When Stockton hired a new interim city manager with no experience in civic operations, city councilmembers assured the public their new pick was qualified to take on the role.
Just a few days later, and without council approval, he hired an $11,000-a-month consultant to help him do his job, according to public documents obtained by Stocktonia.
That’s on top of the more than $20,000 salary interim City Manager Steve Colangelo is being paid each month.
The contract — which was signed without council approval and was issued without taking competitive bids — went to a consultant who also has a full-time job: Lathrop City Manager Stephen J. Salvatore.
Colangelo was hired as Stockton’s interim city manager in February despite concerns from the community and some councilmembers that he wasn’t qualified for the job. A career events manager, Colangelo had been CEO of the San Joaquin County Fairgrounds but had never worked in city management.
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 and would only serve as Stockton’s city manager temporarily until a permanent replacement could be found.
“Steve isn’t a career bureaucrat, and that’s exactly why he’s the right choice for Stockton,” Fugazi said in a press release announcing Colangelo’s appointment. “His deep commitment to our city and proven leadership make him the best person to take on this critical role.”
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 a career bureaucrat, Salvatore, “in an advisory role, providing strategic guidance … on best practices in municipal management.”
Salvatore has worked for Lathrop for nearly two decades, a majority of which has been spent as city manager. Lathrop, located in south San Joaquin County, is about one-eighth the size of Stockton.
“He will not assume any policy-making authority or operational control over the City’s functions,” Colangelo wrote in his Feb. 27 memo of the consulting services Salvatore would be providing. “His role will be focused on offering insights and strategic recommendations to support Stockton’s interim leadership.”
Colangelo did not respond to Stockonia’s questions about why he needed to hire Salvatore, or what exactly Salvatore’s consulting services include.
It’s also unclear if Salvatore is allowed to enter into a long-term consulting contract under the current terms of his employment with the city of Lathrop. City officials did not respond to Stocktonia’s questions about the issue.
Internal emails obtained through a public records request show some concern by at least one Stockton staffer who suggested the approval process for Salvatore’s consulting contract seemed to ignore standard or best practices, as the city opted to move forward with hiring Salvatore without confirming a funding source. The city also agreed to waive the liability insurance typically required of outside consultants and contracted vendors.
City officials did not immediately reply to Stocktonia’s questions regarding the process by which Salvatore’s contract was awarded.
Vice Mayor Lee and Councilmembers Michele Padilla and Mariela Ponce, all of whom voted with Mayor Fugazi to appoint Colangelo, did not respond to Stocktonia’s questions about whether they were aware of Salvatore’s hiring.
Mayor Fugazi, in an email, said Colangelo had “acted well within his authority to consult and contract services under his discretionary budget.”
“I commend him for being proactive and tapping into the expertise of one of the region’s most seasoned city managers,” Fugazi said in a statement responding to questions Stocktonia emailed to her office. “With over a decade of leadership in one of California’s fastest-growing and fiscally sound cities, Mr. Salvatore brings valuable insight that will only benefit Stockton moving forward.”
Fugazi did not say whether she knew about the contract prior to being asked about it by Stocktonia.
She also didn’t answer other questions: What she thought about the contract procurement process in light of the new council’s declared commitment to transparency and fiscal responsibility, or why Colangelo needed Salvatore’s services if Colangelo’s job was only temporary and by not being a “career bureaucrat” was what made him “exactly … the right choice for Stockton.”
She also didn’t respond to a question asking whether or not she would support any bid by Colangelo to be Stockton’s permanent chief executive.
Stockton Councilmembers Michael Blower, Mario Enríquez and Brando Villapudua, who all voted against Colangelo’s appointment, said they’d been unaware of Salvatore’s consulting contract or that it was being paid for with city money.
“I think it is very concerning that a contract was put in place despite staff pointing out that it did not follow best or standard practices,” Blower said in an emailed statement to Stocktonia. “I am also not thrilled to have found out about all of this after the fact.”
Enríquez was thankful Salvatore’s contract had been brought to his attention while also expressing his surprise.
“As a Councilmember, I take seriously my responsibility to ensure transparency, accountability, and fiscal responsibility in our city government. Given that this appointment is interim, it’s especially important that decisions made during this transition period are approached with care, clear communication, and full transparency,” Enríquez said in an emailed statement. “Every decision involving public funds should not only follow established procedures, but also reflect the trust our community places in us. Maintaining strong oversight and open dialogue is essential to upholding the standards our residents deserve.”
