STOCKTON OFFICIALS SAY that Lathrop City Manager Stephen J. Salvatore is no longer working as a consultant for the city.
The announcement comes a month after an investigation by Stocktonia found that interim City Manager Steve Colangelo, a longtime event manager with no city management experience, had hired Salvatore as a consultant to help him do his job just days after being appointed as Stockton’s top executive. The fee for Salvatore’s guidance was $11,000 per month.
The city sent out a news release the evening of June 19 announcing the termination of Salvatore’s contract, the purpose of which was described as “transition support services,” and “to clarify facts regarding the consulting arrangement.”
Salvatore’s agreement with the city “was designed to provide strategic guidance during Colangelo’s transition into the interim city manager role,” the city said. “After demonstrating competency in city operations, the formal consulting relationship was concluded with Salvatore voluntarily waiving a portion of his compensation.”
However, it’s unclear why the council would appoint someone to such an important city position who would need to demonstrate competency in a role after being hired rather than before offering them the job.
Salvatore was hired in February to advise Colangelo and provide him with strategic guidance on best practices in municipal management, according to city documents obtained by Stocktonia through a public records request. The contract was worth up to nearly $100,000, on top of the already $20,000 Colangelo was being paid, and signed without council approval or taking competitive bids.
It was also revealed last week that the contract was being funded through unspent diversity, equity and inclusion support money in the city manager’s budget.
Salvatore is quoted in the release as saying that he decided to end his consulting contract with Stockton, as his services were no longer needed, though he would be available for future consulting “through a standard hourly arrangement” as needed.
He’s also “voluntarily waived a substantial portion of my compensation and have concluded the formal agreement in good faith,” Salvatore said.
“When I was first asked to support Interim City Manager Steve Colangelo during his transition into the role, I was proud to offer strategic guidance and help establish a strong foundation for his leadership,” Salvatore said in the release. “As the City has begun to stabilize and internal resources have taken shape, the volume and scope of work no longer align with the structure of a monthly retainer.”
Salvatore was paid his full $11,000 monthly fee for both February and March, though his contract indicates he’d only have been able to work about 10 days in February. The city told Stocktonia in mid May that Salvatore had not submitted any other invoices.
Officials have accused media reports about Salvatore’s consulting contract of containing “inaccuracies regarding the cost, authority, and purpose” of the arrangement, describing some criticisms as “misinformation.”
Stockton city officials, including Colangelo, and Salvatore did not respond to Stocktonia’s requests for comment regarding the specifics of Salvatore’s contract in the week leading up to publication in late May of its investigation into the consulting agreement.
Colangelo described the cost of Salvatore’s services — $22,000 over two months — as a bargain, according to the city’s news release, saying that similar expertise typically costs thousands more per month, sometimes even double what Salvatore was charging.
“Mr. Salvatore only invoiced for work performed and hasn’t charged a single dollar since April, demonstrating that we have used consulting services strategically and efficiently, not wastefully,” Colangelo said in the release.
City officials also said the duration of Salvatore’s contract had only been eight weeks. However, city documents show that the consulting agreement had a term of six months unless Salvatore or Colangelo opted to terminate the agreement. In turn, there was also the option to extend.
Public records obtained by Stocktonia earlier this month from the city of Lathrop also show that Salvatore’s calendar had weekly lunch meetings with Colangelo planned through at least the beginning of July.
What services did Salvatore provide?
The June 19 news release also seems to acknowledge that Colangelo may not have initially been up to the job of running California’s 11th largest city as was assured when he was hired.
Colangelo was appointed Stockton’s interim city manager in February despite concerns from the community and some City Council members that he wasn’t qualified for the job. Both his job history and education do not match up with what has typically been required of Stockton’s previous interim or permanent city managers. Colangelo had never worked in city government and does not hold at least a four-year degree, according to his resume, which was posted on the city’s website after he had already been hired.
Those concerns were tempered with assurances by some on the City Council, including Stockton Mayor Christina Fugazi and Vice Mayor Jason Lee, that Colangelo was the right choice for the position.
However, city documents and emails obtained by Stocktonia through a public records request show that less than 10 days after beginning his tenure with the city, Colangelo sent a memo notifying the city attorney that he would be hiring Salvatore “in an advisory role, providing strategic guidance … on best practices in municipal management.”
“His role will be focused on offering insights and strategic recommendations to support Stockton’s interim leadership,” Colangelo wrote.
Colangelo did not respond last month to Stocktonia’s questions asking what exactly Salvatore’s consulting services had included. City staff also couldn’t provide specifics when asked by Vice Mayor Jason Lee at an audit committee meeting last week.
A look at Salvatore’s invoices submitted to the city and obtained by Stocktonia through a public records request provide insight into what his services included.
Salvatore’s duties in February are listed as “attending several meetings, conference calls, and zoom calls to discuss homeless issues, potential options for progress on assistance and strategy. Discussed options for assistance in the Finance Department. Brought resources to the City of Stockton for assistance with payroll services and budget audit.”
In March, Salvatore’s invoice says he “Reviewed/Revised RFP for Forensic Audit. Worked with Pun Group to scope out Forensic Audit and prepare for execution and City Manager signature. Attended various meetings/phone calls for general guidance on municipal budgeting and operations.”
However, officials now say that Salvatore was only ever meant to provide transitional support to Colangelo.
In the news release, Colangelo touted the accomplishments he says have been achieved under his leadership, including a balanced budget, giving credit in part to Salvatore’s consulting.
“These results didn’t happen by accident; they happened because I made the strategic decision to bring in proven expertise when Stockton families deserved better than trial-and-error leadership,” Colangelo said in the release. “I hired Stephen Salvatore because he has achieved exactly what Stockton needs to achieve, and he’s done it right here in San Joaquin County.”
