Lancaster Rehires Past City Manager

The Lancaster City Council on Monday night rehired a former city manager--the fourth occupant of the post in three years--with extensive connections to the real estate industry that will pose potential conflict-of-interest problems for at least a year.

James C. Gilley, 42, who served as Lancaster’s top executive from July, 1981, to July, 1988, will return to that job, starting Monday, with a three-year contract, council members announced at a Monday night news conference.

To take the $120,000-a-year job, Gilley acknowledged, he will have to surrender several positions he holds, including part ownership of a politically connected Lancaster real estate office, a director’s job with a major building industry group, and his lobbyist job for a developer who wants to build the largest housing project in Lancaster history.

Gilley also said he will withdraw as a candidate for the Lancaster School District’s board of trustees in the November election.

Gilley said that as city manager he will not favor real estate interests he has been associated with. “There are a lot of things I’ve been involved in. That doesn’t necessarily mean I’m held hostage by any of those organizations,” he said.

Gilley is a one-third owner of Mid Valley Real Estate in Lancaster, a firm where Councilman William Pursley works as an agent. Pursley had to abstain from the council’s 3-0 vote to hire Gilley because it would have been a conflict of interest under state law.

Gilley said that by Monday when he takes over as city manager, he plans to surrender his ownership interest in Mid Valley, which he took up after his first stint as manager. He also said he will no longer serve as the business’s broker of record or conduct real estate transactions while serving as city manager.

Gilley also said he will give up his positions as a board member of the Antelope Valley Building Industry Assn. and chairman of the government relations committee of the Antelope Valley Board of Realtors.

He said he will quit his post as lobbyist for the Serrano Ranch project, a 4,732-unit, 1,775-acre master-planned community that would be the largest in the city’s history.

Under state conflict-of-interest laws, Gilley will not be able to deal as city manager with projects that involve Mid Valley for at least a year from the time he cuts his financial ties to the firm, or with any other matters in which he has had a financial interest for the same period of time.

“That’s probably going to be one of the more difficult parts of the job,” said Gilley, explaining that he will have to work closely with City Atty. David McEwen to avoid potential violations. “The last thing I want to do is go through that ordeal,” he said.

Pursley is under investigation by both the Los Angeles County district attorney and the state Fair Political Practices Commission for possible conflict-of-interest and other problems involving his work at Mid Valley and extensive property and investment holdings.

The council gave Gilley an immediate $20,000-a-year raise over the $100,000-a-year salary the city had been paying its former manager, Harold Schilling, who resigned July 22 after less than eight months, citing conflicts with two council members.

Schilling’s predecessor, Steve West, served from December, 1988, to September, 1990. Gilley, who preceded West as the 14-year-old city’s third manager, now also becomes the sixth.

Gilley’s first tenure of seven years ended in 1988 when he was ousted by a majority of three council members, two of whom no longer hold office. The only remaining council member who voted then to oust Gilley, George Theophanis, objected Monday to rehiring him.

Lancaster Mayor Henry Hearns said Theophanis left the closed-door council meeting before the vote, but Theophanis claimed that he had voted no.

Because of rapid turnover in city managers and top city executives, council members decided to hire Gilley without conducting the usual search for outside candidates. Pursley said the city has gotten such a bad reputation among municipal managers, it would have had trouble finding candidates.

Hearns said he approached Gilley last year when the council was searching for a manager, but Gilley declined. After Schilling said he intended to quit last month, Hearns said, he approached Gilley again.

“We’ve come to the conclusion the very best we could ever hope to get is Mr. Jim C. Gilley,” Hearns told reporters.

As an added measure of job security, the council included in Gilley’s contract at his request a provision that it will take a vote by four council members, not the former three-member majority, to fire him, and that if he is fired he will receive severance pay of six months’ salary and benefits.