Villapudua told Stocktonia that his role as a councilmember was to set policies, not manage day-to-day operations. He hadn’t known about Salvatore’s contract and said questions regarding it should be addressed to the mayor and vice mayor. But he did say that everyone needs help on things and that there’s always room to learn more, including for himself.
Despite voting against Colangelo’s appointment, Villapudua said he’s enjoyed working with the interim city manager. “I can’t bash him,” he said.
“There’s nothing we can do. He got the job, he’s the city manager,” Villapudua said. “It’s time to work with the city manager. And so far, he’s been doing a good job.”
But Villapudua is also looking forward to the process of finding a permanent city manager to replace Colangelo.
“When his time’s up, his time’s up. It’s time to look for someone else,” he said. “We’d want someone else with experience. It’s going to be a tough decision to come our way.”
Salvatore’s contract procurement: ‘Not best, or our standard practice’
Colangelo’s formal appointment as interim city manager came following heated discussion and a contentious 4-3 split vote at a Feb. 4 council meeting. He replaced acting City Manager Will Crew, a Stockton deputy city manager with decades of experience working for and with local governments.
Colangelo officially began working for the city Feb. 18, according to a city spokesperson. Salvatore’s contract is dated to the same day, though city staff emails obtained via a public records request show the agreement is backdated and wasn’t finalized until a month later.
Colangelo did not respond to questions on how or when Salvatore was hired or whether he’d reviewed any other candidates.
A memo sent Feb. 27 by Colangelo to City Attorney Lori Asuncion, explaining the agreement with Salvatore, pointed out the sole source contract was being awarded under the city manager’s discretionary authority and fell below the procurement threshold of $100,000, which would allow him “to exercise discretion in securing specialized advisory services without requiring a competitive bidding process.”
Salvatore’s six-month contract stipulates that his compensation — including reimbursements for any “reasonable and necessary business expenses” such as travel, mileage and clerical expenses — cannot exceed $99,000.
“This decision reflects the City’s determination that Mr. Salvatore’s unique qualifications and regional experience justify a sole source arrangement, ensuring the City receives targeted and effective guidance during this transitional period,” Colangelo wrote.
In another email obtained by Stocktonia through a public records request, Colangelo told Deputy City Manager Courtney Christy on Feb. 27 that “I would like to execute this today” when discussing some specifics of hiring Salvatore, such as insurance and tax documents.
There was some discussion March 2 regarding “revising the timing to match the initial term of your (interim city manager) placement agreement, terming out in August, but able to extend by mutual acceptance,” staff emails obtained through a public records request show. Salvatore then registered as a city vendor on March 18, while approval of his contract was still being discussed as late as March 20.
Colangelo also refused to submit the city form — Justification for Sole Source, Sole Brand or Single Available Source Procurement, known as an SSJ Form — that’s required to justify awarding a sole source professional services contract without competitive bidding.
His refusal to submit the SSJ Form was acknowledged in an email from Nicole Mamorno, a senior management assistant in Colangelo’s office, to city procurement specialist Stephennie Link, saying “per (Deputy City manager Courtney Christy) the Interim City Manager has declared his justification for a sole source in his memo and will not be providing the (SSJ).”
What has not been explained in public documents and emails obtained by Stocktonia is why two contracts for Salvatore’s services were drafted — one being a standard format submitted to City Council for approval and requiring signatures of the mayor, city clerk and city attorney, and the other being in the form of an agreement not requiring council approval where the city manager can sign in place of the mayor.
City records show that Salvatore signed both forms of the contract. Colangelo did not respond to questions regarding why there were two contracts drawn up.
Colangelo also did not respond to Stocktonia’s questions about why he did not seek the council’s approval or why, as an interim appointment needing training, hadn’t consulted with the council for guidance or approval of the contract.
Unexpected expenditures
When Salvatore was first hired, the city had not resolved where funds would be allocated from to pay for Salvatore’s contract, with one staffer noting that the city manager’s office could not initially support the contract financially.
Colangelo said in his February memo that Salvatore’s consulting services would be funded through the “City Manager’s Special and Professional Services account.”
City spokesperson Connie Cochran told Stocktonia that the account is a subsection of money in the city’s general fund budget allocated for various administration and support expenses incurred by offices identified in Stockton’s city charter, which includes the City Council, city clerk, city attorney, city auditor and city manager.
