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Monday, Sept. 10, 2007 | When the dispute over the height of the Sunroad Enterprises office building worked its way up City Hall’s chain of command in December, Mayor Jerry Sanders was receiving competing advice from within his camp.
On one side, a key political advisor recommended taking a hard-line against the developer, sensing the city could better control the public repercussions over mistakes the mayor’s bureaucracy made in handling the project.
On the other, a seasoned development official sought to resolve the clash through compromise, a strategy he said was the best way to protect the city legally and financially.
But after choosing to pursue the latter advice, Sanders embarked on a course that has proved to be a political nightmare for his administration.
“Obviously, it was the wrong decision,” Sanders said in a recent interview. “I misread the entire issue.”
That debate in the Mayor’s Office, where political advisors and bureaucratic managers compete for Sanders’ ear, is illustrated in interview summaries used by the mayor’s Office of Ethics & Integrity to compile the report on the Sunroad matter issued in July.
The Sunroad report documents, recently obtained through the state Public Records Act request, and subsequent interviews with mayoral officials depict the office as a setting where impromptu meetings are the norm and hardly anything discussed in those sessions is written down. These “drive by meetings,” according to the interview summaries, can sometimes touch upon several topics and are just as likely to occur around the water cooler as at a conference table.
High-level administrators, brought in by Sanders for their administrative or business acumen, butt heads with the political operatives who consult the mayor on the likely consequences of every decision.
Sanders himself prefers delegating work to micromanaging. He also receives information through the filter of his aides rather than the news media. By abstaining from e-mail, he forces communication to take place over the phone or face-to-face.
While his budgets and financial plans have been dissected publicly, the operation of his office and his deliberation process are lesser known sides of Sanders, the first modern San Diego mayor to be in charge of the entire city bureaucracy.
Although it’s not highlighted within the Sunroad report itself, a flavor of the inner workings of Sanders’ office can be gleaned from the supporting documents that were used in the crafting the report.
“If you want to really want to know something about an organization, watch it in crisis,” said Stephen Standifird, a business professor at University of San Diego. “See how it responds.”
The mayor’s handling of Sunroad provides a case study of Sanders’ management style, who was elected in 2005 after flashing his experience as a successful manager of the San Diego Police Department and various nonprofits. His resume, he said, showed that he was capable of “turning around troubled organizations” and that he could manage the city of San Diego, reeling from multibillion deficits, back to financial safety.
Management experts say the details show Sanders handles his administration the way many executives do. But they caution against judging it.
“The main message is that there’s no one best way to do things,” said professor Frank Schultz, who teaches courses on leadership and strategy at the Haas School of Business at University of California, Berkeley.
The climate for top-level discussions within the Sanders administration appears to accommodate various points of view, but it’s also designed to move swiftly, experts said. The rapid manner in which aides said they dealt with myriad issues is demonstrative of newer corporations that are designed to breed innovation, such as Google. Those organizations lack the structure and formality ingrained into older companies, such as automakers like General Motors and Ford, they said.
“It’s more characteristic of a smaller, younger organization that is trying to be entrepreneurial and innovative,” Schultz said. “The way decisions are made are in entrepreneurial situations are more flexible, whereas you get older organizations that tend to have more rules and procedures.”
The city of San Diego is hardly a software startup in a makeshift basement office. The municipality has been operating as an incorporated city since 1850. Today, it’s comprised of more than 10,000 employees and operating with a $2.89 billion annual budget. And the more formal rules that Schultz speaks of are part of the everyday operation within the lower and middle levels of the city bureaucracy. Sanders has tried to firm up those procedures through a streamlining initiative called “business process reengineering,” or BPR.
However, the city’s guidelines did not protect against the construction of the Sunroad on Sanders’ watch. The investigation by his own Office of Ethics & Integrity found that city officials showed poor judgment and missed warning sides that would have prevented or caught Sunroad before it erected a Montgomery Field-area office tower taller than the Federal Aviation Administration allowed.
But while Sanders tries to shore up the city’s operations through the ongoing studies involved in the BPR process, the meetings involving Sunroad appeared to be held on the fly.
By not using e-mail, Sanders appears comfortable with limiting his interaction with others and allowing top aides to mediate the information he is given.
“The idea there is that he’s going to select a really good group of advisors who will then filter the world in a smart and relevant way got him,” said David Schkade, a professor at the University of California, San Diego’s Rady School of Management. “With limited time and energy, this is bound to be more relevant for the mayor.”
In an interview, Sanders said he prefers not to use e-mail because he believes people use it to say “inappropriate things” and because electronic messages can be taken out of context — especially by reporters who request them. Additionally, he thinks “people say things in e-mails they wouldn’t say in person.”
The absence of that communication means access to Sanders is more difficult. As a result, the advisors who are near him more frequently become more influential, experts said.
