich. The Bee requested Chan’s expenses, in part, to learn more about his interactions with the alleged co-conspirators in the bribe.
The released records document 12 months of expenses and reveal a lunch meeting between King, Chan and Petrovich, as well as Chan’s meals at expensive restaurants in Sacramento.
For example, among the expenses was a $390 meal at The Waterboy. Chan listed the expense as a “working lunch” with staff on an expense report. The attached receipt had a handwritten note, “Housing Celebration.” Chan also had lunch meetings with people involved in lobbying the City Council to extend Chan’s contract.
Although the majority of Chan’s legal expenses released were incurred in September and October, the city manager did not file them for reimbursement until his last days on the job in December.
In an expense report Chan submitted on Dec. 31, Chan included an invoice from the law firm Weintraub Tobin that charged for a variety of legal tasks, including reviewing an email thread over “dispute over legality of 12/17/24 city council meeting, and attached revised amendment to employment agreement.”
The detailed legal billing shows that Chan received legal advice on multiple amendments to the contract he proposed. The contract he had previously negotiated contained a clause that stated that in the event the city hired a new city manager, Chan was entitled to an entire additional year of pay as an assistant city manager “at the top of the published range for the classification,” with an annual compensation of $340,000. Chan earned $593,000 in total pay 2023 and $547,000 in 2022, according to Transparent California.
“Draft notice of termination and election to assume Asst. City Manager position and confirmation of severance payment,’” said a notation next to a $1,575 charge for three hours of legal time in September.
“This is not a good look,” said Mary-Beth Moylan, an associate professor of law at the University of the Pacific’s McGeorge School of Law, who served on a 2018 commission that advised the city of Sacramento on ethics.
“This is a clear conflict of financial interest,” she said. “There are state laws that prohibit government employees from personally financially benefiting from their position. And you can’t have a government employee that’s obtaining a financial benefit that puts them in conflict with the interests of the governmental organization.”
Chan’s meal tab
Chan’s submissions for reimbursement reveal a lunch meeting between King, Chan and Petrovich in April for which Chan charged a $165 meal at an Arden Arcade restaurant. It included two orders of grilled salmon and a $45 rib-eye steak. (They also met for lunch in August, the records show.)
Chan said on his expense report that the purpose of the meeting was to discuss the “Howe and Fair Oaks Surplus Land Act.” The city owns a parcel of land on Howe Avenue and Fair Oaks Boulevard across the street from The Boulevard shopping center, developed by Petrovich.
In 2022, the city-owned land had become a homeless encampment. The city fenced off the area and evicted the homeless before the sale to a group of property owners. The City Manager’s Office recommended it be sold as surplus land. The land is currently being sold by the city and marketed by the brokerage firm CBRE for $1.78 million.
Singer said that she saw nothing wrong with the lunch. “They were discussing land the city wants to sell,” she said. “And we haven’t had any takers so far.”
Chan’s role
In January, Chan posted on LinkedIn that “I’m happy to share that I’m starting a new position as Special Advisor to the City Manager at City of Sacramento!”
However, sources at the city say that neither Milstein nor anyone at the city approved that title.
Talamantes, who represents South Natomas, said that when Sacramento selects a new city manager, she plans to push for a policy to require the city manager submit an annual report on the expenses he or she incurred.
“We need more transparency,” she said.
This story was originally published April 1, 2025 at 5:00 AM.
