Palo Alto Weekly

News - July 5, 2006

Documents point to forced utility resignations

Top Palo Alto utility managers were implicated in still-secret investigative report

Newly released court documents reveal that Palo Alto City Manager Frank Benest warned former Utility Director John Ulrich shortly before his resignation last year that disciplinary actions were possible due to his "managerial failure to adequately anticipate and avoid the employee misconduct and managerial deficiencies" in the department.

Benest described his actions in a sworn statement filed under seal with the court in a lawsuit brought by the Palo Alto Weekly. The suit seeks to release reports prepared by investigators who looked into a utility department scandal that resulted in at least 19 employees being terminated or disciplined.

Benest's declaration, along with similar sealed sworn statements of Assistant City Manager Emily Harrison and City Attorney Gary Baum, were released last week by Superior Court Judge Kevin McKenney at the request of Judy Alexander, the Weekly's attorney.

Harrison's declaration revealed she had similarly warned former Assistant Director of Utilities Scott Bradshaw of possible disciplinary actions prior to his resignation in August, 2005.

The declarations also state that no formal "notice of intended discipline" nor "final disciplinary document" were prepared or placed in Ulrich's or Bradshaw's personnel files.

City officials never publicly acknowledged that the two top utility managers resigned while facing possible discipline.

"He felt it was a good time to retire," Benest said in October 2005, when Ulrich's resignation was announced. "He felt he has achieved the major goals I set out for him and the council set out for him."

Although announced in October, Ulrich's resignation wasn't effective until January.

The declarations had previously been sealed from public view on the request of the city's attorney.

The Weekly's attorney, Judy Alexander, argued for their release, saying she couldn't rebut the city's arguments to keep the investigative reports secret without seeing the actual documents.

The judge agreed, and they were unsealed last week.

Last year, a six-month, $300,000 investigation found employees and managers in the department's Water-Gas-Wastewater Division were using city equipment for private jobs, falsifying timecards and harassing other employees.

In total, 19 employees were disciplined — including six employees who quit or were fired.

The scandal surfaced in the fall of 2004 when a Menlo Park police officer saw a City of Palo Alto utilities truck in Menlo Park. The Weekly requested files associated with the investigation, arguing the public had a right to know.

The city denied the request, saying the files would compromise employees' privacy rights.

The newspaper sued the city in September 2005. Superior Court Judge Kevin E. McKenney ruled on June 7 that the city must release the records pertaining to the disciplined employees, but ruled that two documents regarding Ulrich and Bradshaw could be kept from the public, falling under the "attorney-client privilege."

But McKenney later agreed to hold a full hearing on that issue, scheduled for July 31.

The Weekly argued the files do not fall under the attorney-client privilege because the reports were created as part of a "factual investigation," rather than for legal advice.

The three newly public declarations were part of the city's argument on that matter. Benest argued the investigation reports provided "legal advice and assistance to me for the purpose of investigating and initiating disciplinary actions against city employees."

Nine lines of Baum's newly revealed 46-line declaration were redacted by the judge for unknown reasons.

Staff Writer Bill D'Agostino can be reached at bdagostino@paweekly.com.

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