Port Hueneme City Manager Retiring Under a Cloud

This is not the way Dick Velthoen wanted to go out.

After 25 years at the helm of this seaside city, Ventura County’s most-experienced and highest-paid city manager is retiring under a cloud, his image tarnished by the allegations of a colleague.

Velthoen, 62, will step down in February, leaving a legacy that includes the dramatic reconstruction of this old Navy town, but also the bitter taste of a recent lawsuit by a Latina administrator who alleges she was sexually harassed and subjected to ethnic slurs.

“All I can do is deny it,” Velthoen said in a recent interview. “[But] I’ve really been a lucky guy. I’ve been a city manager here for so long and been able to do so many neat things with so many neat people.

“So that’s the way,” he said, his voice cracking with emotion, “I wanted it to end.”

Not that Velthoen is asking anybody to feel sorry for him. That would be out of character for this former college football tight end who still rides horses and motorcycles and loves to challenge opponents to debate.

“You’re in my face,” he said recently when questioned about an issue. “I like that.”

That is the way the strapping 6-foot-2, 220-pound Velthoen has always been, say those who know him well--a straightforward, often friendly city manager who for better or worse wears his emotions on his sleeve.

He is a former jock who brought the relaxed camaraderie of the playing field to City Hall. He is a guy who is quick to react to criticism and to compliments, who is both combative and affectionate. He may sometimes seem superior and dismissive, but he can begin and end a conversation with a smile and a hug.

Mayor Toni Young has seen both sides of Velthoen, first as a critic calling for his removal, but now as a supporter who thinks he is one of the best things that ever happened to Port Hueneme.

“From 1992 to 1994 he was like, ‘Oh, God, where did we get her?’ ” said Young, the only woman on the City Council in four decades. “But as soon as I was mayor, he learned that he and I could get along real well. And we do. We’ve become good friends.”

While Velthoen’s self-confidence can rub people the wrong way, colleagues say he wears well over the long run. That is why it seemed that Velthoen--a small-boat sailor--would cruise calmly into retirement after a remarkably long run in a profession marked by rapid turnover.

More than anyone, he is credited with bringing Port Hueneme--a World War II Navy town of prostitutes and low-living--into the modern era.

Former city administrator Walter Moranda began to reshape this small city, using then-new redevelopment law to rebuild nearly from the ground up. But Velthoen took Moranda’s broad strokes and transformed Port Hueneme into the pretty little town it is today.

“I don’t think the city had a well-defined vision for itself until Dick took over,” former community development boss Tom Figg said. “He crafted a vision. Dick put the meat on the bones of redevelopment.”

Abandoned lots became city parks, modern condos sprang up along beachfront streets and a new business district developed along Channel Islands Boulevard. Trees were planted and medians landscaped. City sewer and water systems were improved. A library and community center were built.

When Proposition 13 undercut city finances and a state tax grab emptied the city general fund, a procession of city leaders praised Velthoen for finding clever ways to pay the municipal bill.

But two money-making schemes--a “view tax” on residents living near the ocean and a proposed coastal recreational vehicle park--bitterly divided city residents in the early 1990s. And Velthoen took the heat for those council policies, meant to add $400,000 to city coffers. He was “King Richard” to critics who said he led the City Council, and not the other way around.

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With the election of Young in 1992 and Jon Sharkey and Robert Turner in 1994, however, the new council killed the R.V. park and the angry debate subsided.

Velthoen rebounded with new ways for the city to make money. It now provides sewer and rubbish service to the Navy Seabee base on its western flank, it makes money on its $16-million water system and it rents out a 90-unit city-owned apartment house. All the while, Velthoen and other officials negotiated an increased share of revenue on cargo at the fast-growing Port of Hueneme.

City reserves were $2 million when Velthoen arrived; now they are $34 million.

“He got the city in good shape, and he’s leaving it in good shape,” Moranda said. “That’s his legacy.”

Worries Over Controversy

But as Velthoen finds himself near the end of his career, he is worried that his deeds may be overshadowed by the controversy accompanying a federal lawsuit by former Housing and Facilities Maintenance Director Ester Esparza.

Esparza, 54, began her career with Port Hueneme even before the city hired Velthoen away from his assistant manager’s post in Thousand Oaks in January 1975. And for 26 years, Esparza, known as Tina at City Hall, established herself as a nice, hard-working, upbeat part of the city staff, according to several current and former employees.

Then in June, she sued Velthoen and the city, alleging that the city manager repeatedly hugged and kissed her against her will beginning in 1980. She charged that Velthoen sought a “romantic, sexual relationship” with her during the 1980s. And she contended that, despite her protests, he continued to occasionally use ethnic slurs against Latinos and said that the neighboring city of Oxnard was “poorly managed because it has been primarily staffed by Hispanics.”

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According to the suit, Esparza decided to file the claim seeking $1.5 million in damages after Velthoen removed her in March as interim director of community development. She retained her post as housing director and received no cut in pay. But her attorney, Richard Weinstock, said the loss of the community development job without prior notice or discussion “was the straw that broke the camel’s back.”

Esparza declined through her attorney to discuss her case.

But Weinstock said in an interview that Esparza was not the first woman department head to complain of sexual harassment by Velthoen. A former recreation director’s complaints led to mediation in the mid-1980s, and that woman subsequently left the city, he said. He has not yet located her, he said.