Colangelo said that Salvatore’s nearly two-decades working for the city of Lathrop made him the best choice for his adviser.
“Mr. Salvatore brings something that no other consultant could offer, intimate knowledge of how to work effectively within San Joaquin County’s government structure, state regulatory environment, and regional economic ecosystem,” Colangelo said. “This operational intelligence would take years for an outsider to develop. When we’re working to secure federal funding or navigate complex regulatory processes, that depth of local knowledge delivers immediate results for taxpayers when time is critical.”
Critics “claim I lack experience; I proactively sought expert guidance while maintaining complete decision-making authority and accountability,” he said.
Following Salvatore’s departure last week, Blower told Stocktonia it’s become clear that his initial worries of Colangelo didn’t have the experience to be an interim city manager were founded. Blower was one of three councilmembers — including Mario Enríquez and Brando Villapudua — who voted against Colangelo’s appointment.
“All this stuff that Mr. Colangelo is saying about Mr. Salvatore — and how accomplished and how great he is — well, maybe we should consider him, ” Blower said.
What else does City Council have to say?
The discovery of Salvatore’s hiring incurred backlash from both the community and some city councilmembers, including Vice Mayor Lee, who was one of four on the council to approve Colangelo’s contract back in February. Mayor Fugazi, Mariela Ponce and Michele Padilla also voted in favor.
In a social media post Monday, Lee said he was “in full support” of the decision to terminate Salvatore’s contract, “as we need those resources locally.”
The Hollywood media mogul-turned-councilmember spent the better part of an hour at an Audit Committee meeting last week questioning city staff on Stockton’s contract procurement processes, DEI funding efforts and what exactly Stockton was getting from Salvatore.
“The public has a right to know how their tax dollars are being spent,” Lee said. “And the council needs to make sure that tax dollars that are being spent, are being spent on behalf of the needs of the city.”
Contracts, such as the one awarded to Salvatore, that fall under the city’s procurement threshold of $100,000 can be awarded without council approval under the city manager’s discretionary authority. Salvatore’s contract stipulated that his compensation — including reimbursements for any “reasonable and necessary business expenses” such as travel, mileage and clerical expenses — could not exceed $99,000.
Lee had expressed frustration at the committee meeting that Colangelo had spent money on Salvatore’s contract when Stockton has been forced to cut $15 million in spending from next year’s budget, resulting in the denial of needed expense requests from various city departments, such as the city clerk and city attorney’s offices.
He also questioned why the contract was allowed to go through when it’s procurement process had been flagged by city staff in internal communications as not standard or best practice. It was also revealed the contract had been funded with money meant for diversity, equity and inclusion support and the city manager’s DEI officer had been transferred to the Human Resources department where they were reclassified as an HR analyst.
“The public has a right to know how their tax dollars are being spent. And the council needs to make sure that tax dollars that are being spent, are being spent on behalf of the needs of the city.”
Vice Mayor Jason Lee
Lee and Colangelo have since held “extensive conversation,” regarding the city’s DEI efforts, according to a city press release, leading the vice mayor to soften some of his criticisms that have been recently directed at Colangelo.
When Colangelo was first hired, Lee argued that lack of experience in a city manager didn’t matter much.
“I don’t care who sits in that chair. They could be Ronald McDonald, they can put a clown, they can put a rocket scientist,” Lee said before voting for Colangelo. “Whoever sits in that chair will be fired if they don’t do the will of the board of directors that comes directly from the stakeholders.”
Colangelo had initially been brought into help with payroll issues that had been plaguing the city, Lee said. He’d been asked to support the mayor in hiring this outside hire because there were concerns staff were afraid to hold people accountable.
“I think this City Council was blindfolded and has been working under the belief that the interim city manager had a very clear scope on what he could do,” he said. “We had a very clear understanding.”
Mayor Fugazi described Salvatore’s hiring as “smart investing,” echoing the main points of the city’s news release, and said that the decision to bring the Lathrop city manager as a consultant was not a reflection of any perceived lack of capability on the part of Colangelo.
“Rather, it was a strategic move to expedite his transition into the role and ensure that the city could quickly and effectively address the breadth of critical issues facing Stockton,” Fugazi told Stocktonia in a statement Friday. “This is standard municipal practice, and the City of Stockton has utilized consultants in the past to support key transitions and initiatives.”
However, hiring an outside candidate with no city government experience as interim city manager has not been standard practice for Stockton.
Out of the city’s last five interim city managers, Colangelo is only one of two outside hires brought in to serve in the role, according to city records. Kevin O’Rourke, a former city manager of Fairfield with decades of experience who was chosen out of multiple candidates interviewed by the then City Council, was the other in 2009. The other three interims were Stockton deputy city managers.
Before getting the job permanently, Salvatore himself served as Lathrop’s interim city manager during his tenure as a deputy city manager. Colangelo replaced acting City Manager Will Crew, a Stockton deputy city manager with decades of experience working for and with local governments, who stepped into the role temporarily following the ousting of former City Manager Harry Black.
But Fugazi says she stands by Colangelo’s appointment.
“The decision to support Interim City Manager Colangelo has been one of the best decisions I have made as mayor, in concert with the city council,” Fugazi said. “His accomplishments speak volumes about his capability and dedication to the City of Stockton. I would make the same decision again without hesitation.”
Lee, as well as as Councilmembers Michele Padilla, Brando Villapudua, Mariela Ponce and Mario Enríquez, did not respond to Stocktonia’s questions on Salvatore’s leaving or the content of Thursday’s city news release.
This story originally appeared in Stocktonia.
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