City Manager Sheryl Sculley Has Her Detractors. We Sort Out a Few of the Reasons. 

click to enlarge JEREMIAH TEUTSCH
  • Jeremiah Teutsch
Editor's Note: The following is Their Town, a column of opinion and analysis.

The next time something hits the news about City Manager Sheryl Sculley – especially if it’s about her pay or performance bonus – turn on talk radio if you’re not already listening.

Angry people.

It’s not much different on social media, especially Facebook. Link to the latest story on city council granting another big bonus to Sculley, with elected officials showering her with praise, and wait for the rage to roll in.

Sure, people go to social media and talk radio to be angry. These forums often highlight the extremes of people’s opinions. But they also show you what’s in the public’s bloodstream.

Lower-voltage Sculley-bashing surfaces in casual conversations with friends and co-workers, in community meetings, in old-fashioned letters to the editor. City council members, who hold the power to fire, censure or reward Sculley, see this anger more than anyone as they work their districts.

When he was campaigning last year in District 8, Councilman Manny Pelaez said it wasn’t uncommon for voters to complain to him about street conditions and then say the city could solve the problem just by taking Sculley’s compensation and putting it into repairs.

“They weren’t kidding – that made mathematical sense to them,” said Pelaez, a supporter of Sculley, who will earn $475,000 this year plus a $75,000 bonus for her performance in 2017. You can’t repave many streets or build many sidewalks with that kind of money.

“The thing is, [these constituents] are frustrated with government,” he added, “and she’s the face of city government.”

San Antonio government works under the “weak mayor-strong manager” system, which a lot of cities adopted in the mid 1900s to neuter political machines. Essentially, the mayor and city council set policy, and the city manager executes it. As a result, the city manager is behind so much of what shapes your everyday experience – street conditions, library hours, how good or bad the airport is, protection from crime, and hundreds of other things. It’s difficult getting your head around someone who’s unelected holding that much power.

But look at other cities with city managers, including Austin and Dallas. Unless they’ve done something colossally stupid or corrupt, they don’t take the same degree of heat that Sculley frequently does.

Why her?
FACEBOOK / GEORGE H. RODRIGUEZ‎
  • Facebook / George H. Rodriguez‎
It’s a tangle of reasons. But each of them relates in some way to the fact that Sculley has changed city government profoundly, in ways good and bad.
These are the strands:

• Sculley is a sharp executive who was brought in from Phoenix in 2005 to end amateur hour at City Hall. She ran off or demoted many of the locals, and brought in more out-of-towners to help run the show, including Police Chief William McManus and Fire Chief Charles Hood. There’s still a residue of resentment among the natives. Beyond the world of City Hall, Sculley will always be an outsider.

• Sculley dominates in a field dominated by men. “She’s playing three-dimensional chess while everybody else is playing checkers,” San Antonio political consultant Laura Barberena said. She’s as hard and corporate as they come. You could be on fire, or she could be on fire, and she’d still maintain eye contact. If you’re an unprepared underling or you’re lodging a poorly-thought-out criticism or question, her gaze can feel like the pin that holds you wriggling to the back of the specimen box. We expect this demeanor from male CEOs, but many are unnerved when women behave this way. So, yeah, there’s some sexism at play here.

• After nearly 13 years on the job, Sculley is thoroughly entrenched. The city organization – with 12,000 employees and an annual budget of $2.7 billion – is now essentially a reflection of her will. She has longstanding ties to San Antonio’s business and civic leaders that are entirely independent of her bosses, the mayor and city council. In fact, these chieftains are some of her most ardent defenders. Just ask County Judge Nelson Wolff about her elite support. After making a joke in January about filling the San Antonio Symphony’s financial hole with Sculley’s salary, he said he got concerned calls from several bigwigs, including former Mayor Phil Hardberger, prompting Wolff to write a letter to “clarify” his joke. Any hint that her job is in jeopardy, and you can expect a lot of corner offices in this town to become mini-war rooms. We mortals recoil at that kind of power.

• Sometimes it’s hard to tell whether Sculley and her team are making policy or executing it. Consider her recent decision to allow developer Mitch Meyer to build apartments next to the Hays Street Bridge, albeit with several restrictions. In doing so, she overruled the Historic and Design Review Commission, and flouted the project’s opponents. Sculley had the authority to make the move, but she looked like the strongest of strong mayors. “People’s frustration with her is because of that gray area,” Pelaez said, “and she’s not shy about operating in that area.”

