Amid a titillating scandal, Arroyo Grande gets a new mayor

This town southeast of Pismo Beach has long been known for its wine-tasting rooms and quaint downtown. Being riven by political scandal is something new.

In last month’s election, a little known write-in candidate unseated Arroyo Grande’s longtime mayor amid a titillating scandal that pitted the city manager against an angry police union. In a short but powerful crusade, Jim Hill, a nuclear power plant engineer who campaigned just one day a week, defeated Mayor Tony Ferrara, who had held the seat since 2002.

Allegations of inappropriate trysts, cover-ups and favoritism at City Hall turned neighbor against neighbor, ushering in a new mayor whose first order of business will be helping the community of 17,000 heal.

“This is like a mini-Civil War, with brother fighting against brother,” said real estate broker Mike Byrd, a Hill campaign leader. “I have friends who are not speaking to me.”

Hill, 62, moved to Arroyo Grande from Oceano only three years ago and entered the race for mayor just six weeks before the Nov. 4 election. In a final ballot count completed Nov. 17, he won by 95 votes and is set to be sworn in Monday.

Discontented Arroyo Grande residents approached Hill, who had been elected twice to the Oceano Community Services District board, about challenging Ferrara after the local police union’s vote of no-confidence in the mayor and after City Council meetings became so contentious that law enforcement officers had to stand guard.

Political tensions here had been brewing over the usual small-town gripes: accusations of preferential business treatment and squabbles involving police contract negotiations. It all came to a head July 3.

City Manager Steve Adams and Community Development Director Teresa McClish had drinks together at a restaurant across the street from City Hall. They went to another restaurant and had more wine, Adams said later. McClish’s husband called the police when she didn’t arrive home by 11 p.m. and asked them to check for her car at City Hall.

At City Hall, officers found Adams, his hair disheveled and his shirt partly untucked. In their reports, the police said that he seemed angry when they asked about McClish. But when officers went into Adams’ office, they found McClish, partly dressed, “holding some sort of clothing to her chest,” according to a police report.

Mayor Ferrara, who defended Adams, later said the encounter was innocent and that the two had returned to City Hall to drink tea and sober up.

Adams and McClish did not return phone calls from The Times, but the city manager said in a statement published in a local newspaper that “nobody was at any time unclothed or partially unclothed.”

The city attorney’s office investigated the incident — city policy prohibits romantic relationships between supervisors and their subordinates — and Ferrara and the City Council reprimanded Adams for his “inappropriate” behavior. They warned Adams that he would be fired if he did it again. No action was taken against McClish.

The scandal played out as Arroyo Grande’s police union negotiated a new contract. Officers and some residents complained that Ferrara and the council had not taken stronger action against Adams. In September, the Arroyo Grande Police Officers Assn. took a vote of no-confidence against the mayor and city manager.

The union, which represents the department’s 28 officers, also questioned the objectivity of the city attorney’s investigation.

At one point, the City Council meetings became so contentious — with some calling for Adams to resign or be fired and others voicing their support for the council — deputies from the San Luis Obispo County Sheriff’s Department were called in to keep order.

Eventually, the council agreed to hire an outside firm to investigate.

That’s when Hill, an engineer at the Diablo Canyon nuclear power plant, entered the fray.

Hill said he decided to run because the officers were so incensed, they had put their livelihoods on the line.

“If the city employees were brave enough to risk their jobs by speaking out, then I could at least try to see if I could get elected,” said Hill, 62, who is married with three grown children.

But the campaign coincided with a major event at Diablo Canyon that required Hill to work 12-hour days six days a week, allowing him just one day each week to campaign.

Ferrara, 69, said the July 3 incident was “blown way out of proportion” and that he and Adams were casualties of divisive labor negotiations.

“My best assessment is this was a very well-orchestrated attack campaign and came from several sources with a mix of agendas,” said Ferrara, who served on the City Council for four years before becoming mayor. “Labor issues were alive and well here.”

In the end, an independent investigation conducted by Ventura-based Sintra Group could not find “substantive evidence” of a romantic relationship between Adams and McClish.

“However, their actions in going to City Hall later in the evening hours after consuming alcohol exhibited poor judgment,” the report stated.

On Nov. 19, the council accepted Adams’ resignation. A councilman also revealed that Adams had been reprimanded before the July 3 incident for a previous encounter with McClish.

Ferrara resigned last week, saying he didn’t want to be part of Hill’s swearing-in ceremony.

Hill, who won with 3,090 votes to Ferrara’s 2,995, said he knows his first task will be to reunify the town: “A number of people voted in good faith for the incumbent and others were deeply dissatisfied with several things. My job will be to bring everybody back together and move forward.”

amanda.covarrubias@latimes.com

Twitter: @amcovarrubias