The Princes of Alameda

For years, the Merry‑Go‑Round believed that the savviest political operator ever to occupy an office at City Hall was former City Manager John Russo.

But in our estimation Mr. Russo now has got himself a rival for the crown:  City Planner Andrew Thomas.

This is the thought that occurred to us as we reviewed the events leading up to Council’s approval of the paradigm-shifting Housing Element drafted by Mr. Thomas.  As we saw it, the City Planner’s deft maneuvering bore remarkable parallels to the example set by Mr. Russo 10 years ago when he won Council approval of new budget‑busting contracts for the public‑safety unions.

In both cases, the result was counterintuitive.  Mr. Russo got contracts through Council that increased General Fund expenses even though his finance staff already was projecting a string of rising operating deficits in the coming years.  Mr. Thomas got a Housing Element through Council that effectively wrote Article XXVI out of the City Charter even though the electorate had voted overwhelmingly just two years earlier to retain it.

Moreover, in both cases, the result enabled the majority of Council members – the direct bosses of the City Manager and the ultimate overseers of the City Planner – to please the interest groups to whom those elected officials owed their allegiance (and, in some cases, their seats).  The new contracts gave the firefighters their first pay raise in six years.  The Housing Element fulfilled the pro‑housing activists’ fondest wish:  an end to “exclusionary” zoning in Alameda.

But to us, the most notable similarity came in the strategy employed by Mr. Russo and, later, by Mr. Thomas, to achieve the result.  Both men framed the issue in such a way to make it appear that Council had no choice but to take the recommended action, and, at the same time, they offered up a parade of horribles that would ensue if Council did otherwise.  Likewise, both men arranged to bring the matter before a favorably inclined outgoing Council rather than risk defeat from its successor.

We’ll tell the stories.  See if you’ll second our nomination.

John Russo

Before Mr. Russo became City Manager, his immediate predecessor, Ann Marie Gallant, had been locked in a battle with the Alameda firefighters’ union.  The fire department was overstaffed, Ms. Gallant believed, and, after a nationally reknowned consulting firm confirmed her view, she closed one fire station and reduced staffing from 108 to 92 sworn firefighters.

The union was irate.  For the 2010 election, it put together a slate – Marie Gilmore for mayor, and Rob Bonta and Lena Tam for Council – that would create a pro‑union majority on Council.  Taking advantage of the IAFF Local 689 PAC’s campaign contributions and “independent expenditures,” the slate won.  Its first official act was to hold a special meeting to get rid of Ms. Gallant.

With its nemesis out of the way, the union turned its attention to securing financial benefits for its members.  The existing contract, which ran from January 2010 to June 2013, did not provide for any pay increases over its term.  This stinginess simply couldn’t continue.  (In fact, municipal miserliness wasn’t the problem:  contemporaneous analyses by both staff and a citizens’ committee showed that the City couldn’t afford to offer raises to any of its employees, firefighters included.  Indeed, the pressing issue was how to cut expenses, not how to increase them.)

Upon becoming City Manager in June 2011, Mr. Russo took charge of negotiating a new contract with the public‑safety unions.  He ended up cutting a deal with the firefighters for a four‑year MOU that boosted their compensation in two ways.  First, the contract guaranteed a minimum annual raise (1.5 percent in 2014 and 2 percent thereafter), with the possibility of getting an even larger pay hike pursuant to a formula devised by Mr. Russo.  Second, firefighters who met certain educational and training standards would get up to a 12 percent bump over their base salary under a newly created “career development incentive program.”

Mr. Russo presented the new contract to Council on December 11, 2012 – and the timing was no accident.  One of the original pro‑union triumvirate – Mr. Bonta – had already left Council after having been elected to the State Assembly, and three new Council members, none of whom had a track record demonstrating loyalty to the union’s interests – would take office on December 18.  It would be better, it seemed, to push the new contract through the still‑sitting Council than to take a chance on three wild cards.

Of the four Councilmembers remaining after Mr. Bonta left, Ms. Gilmore and Ms. Tam were certain votes for the new contract.  Councilman Doug DeHaan was a lost cause.  Which left former Mayor Beverly Johnson, who was completing a two‑year term on Council.  What would it take to get her vote?