• When the city challenged the 10-year “evergreen clause” in police officers’ and firefighters’ contracts in court in 2014 – a clause that keeps the agreements’ provisions in force even if there’s no new deal – the unions went after her publicly and all-out, seeing the move as a betrayal. The police union has mostly gone quiet since reaching an agreement with the city in 2016, but the fire union is still hammering away at her standing.

• Finally, Sculley is a very well-paid municipal employee. By comparison, Austin’s city manager earns $309,000, and Dallas’s makes $375,000, though neither have as many years on the job as Sculley. But she works in a city where many families have been unable to keep up with the median household income at the state and federal levels. This is a blue-collar town. How many San Antonians receive performance bonuses?

Her employment contract – the money – is usually the prism through which the other strands come into focus.

The Smallest Big City

KTSA talk-show host Jack Riccardi and his listeners spend a lot of time talking about Sculley, though she’s never been on his morning show. Her compensation is usually the reason they flood the phone lines. He said callers grew alarmed in 2009 when it made the news that council members hadn’t read Sculley’s contract extension even though they were scheduled to vote on it. That got his audience thinking more about the size of her salary and bonus package, and that she wasn’t living by the same rules as other people.

“It was very out of character for our city,” Riccardi said of her compensation, “especially considering our median income” – which for households was $48,000 in 2016, according to the U.S. Census. “And there’s not an attitude of humility or even self-awareness. Even the San Antonio Spurs have a graciousness about their [pay]. That’s why nobody complains about their big salaries.”

That goes to show you can’t escape the tug of San Antonio history.

German merchants helped set the tone a century and a half ago when they balked at raising taxes for essential infrastructure such as drainage. That small-government mindset – which has never worked out particularly well for San Antonio’s Latino and African-American communities – isn’t as prominent, but it’s still here.

It showed up in spring 2005 when the city council under then-Mayor Ed Garza selected Sculley as the finalist for city manager, and worked up an offer of $265,000. Then-Councilman Julián Castro, in a close mayor’s race against Phil Hardberger and council colleague Carroll Schubert, came out against the compensation package, calling it too rich. Sculley pulled herself out of consideration shortly after Castro’s news conference.

For what it’s worth, Castro won the race but landed in a runoff with Hardberger, who then clobbered his much younger rival and re-recruited Sculley. Looking to set the tone for his new administration, Hardberger cast her hiring as a decisive break, a sharp turn toward a more ambitious, professional city government.

After years of underinvestment and largely piecemeal street and drainage work, the city went on a tear when Sculley took control. There was a glut of major projects, from the Museum Reach, Haven for Hope, Hardberger Park and the “Decade of Downtown” giveaways to developers and employers to Pre-K for SA and improved city services.

In almost no time, a sleepy municipal government had gotten caffeinated and turned activist.

The city’s general fund – which pays for police and fire protection, libraries, parks, senior centers and other basic services – lurched from $701 million in fiscal year 2005 to $1.1 billion last year, a growth of more than 60 percent, according to an analysis of the city’s audited annual financial reports.

But the more breathtaking increase was in debt spending.

Under Sculley, the city’s debt burden jumped 78 percent between fiscal years 2005 and 2017, reaching $3 billion as of September 30. Those borrowings include general obligation bonds, which voters approved, and tax notes and certificates of obligation, for which voters didn’t have a say.

Not surprisingly, a dollar amount that big or a growth rate that high comes with qualifiers. San Antonio’s strong population increases over the last 13 years – new residents mean higher demand for city services – is one. The priorities set by city council is another.
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  • City of San Antonio/Facebook
There’s also Sculley’s tight grip on the city’s finances. Despite the sharp increase in general-fund and debt spending, she has boosted city government’s financial reserves, essentially its rainy-day fund, to a high 15 percent of revenue. That’s one of the main reasons San Antonio has maintained a AAA rating from the Big 3 credit-rating agencies.

That rating, enjoyed by no other major city in the United States, allows San Antonio to borrow (that is, to sell bonds to investors) at low interest rates, saving millions in interest expense had the rating been just one or two notches lower.