Although internal communications obtained through a public records request show that, while it was agreed this special account was the most appropriate funding source for Salvatore’s contract, one city official indicated it could initially put a strain on the account.
In a March 2 email, Deputy City Manager Christy said, “We can document that, holistically, the City Manager’s accounts will be overdrawn by the end of March, as we work through the City Manager transition.”
Christy noted that the city was already paying out a separation settlement and 12-month salary/severance for former City Manager Harry Black, as well as Colangelo’s interim contract, with both expenditures having received City Council approval without identifying a source of funding. She also pointed out that there were other possible expenses on the horizon as the city continued the city manager transition process.
Black was given more than $400,000 in severance pay and benefits by City Council, per his contract stipulations, when he was forced out earlier this year. All in all, the city could potentially be on the hook for more than $600,000 in pay and benefits alone as it transitions from one city manager to another when taking into account the money being paid to Salvatore, Black and Colangelo.
Moving forward with Salvatore’s contract without being able to confirm funding availability “is not best, or our standard practice,” Christy said in city emails, although she acknowledged it could eventually be worked out later.
“The alternative, and what we would typically do, is take the item to Council for approval of a budget appropriation to fund now, likely coming from Reserves,” Christy said.
Christy did not respond to emailed questions from Stocktonia asking for clarification on what the city’s best practices for approving a contract like Salvatore’s were, or why Salvatore’s contract apparently didn’t meet those standards.
City officials also did not respond to emailed questions about whether funds had yet been allocated to pay for Salvatore’s contract or whether the city manager’s accounts are overdrawn, as well as why the city agreed to move forward with a contract that staff deemed to be procured in a process below its typical standards.
Blower, who serves on the City Council’s Audit Committee and as an alternate for the Budget Committee, told Stocktonia that typically whoever is hired as an interim city manager doesn’t need the kind of training for which Salvatore’s services were procured.
“I don’t think it’s very common to hire someone to do a job for $20,000 a month and then have them hire someone else for an additional $11,000 a month to show them how to do that job,” Blower said.
In his 2022 contract renewal, former City Manager Black was allotted up to $7,000 per year for executive coaching paid for by the city, an amount that had increased to $10,000 by 2024.
Colangelo’s contract does not contain any city reimbursement for job coaching, although it does contain a clause where the city agrees to pay “reasonable sums” for professional dues and participation in appropriate organizations such as the League of California Cities, subject to review and approval by the city, with City Council having discretion to establish the amount allotted in the city’s annual budget.
Cochran, the city spokesperson, said it’s not unusual for the city to move around funding due to unexpected costs that pop up in the course of government operations. Because budgets are only financial projections created in advance and contain anticipated expenditures for the coming fiscal year, which can change, Cochran said funds are often reallocated within their original categories based on the city’s current needs.
Yet the unexpected cost of replacing Black came at the behest of City Council earlier this year when it forced out the former Stockton city manager.
Black resigned from his post in January in lieu of being fired, the result of a political shakeup on the council following the 2024 election. Only a few months earlier, Black’s contract had been extended for another four years, including a pay raise, following a positive performance review.
Out of the last five Stockton 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 was the other, making about $23,000 per month in salary as interim in 2009. O’Rourke, a former city manager of Fairfield with decades of experience, was chosen out of multiple candidates interviewed by the then City Council.
The other three were Stockton deputy city managers, who either received around $4,000 a month in special assignment pay added to their salary or did not receive any additional compensation to do the job, according to city records.
Before getting the job permanently, Salvatore himself served as Lathrop’s interim city manager during his tenure as a deputy city manager.
Indemnity with no insurance
At the same time funding for Salvatore’s contract was being discussed, staff emails obtained through a public records request show the city’s Human Resources Department Risk Services Division, whose various responsibilities include reviewing all contracts with outside contractors and consultants, agreed to waive liability insurance which, according to the city’s website, is required in “all instances where vendor personnel enter City property to repair, install, service, construct and consult.”
Responding to Christy, who asked if it was OK to waive insurance requirements and accept Salvatore’s indemnification language, Nathan Birtwhistle, Stockton’s risk manager, responded in an email that “I’m fine with it considering all decisions on actions taken will remain with the (Interim City Manager). In a lose-lose situation, not doing this could be far worse than doing it.”
“We just need to be clear about the risk associated with waiver,” Christy said of possibly having to “waive the standard process/requirements” to push Colangelo’s contract through.
