Industry city manager steps down under new council

In the weeks leading up to the City of Industry’s first election in nearly two decades, City Manager Kevin Radecki candidly expressed his fear of what would befall him if three candidates backed by former Mayor David Perez were elected: He would lose his job.

Radecki believed he would be fired for challenging the lucrative contracts that Perez and his family have with the sprawling industrial suburb in the San Gabriel Valley. The scale of the multimillion-dollar contracts was revealed by auditors commissioned by the city on Radecki’s watch.

The three Perez-backed candidates now form a majority on the five-member City Council, and on Monday, Radecki stepped down as city manager.

Following a closed session lasting more than two hours, newly hired City Atty. James Casso announced that Radecki had expressed an interest in stepping down, and the council voted 4 to 0 to accept Radecki’s resignation. He will stay on for one year as a consultant to smooth the transition.

Radecki was on vacation Monday, city officials said. Newly elected Councilman Newell Ruggles insisted the separation was an amicable one that would allow the city to move forward.

“We might be without a city manager for a day or two,” Ruggles said.

Casso, who was recently hired as city attorney and represented the city of Bell in the aftermath of its corruption scandal, said the search would begin immediately for an acting city manager until a permanent replacement is hired.

Two weeks ago, the new council led by Mayor Mark Radecki, the brother of the former city manager, fired the longtime city attorney who oversaw a lawsuit against the Perez family and its businesses. Auditors hired by the city found that the Perez family and its businesses reaped $326 million over last two decades from city contracts.

Seeking to recoup the money, Industry sued Perez, his companies and four family members in May, alleging the misappropriation of millions of dollars in public funds through false or inflated invoices and the performance of unauthorized work on city contracts, according to the complaint.

The suit echoes the auditors’ findings, which were released earlier this year and made the political landscape tumultuous in the city of 400 residents and 2,500 businesses.

According to the auditors’ findings, payments to the Perez companies averaged $16 million a year over the last two decades. The contracts included $4.9 million for lawn-mower rentals and street-cleaning fees billed at six times a competitor’s rate, auditors found.

After the lucrative contracts came to light, the Los Angeles County district attorney’s office launched a probe and the state controller began investigations into Industry’s contracts with the Perez family.

Perez, who stepped down as mayor in 2012, has also been accused by city officials of ordering hundreds of thousands of dollars in unauthorized work to be performed on city property, with the money flowing to the family’s business interests.

A Times investigation found that nearly nine years ago, Industry’s redevelopment agency paid the Perez firm $495,000 for a house and the lot it rested on, according to city records.

Long after the sale closed, however, the 1,415-square-foot abode was mysteriously back in the family’s hands — uprooted from its foundation and trucked to another property controlled by the Perezes, about two miles away.

The Perez-backed majority on the five-member council is expected to curtail the litigation, which was also discussed in closed session Monday. Casso said no decisions have been made.

The newly elected majority voted earlier this month to repeal part of a recently enacted ordinance that protected the city attorney and other city employees from losing their jobs during the 180-day period after a new council body is elected.

richard.winton@latimes.com

Twitter: @LAcrimes