Mr. Russo found the right card to play to win over Ms. Johnson, a fiscal conservative who despised litigation.

He began by emphasizing in the staff report the “savings” for the City that would result from the provisions in the new contract requiring pension and OPEB employee cost‑sharing.  But he realized that the MOU still would raise expenses by a net $1.6 million – and thereby increase the projected annual operating deficit, which, even without the added costs, was expected to reach $5.3 million by 2017.  So he needed to offer another inducement.

And he came up with one.  The staff report had described the new contract in detail.  But there was a key term the report hadn’t mentioned, Mr. Russo told Council:  In addition to consenting to cost‑sharing, the union had agreed not to pursue a “grievance” arising from the prior failure by the City to give firefighters the same “retention pay” it gave to police officers.  By approving the contracts, he contended, Council would dispose of the potential claim and actually reduce the total amount spent on public safety.  And it would avoid litigation.

Mr. Russo came to the meeting well‑prepared.  He released a memorandum from a staff attorney opining that “the City has significant exposure on this grievance.”  And he had his staff work up numbers showing that the City would owe the firefighters $3.7 million for the period ending June 2013 and another $3.5 million over the following four years to make up for the omitted retention pay.

At the December 11 meeting, Mr. Russo laid it on thick.  Of course, the City could contest the claim in arbitration.  But this would cost so much in attorneys’ fees that Mr. Russo hesitated even to give an estimate.  And why should it fight it out?  The “grievance” was a dead‑bang loser for the City, Mr. Russo said:  “Our attorneys – and I share their opinion – believe that we are likely to lose” if the issue went to arbitration.  And if the City lost, the financial consequences would be “catastrophic.”

Having thus framed the issue, Mr. Russo made it appear that Council had only one realistic choice:  It could approve the contract and transform a $1.6 million cost into a $5.5 million “savings.”  Or it could reject the contract and end up paying $7.2 million in damages, plus lawyers’ fees.

Ms. Johnson found it hard to resist this pitch.  She recited all of the arguments offered by Mr. Russo and added one of her own:  by “resolving” the grievance, the outgoing Council would leave “a clean slate” for its successors.  “I look at the overall contract,” she concluded, “and I think there are a number of very good reasons why we shouldn’t not move forward with this contract and leave the new Council in the middle of negotiations.”  Not exactly a ringing endorsement, but it led her to vote yes.

There is a coda to this story, which the Merry‑Go‑Round learned after it submitted a public‑records request a year later.

After the union filed the grievance in November 2009, the fire chief denied it.  Ms. Gallant then asked her deputy, Lisa Goldman, who held degrees from Harvard College and the Goldman School of Public Policy, and who had worked in Alameda city management since 2007, to take testimony and make a recommendation.  Ms. Goldman did so in December 2010 – and she concluded that the grievance had no merit.  The contractual provision upon which the union relied had been included as a “result of a clerical error,” she found.  And the union’s arguments to the contrary were “neither persuasive nor . . . supported by the record. . . .”

Thereafter, the union did nothing for two years to pursue the grievance.  But then it re‑surfaced in December 2012, just in time to serve as a bargaining chip for a pay raise (and to set up an argument Mr. Russo could use to obtain Council approval).  By that time, Ms. Goldman had left the City, and her findings that would have undermined the narrative were not disclosed to the public.

As they say in the U.K.:  “Well played, Mr. Russo.”

Andrew Thomas

For years, Mr. Thomas never bothered to hide his distaste for Article XXVI of the City Charter, which prohibits multi‑family housing and limits residential density to 21 units per acre.  But he became increasingly outspoken as time passed (and the composition of Council changed).

Early on, Mr. Thomas appeared willing to live with the Charter provision.  When he prepared the Housing Elements for the 2007‑13 and 2014‑23 planning cycles, he did not urge that Article XXVI be repealed.  Instead, he recommended that Council establish an exception by creating a “multi‑family overlay” that permitted multi‑family housing and residential densities of 30 units per acre and applying it to 16 parcels.  This workaround satisfied HCD sufficiently that it certified both Housing Elements.