Salvatore’s contract also contains an indemnity clause protecting him from any liability for consequences of services he provides Stockton, holding him harmless from “any obligations, costs, claims, judgments, attorneys fees, and attachments arising from, growing out of, or in any way connected” with his city work unless a court finds him “guilty of willful misconduct.”
City officials did not respond to Stocktonia’s questions seeking clarification of the circumstances surrounding the insurance waiver. Colangelo, in his February memo, wrote: “The City’s Risk Division has reviewed the scope and terms of the agreement and supports a waiver of the City’s standard insurance requirements, as well as acceptance of Mr. Salvatore’s proposed indemnification language.”
Birtwhistle did not immediately respond to Stocktonia’s emailed questions about why moving forward without insurance and allowing indemnity was better than not moving forward, nor about what he meant by a “lose-lose situation.”
However, through Cochran’s office Birtwhistle did respond to previous questions from Stocktonia about liability insurance requirements, saying the city, along with most California government entities, uses a procedural manual produced by Alliant Insurance, one of the nation’s largest insurance brokerage firms, as guidance in determining what type of coverage should be required in consulting contracts, including general, professional and auto liability. The manual advises that only in rare circumstances can liability insurance be waived.
Salvatore’s contract with Lathrop
Salvatore started his tenure with Lathrop in January 2008 as the city’s public works director. He also held the title of deputy city manager before becoming city manager in 2012.
His salary and benefits in Lathrop totaled more than $250,000 in 2023, according to Transparent California, an online pay and pension database for all California public employees.
Salvatore’s Lathrop contract stipulates that he “remain in the exclusive employ” of the city, “and shall neither accept other employment nor become employed by any other employer except upon written approval of Employer.” However, the contract does allow “occasional” teaching, writing, speaking or consulting work to be performed during Salvatore’s “time off.”
It’s unclear whether Salvatore’s six-month consulting contract with the city of Stockton falls into the category of “occasional.”
Stockton city officials, including Colangelo, and Salvatore did not reply to requests for comment about what specific days, times, number of hours and locations Salvatore performs his consulting duties.
However, a look at Salvatore’s invoices submitted to the city provide more insight into what his services include.
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,” according to invoices obtained through a public records request.
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.”
Colangelo’s city calendar, also obtained through a public records request, shows that he either met one-on-one or attended meetings with Salvatore at least 10 times from Feb. 18 to May 5. Each meeting was scheduled for an hour or less, either in person and via Zoom, with six being described as lunch sessions at Dave Wong’s Restaurant on March Lane and two others listed as county-wide online meetings for a “League of Cities Update” for local city managers.
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. No additional reimbursement expenses were listed.
The city said Salvatore had not yet submitted an invoice for April as of Friday morning.
Lathrop city officials, including Salvatore, did not respond to questions about whether Salvatore notified the city of his long-term consulting work for Stockton, or if that work was allowed under his city manager contract with Lathrop.
Lathrop City Councilmember Minnie Diallo told Stocktonia by phone that she had no knowledge of Salvatore’s contract or work for the city of Stockton, and thus could not provide any information.
“It hasn’t come before council, so this is all new to me,” said Diallo, who asked for a copy of the contract. “I’m pretty sure this is something that should have been discussed with us.” After being sent the contract, Diallo did not immediately respond to another request for comment.
One Lathrop city councilmember, Diane Lazard, said she’d “heard something” about Salvatore’s contract with Stockton, but hadn’t had an opportunity to ask about it.
“I don’t see any reason why there should be a problem,” she said, “he can help them and that’s fine.”
Lazard said Salvatore is knowledgeable and knows what he’s doing but seemed surprised when informed of the contract terms with Stockton, saying while it “does sound a little excessive,” she’d have to obtain more information and was going to ask Salvatore about it.
“I don’t see that there’s anything wrong,” Lazard told Stocktonia, “I know (Steve) well enough to know he wouldn’t do something illegal … or something he shouldn’t be doing.”
However, Lazard added she didn’t know enough about Salvatore’s consulting contract with Stockton to determine if he was violating any of the city’s restrictions on outside work.
Mayor Paul Akinjo, Vice Mayor Jennifer Torres-O’Callaghan and Councilmember Stephen Dresser did not respond to requests for comment.
Stocktonia staff writer Aaron Leathley contributed to this report.
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