Sculley’s financial management has also cleared the way for several record-breaking bond elections, including the $850-million debt issue that voters overwhelmingly approved nearly a year ago. None of them required an increase in property tax rates.

Sculley and her people portray the three consecutive winning bond elections under her watch as San Antonians’ stamp of approval on her administration – or at least the handful who voted.

When I asked for an interview with Sculley, this is the response I received from Jeff Coyle, director of the city’s public affairs office: “As you know, the elected mayor and council evaluate the city manager’s performance annually and did so recently… We do not do any public opinion polling on job performance; however, we believe the overwhelming voter approval of city of San Antonio Bond Programs is reflective of the public’s confidence in their city government.”

Coyle also forwarded the 17-page memo that Sculley gave to council members as they considered her bonus, highlighting her 2017 accomplishments. They included the $850-million bond package, $90 million in health-care savings, a shiny new fleet of electric river barges and the city’s response to Hurricane Harvey.

Her way with numbers is also at the heart of Mayor Ron Nirenberg’s support for the city manager.

“Sheryl Sculley’s fiscal management has helped earn San Antonio a coveted AAA rating from all three bond rating agencies for eight years in a row,” the mayor said in a written statement. “That rating saves millions of dollars for the taxpayers of San Antonio. She earns every penny of her pay.”

But Wall Street talk – of rating agencies and interest expense – doesn’t register with most people.

Backlashes

Many of the San Antonians who think Sculley’s salary is obscenely high probably also believe that city spending is out of control, and that the city is growing too quickly and natives are losing ground to the newcomers – both in the cultural life of San Antonio and in neighborhoods like Dignowity Hill where new arrivals are displacing longtime homeowners. Talking about her contract is shorthand for these frustrations.

The San Antonio Professional Firefighters
click to enlarge CREATIVE COMMONS
  • Creative Commons
 Association is capitalizing on this anger in its push to put three city charter amendments on the November ballot. One of the changes would cap the city manager’s compensation at no more than 10 times the earnings of the lowest-paid city employee, and prevent him or her from staying on the job for more than eight years. If it gets on the ballot and voters approve, the amendment wouldn’t affect Sculley, but it would hamstring city council when it’s time to look for her replacement.
The other amendments would make it easier to put city ordinances to a public vote, and bar the city from resorting to the courts in fights over labor agreements.

In an interview with the Current last month, union President Chris Steele said the goal was to take power away from the City Hall insiders and give it to voters. “The people are the smartest ones,” he added, “and they run this city.”
District 6 Councilman Greg Brockhouse, who worked as a political consultant for the fire union, helping its leaders sink the proposed downtown streetcar in 2014, is the toughest critic Sculley has yet faced on the council dais. He sometimes talks about her administration as if it was a black box, without transparency or accountability.

The fire union and Brockhouse aren’t alone in publicly pillorying Sculley. She was a major target in the 2017 city elections. County Democratic Party chair Manuel Medina often spent more time blustering about Sculley than he did going after Ivy Taylor or Nirenberg in the mayor’s race. In his telling, she was the overpaid Svengali who’d hijacked council and was loading up San Antonio with debt, which he likened to a J.C. Penney’s credit card.

The same themes popped up in council races, including the one in District 9 on the North Side. John Courage wasn’t the most outspoken Sculley critic on the campaign trail, but he was one of them.

He was one of three council members who sided in January against the 2017 bonus of $75,000 for Sculley. “Anything over and above [her salary] is because you did something extraordinary,” he said. “I just don’t see that she did anything truly extraordinary in 2017.”

Part of what bothered him and others was the lack of written criteria in determining whether Sculley deserved a raise – a shortcoming Nirenberg is fixing.

Yet Courage has softened on the city manager since his election last June – as often happens with new council members, who have to negotiate with her and her staff every day to deliver on campaign promises and secure projects for their districts. He thinks she’s a strong executive and has hired well, that her lieutenants and department heads are first-rate.

“Sometimes I’m concerned that her influence is moving the dial more than we’d like,” he said. In other words, she occasionally veers onto council’s turf. But Courage said he doesn’t want to make a public thing out of his couple of concerns.

Sculley’s job is to keep Courage and his 10 colleagues happy, and, on balance, she’s succeeded spectacularly. As for her detractors, they’re mostly among the 1.5 million sitting on the sidelines.

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