Then, in November 2018, one of Article XXVI’s most strident detractors – John Knox White – was elected to Council.  The newly elected mayor, Marilyn Ezzy Ashcraft, appointed a “Charter review” subcommittee consisting of Mr. Knox White and Tony Daysog, which in turn asked Mr. Thomas to provide an “evaluation of the land use regulations contained in” Article XXVI.

To the City Planner, this amounted to an invitation to take the gloves off.

In December 2019, Mr. Thomas presented the Planning Board with his “evaluation,” which consisted of not so much a neutral analysis as a multi‑count indictment.  His scathing conclusion:  Article XXVI “does not support the general welfare of the community, does not support the community’s General Plan goals and objectives, and is not equitable.”

Mr. Thomas stopped short of recommending that Council ask the voters to rescind Article XXVI.  But Mr. Knox White’s hands were not similarly tied.  Together with Mayor Ashcraft, he successfully got a repeal measure – Measure Z – placed on the November 2020 ballot.

Measure Z, of course, was resoundingly rejected.  (We’re still not sure whether the reason for the defeat was that voters wanted to preserve single‑family housing or that they were put off by the offensive campaign waged by some of the measure’s proponents.)  So now, it appeared, the only way to get rid of Article XXVI would be to subject it to death by a thousand cuts.

It fell to Mr. Thomas to wield the knife.  And he sliced and diced with precision.

The City Planner laid the groundwork in February 2021, three months after the defeat of Measure Z, by telling Council that he needed “guidance” from HCD about a “proposed approach to reconciling” Article XXVI and state Housing Element law.  Not only did Council authorize him to write a letter asking HCD for advice, but Paul McDougall, the HCD staffer to whom the letter would go, showed up at a Council meeting to offer it on the spot.  (Exactly who invited him was never made clear on the record.)

Thrown a series of softballs by Mayor Ashcraft, Mr. McDougall insisted that Article XXVI “conflict[ed]” with state law and warned that, when the City submitted its draft Housing Element, HCD “would be looking for programs to address, and possibly remove” the Charter provision.  And if the City didn’t do so?  In that case, HCD wouldn’t certify the Housing Element, and Alameda would suffer the consequences:  Denial of access to state grants.  Lawsuits by the Attorney General and private parties.  Loss of control over land use.  The list went on and on.

Knowing full well what Mr. McDougall would say, Mr. Thomas asked him to put his views in writing.  Mr. McDougall was happy to oblige.  “Collectively,” he wrote to Mr. Thomas, the multi‑family prohibition and density limitation imposed by Article XXVI “prevent the City from complying with State Housing Element Law and other housing laws, and potentially trigger consequences related to a lack of housing element compliance.”

Thereafter, as Mr. Thomas worked his way through successive drafts of the Housing Element, he justified virtually every one of his proposals by arguing that “state law required” abandoning the restrictions established by Article XXVI.   And he almost always included an admonition about what the state (and private parties) could and would do to the City if it submitted a draft that didn’t satisfy those requirements.

The City Planner proceeded one step at a time.

His initial challenge was to come up with a “site inventory” containing 5,353 new housing units, the number assigned to Alameda as its share of the Regional Housing Needs Assessment.  Relying on the precedent set in 2012, he proposed creating another “multi‑family overlay” and applying it to shopping centers, the Park and Webster Street business districts, and a couple of individual sites.

Not even Article XXVI’s most avid defenders objected to this proposal:  state law did require the City to zone (or re‑zone) land to “make available” the RHNA‑mandated number of new units, and, if another multi‑family overlay was necessary to enable it to hit the target, that was okay.  In such a case, Mr. Thomas and the Article XXVI defenders agreed, the state‑law requirement “preempted” the Charter provision.

But Mr. Thomas had more than a repeat of the previous Housing Elements in mind.  He didn’t want merely to apply a multi‑family overlay to specific sites – he wanted permit multi‑family housing and residential densities greater than 21 units per acre everywhere in Alameda.  Nor did he conceal his intent:  the very first draft of the Housing Element presented in July 2021 called for up‑zoning five of the six residential districts.  (The R‑1 district already had been effectively up‑zoned by SB‑9).