The practice is indicative of another strategy of Sanders, which is to allow the experts in his administration to handle the intricacies of issues. The mayor has instead adopted a penchant for frequently holding press conferences and attending public events to champion the ideas of his administration and other causes outside City Hall that he deems valuable to San Diego.
Sanders acknowledges that farming work out to aides on his behalf became problematic in at least one point in his handling of Sunroad. He told reporters in June that a top airport executive was brought over to the city to help improve the efficiency of operations at two municipal airports. But it later surfaced that Sanders had signed and sent a letter in March to the San Diego County Regional Airport Authority asking to borrow one of its executives, Ted Sexton, to work specifically on the Sunroad dispute.
Sanders said later that he doesn’t remember signing the letter and that it was prepared by an aide. The gaffe set off a debate about the mayor’s oversight of the issue and whether he was trying to cover up the behind-the-scenes maneuvering of Sexton and others to accommodate the Sunroad building.
And when it came time to chart a strategy on Sunroad, the mayor chose the advice of Jim Waring, the former businessman who until recently oversaw the city’s land-use departments, over that of politically minded Communications Director Fred Sainz.
The debate within the Sanders camp also illustrates the internal debate within his office between aides whose value is in their political advice and those who are in charge of the day-to-day running of the bureaucracy.
Political hands such as community and legislative services chief Kris Michell and Sainz, two former aides to Mayor Susan Golding in the 1990s, provide Sanders with the strategy in selling his mayoral agenda.
Sainz is portrayed in his interview summary as disagreeing with Waring, a former attorney and real estate developer. Waring was part of a team that included several business and military leaders that Sanders recruited into his administration for their knowledge of operating large organizations and improving the efficiency and quality of the city government.
By following the advice Waring, the city allowed Sunroad to continue work on its building, despite the warnings of outside agencies and City Attorney Mike Aguirre, and embarked on a path that appeared to appease a campaign supporter’s company rather than rein in a rogue developer.
“That was their political fear,” Waring said in a recent interview. “If you look back on the effort we made to come up with a solution, it’s been mischaracterized as being pro-Sunroad and detrimental to the city.”
The path chartered by Waring was more complex than the one proposed by Sainz and more difficult to explain publicly. Sainz told investigators he wanted to take a hard line against the Sunroad project, which at 180 feet drew warnings from the FAA and the California Department of Transportation that the Montgomery Field-area tower could be a hazard to nearby aircraft.
Sainz said that once the facts of the Sunroad dispute were realized, it was “clear in his mind that the city had made a number of critical errors with respect to their part in the Sunroad project and adopted the position that the City should accept and state their own errors and accept that part of the responsibility,” according to his interview summary. “Mr. Sainz advised that he and Mr. Waring clearly differed in their opinion with respect on how to move forward.”
Waring, on the other hand, said he was motivated to solve the problem separate from the lawsuit Aguirre filed against Sunroad. By negotiating a solution that could settle the litigation and please the FAA, the city could’ve dodged a possible $40 million liability that the company was seeking in a lawsuit for approving the building at a height that was above the FAA’s height limit.
The decision to seek a compromise was one Waring fought for until his last day on the job, Aug. 14. Long after Sanders decided to press the developer to lower the building to 160 feet, Waring met with Councilwoman Donna Frye to ask her to consider allowing portions of the building to remain above the FAA’s threshold. Waring was promptly forced out after his meeting with Frye was revealed.
The move was the last remnant of a strategy that transformed into the first scandal of the Sanders administration, and one that Sanders regrets.
“Jim gave me advice all the way through,” Sanders said in a recent interview. “I didn’t have to take it, but I did.”
To management experts apprised of the details, the dynamic in Sanders’ office is typical of any business or organization.
“Anytime you have multiple constituencies in your organization, there will inevitably be conflict,” Schkade said. “The operations people versus the people looking at strategy is a very common conflict in an organization.”
The divide between advisors of a political ilk and the operational administrators was seen in another corner of the office. Ronne Froman, the former Navy admiral who Sanders tapped as the chief operating officer that would run the day-to-day workings of the city, told investigators that she shied away from working on the Sunroad issue and was never formally briefed through reports, memos or e-mails.
While assessments of the Sunroad situation were initially made within the city’s development, planning and airport agencies, which she oversaw, Froman said that once Sunroad became a “political topic,” her involvement became very limited, according to her interview summary. As the second-highest ranking official in city government, Froman’s participation in managing the controversy was almost non existent.
“Ms. Froman again clarified the fact that her responsibilities demand she focus her attentions completely on the day to day operations of the city government and not in any way on the political side of any particular issue,” according to her interview summary.
Froman left the administration in June, at the same time she was supposed to be conducting the Sunroad report, handing off to the city’s ethics office.
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