South Pasadena’s two-year-old quest to hire a permanent finance director took another blow this month when the latest recruit ditched the City’s offer in favor of a counteroffer from her existing employer. That employer, the South Pasadenan News has learned, was the City of Pico Rivera.
The development left the City “back at square one,” City Manager Arminé Chaparyan told the city council October 19.
The opening has already been reposted, but the City hasn’t disclosed its strategy for filling the job going forward while positioning itself to be without a permanent finance director through as late as June 30, 2023. The revised timing means a new finance director likely won’t be in place until after the city’s latest audit is completed, and well into the next budget cycle.
While noted in a consent item staff report, Chaparyan spoke of the failure of executive search firm Peckham & McKenney’s recruitment in response to a question from Council Member Evelyn Zneimer. The City paid just under $25,000 for the months-long recruitment, which Chaparyan has previously described as both “extensive” and “national.”
Eight candidates replied, two of whom were referred for interviews with the city manager, deputy city manager and interim finance director. The job was offered to and accepted by one candidate, “but [her] current employer countered the offer with a promotional opportunity for a director position”–an offer she accepted, the staff report said.
Deputy City Manager Domenica Megerdichian told the South Pasadenan News the second candidate referred for interviews was not offered the job because that candidate’s experience “did not fit what we were looking for, and they shared with the recruiter that they did not think they would be a good fit.”
Pending the renewed search, council approved a contract with Upland, CA-based MV Cheng & Associates, a municipal finance staffing firm. MV Cheng will provide one of its employees, retired former South Pasadena assistant finance director/controller Maida Alcantara, to serve on a part-time interim basis for $120/hour, compared to the $78.87/hour the City would pay under the mid-range of the proposed salary for a permanent director.
It is unclear when the City expects to have a permanent finance director. Ken Louie, Interim Deputy City Manager–Finance, is scheduled to depart in mid-December. A long-planned third-party “assessment” of the finance department, which City Manager Chaparyan previously said would not commence prior to the onboarding of a permanent finance director, and which was previously set to begin early next year, is now set to start next spring.
In addition, the MV Cheng contract for a the new part-time interim director, which commenced October 24, has a termination date of June 30, 2023–the end of fiscal year. One expert said it’s not unusual for certain types of contracts to be termed though the end of a city’s fiscal year–for example, in case a city wishes to avail itself of added services even once the principal task is complete. Under the MV Cheng contract, which is capped at $115,200, it is unlikely there would be funds to pay Alcantara past February.
The City did not directly respond to a question about the reason for the contract’s termination date.
Alcantara worked for South Pasadena between July 2002 and December 2007. “One of the two best hires I ever made,” former South Pasadena Finance Director Josh Betta said this week. She has served with over a half dozen other municipalities, including in Signal Hill, Chino Hills, Sierra Madre and until this month Monterey Park. She’s also served as finance chair for the Holy Family School.
She “has already been providing part-time assistance to the department, and will bring with her previous high-level experience, depth of experience, and professionalism and leadership,” the staff report stated.
Alcantara is the third interim city finance director since the departure of Karen Aceves, whose seven-month tenure as finance director ended in August 2020, when she took a family leave and subsequently resigned.
South Pasadena’s difficulties locating qualified finance department personnel stand out but are not unique.
“There is definitely a recruitment issue that has been happening over the past several years,” MV Cheng President and CEO Misty Cheng told the South Pasadenan News.
Cheng, who besides Alacantara has one other contract employee stationed in South Pasadena’s finance department, said there are a number of reasons California cities are having a tough time recruiting, especially over the past five-to-ten years.
One is the competition among many cities recruiting for similar positions. Another is as baby boomers retire, many cities haven’t had sufficient succession planning in place. That means in-house candidates aren’t as well prepared, while outside candidates from the private sector, which uses different accounting processes, are without the appropriate experience. They must learn on the job without proper guidance and support from experienced municipal officials. Candidates are also looking for “qualify of life benefits” such as shorter commutes, she said.
Another critical factor for employees with municipal experience is the changes that have been made to the state’s retirement program, PERS. There are different tiers and formulas for PERS benefits, and these are not necessarily transferrable when going from one government job to another.
“Once the new retirement formula kicked in,” Cheng said, “a lot of people either retired or decided to stay put at their city.”
On the bright side, Chaparyan reported a recruitment for the new position of assistant finance director/controller. No name was disclosed, but the candidate has accepted the offer and Chaparyan said the new person is expected to join the city in late November.
In its second-ever monthly operational report—a new procedure undertaken in connection with this year’s recommendations from the Finance Ad Hoc Committee–staff also reported 29 open recruitments citywide, including 4 with signed offers. Seven of the 29 are in the public works department; 6 in the police department; 4 in both in community services and the library; 3 in the fire department; 2 each in the finance and community developments; and one in management services.