This time, however, Mr. Thomas could not defend his proposal on the grounds that the recommended action was necessary to enable the City to meet its RHNA obligations.  In a way, he’d done his job too well.  After several months, he came up with a site inventory showing that, without having to touch the zoning for any residential district, the City could generate more than the RHNA‑mandated number of new units over the next eight years.

So Mr. Thomas had to look for another justification for the proposed residential up‑zoning.  He found it in the statutory language requiring a city to take “meaningful action” to “affirmatively further fair housing.”  This language, he pointed out, imposed a state‑law obligation separate and apart from the duty to meet the RHNA target.  And, as Mr. Thomas interpreted it, the City could satisfy this obligation only by re‑zoning entire residential districts to permit the type of housing that Article XXVI forbade.

The “fair housing” argument was not one Mr. Thomas concocted on his own.  During his  performance before Council and in his subsequent letter to Mr. Thomas, Mr. McDougall himself had suggested it.  (“The Measure A Provisions,” he wrote, “deny fair housing choices and as a result are fundamentally contrary to AFFH.”)  Mr. Thomas took the hint.  Were Alameda to submit a Housing Element that remained true to Article XXVI, he told the Planning Board, “I guarantee you the very first comment we will get back from them, among seven pages of comments, will be, ‘You’re prohibiting multi‑family housing in residential zoning districts?  No, that’s not going to work, Alameda.’”

By May 2022, Mr. Thomas’s work was done.  He’d drafted a Housing Element that met the state‑law requirements, as he and Mr. McDougall interpreted them, for both RHNA and “fair housing.”  After running the draft through the Planning Board (but not through Council), he sent it off to HCD – and three months later he got a letter from Mr. McDougall declaring the draft to be “in substantial compliance with State Housing Element Law.”

At that point, the game was over.  By not seeking advance sign‑off from Council, Mr. Thomas denied Councilmembers the opportunity to suggest modifications to any of the provisions (such as the one for up‑zoning residential districts) in the draft he submitted to HCD.  Moreover, once HCD had blessed the document, any Councilmember considering a no vote could be accused of harboring an intent to defy state law.

In any event, the ultimate approval by Council appeared to be a sure thing.  The HCD‑endorsed draft achieved, albeit indirectly, the objective that had led Mayor Ashcraft and Councilman Knox White to put Measure Z on the ballot two years earlier:  the evisceration of Article XXVI.  Councilwoman Vella, as usual, could be counted on to follow Mr. Knox White’s lead.  The dissenters – Council members Trish Spencer and Tony Daysog – were left to cry in their beers.

But Mr. Thomas was taking nothing for granted.  Mr. Knox White had announced his decision not to run for re‑election in November.  What if a less enlightened candidate got his seat?  In such a case, the approval vote might go from 3‑to‑2 to 2‑to‑3.  So Mr. Thomas scheduled the vote for a date before the new Council took office.  That way, Mr. Knox White would still get to raise his hand in favor.  And that’s what he did:  on November 15, the current Council approved the Housing Element by a one‑vote margin.

As a former President once said, “Mission accomplished, Mr. Thomas.”

* * * * *

Now, we admit that, in portraying Mr. Russo and Mr. Thomas as worthy heirs of Machiavelli, we’ve drawn logical inferences from the objective facts.  And we’ve inferred motive from conduct.  This methodology is not unique:  it’s what juries are asked to do all the time.  But it’s not infallible:  Maybe both Mr. Russo and Mr. Thomas were simply doing their jobs – negotiating employment contracts and drafting planning documents, respectively – without having any policy objective or political agenda in mind.

Still, we can’t help but imagine a scene in which, before leaving Alameda for his new job in Riverside, Mr. Russo calls Mr. Thomas into his office and hands him a well‑thumbed playbook.  “Here’s the way I do it,” the City Manager tells the City Planner. “You’re going to want to use this some day.”  And so he did.

Sources:

Firefighters’ union 2013-2017 MOU: 2012-12-11 staff memo re IAFF MOU

Housing Element: 2021-07-06 Ex.1 to staff report – Draft Housing Element Housing Opportunity Sites; 2022-11-15 – Resolution (draft H.E. attached) (clean copy)