“So the other female employees felt there wasn’t very much they could do,” Weinstock said. Still, he said Esparza complained to Velthoen about his conduct and to at least one former city department head. Velthoen refused to discuss Esparza or any issue related to the suit.

As the result of the Esparza claim, five workers have been questioned by lawyers in sworn depositions, with Velthoen sitting in on every one. One female employee testified that she was hugged by Velthoen, Weinstock said.

“She thought it was just his way,” the lawyer said. “But she was shocked and basically it was not something that she wanted.”

City Hall, formerly a relaxed place to work, has taken on the feel of a confused, fractured family, officials say.

“There’s a lot of fallout,” Finance Director Jim Hanks said. “There’s this feeling overall of uneasiness. Well, maybe not uneasiness, but you get a feeling of ‘Oh, God, can’t we just start over? Why is this happening now?’ ”

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Hanks said he feels bad about the situation since, like many others, he considers both Esparza and Velthoen friends. Hanks said he and Esparza were guests of Velthoen and his wife, Linda, for dinner at their Oxnard home a couple of years ago. Esparza also visited Velthoen at his home while he was recuperating from cancer three years ago, city employees said.

“I didn’t see any tension between them,” Hanks said.

In fact, Hanks said that one of the reasons he has worked for Port Hueneme for 24 years is the atmosphere created by Velthoen.

“It is a camaraderie,” he said. “And it was a place where affection wasn’t unexpected. Dick hugged men and women. But I never saw anything that was out of line.”

Nor have Mayor Young and Councilmen Sharkey, Turner and Tony Volante, they said.

If Esparza was upset, they said, they never had an inkling until she filed her complaint and asked to stay off the job on paid stress leave. She is now on unpaid leave.

“She’s a friend of mine, and it’s a sad thing,” Young said. “Things [happened] in her life. Her father died last year, and there have been a bunch of changes in personnel.”

A key change was that Greg Brown, described by officials as a well-educated planner, was promoted to head of the Community Development Department. And Esparza, who had held that position for two years, was removed.

“Tina was a very good employee,” Young said. “I just think that a lot of stress and strain have come to bear and this is what came out of it. But it will all go away soon.”

The city hopes to negotiate a settlement, officials said, because you never know what will happen if a case goes to trial.

That doesn’t mean that council members think Velthoen did anything wrong.

Volante said he believes Esparza’s lawsuit is a simple payback.

“What she’s doing now is holding the city hostage, holding the taxpayer hostage,” he said. “She was given the opportunity to step up the ladder. She was making in the $100,000 range with benefits when she left.”

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Sharkey, elected as a reform candidate five years ago, said he feels for Velthoen.

“Dick’s very upset,” Sharkey said. “It’s tough to get within a few months of retirement after dealing with [Esparza] for 20 years and now have this lawsuit facing you.”

City officials say the suit belies the loyalty Velthoen and his staff have shown each other over the years. Barry Hammitt, executive director of the union representing city workers, said Velthoen has always been fair.

“This organization has dealt with Dick off and on for 30 years,” said Hammitt, of the Service Employees International Union. “Dick has always approached things from the standpoint of trying to come up with something that would benefit the worker.”

A couple of years ago, Hammitt said, Port Hueneme had to cut its work force, and Velthoen offered a termination package that gave workers benefits beyond those in their contracts.

“It wasn’t called for, but it was the right thing to do,” Hammitt said. “So I can’t say anything bad about Dick.”

Hammitt said he has heard no complaints of harassment about Velthoen except for Esparza’s. But he said Velthoen is quite familiar in conversation.

“Dick is a person who, when he shakes your hand, he puts his hand on your shoulder,” Hammitt said. “He moves inside of other people’s space. He touches people a lot. Not in a sexual nature, but he touches people.”

A few years ago, after new sexual harassment laws were passed, Velthoen himself commented that this tendency could get him into trouble.

“He said, ‘I’ve got to watch it,’ ” said a close friend.

Well-Suited Career Choice

As Velthoen looks back on his career in Port Hueneme, he says he has few regrets.

“I’ve been able to be myself here, and I’ve been rewarded really well for it,” he said. “I would rather have stayed here than peddle my wares from city to city to be a so-called big-time city manager.”

After 25 years, he is paid, in fact, as much as some big city managers.

His base annual salary of $159,500 is by far the highest in Ventura County--exceeding those of $142,500 in Simi Valley and $140,000 in Thousand Oaks. And his total pay package of $176,000--not counting insurance benefits--is also the highest, even though Port Hueneme is just one-fifth the size of those two east county cities.

“I recognize that I am paid way too much,” Velthoen said. But in an extraordinary 10-year contract he negotiated with the council in 1989, his percentage wage increases were pegged to those of city department heads.

His replacement will probably get $110,000 a year, he said.

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Despite his recognized accomplishments and top pay, Velthoen said he doesn’t think he would become a city manager again if he were beginning his career now, instead of ending it.

“The whole environment has changed,” he said. “There are so many financial constraints on cities. And there are all these personnel issues, harassment issues.

“It’s not the same environment, it’s just not,” he said. “And it’s not my style. My style is to put issues on the table and resolve them--to walk away from disagreements with respect.”