Ousted Milpitas city manager files claim against city

Former Milpitas City Manager Steve McHarris is leveling sweeping accusations of incompetence, unethical behavior and intimidation by members of the city council, including the mayor, vice mayor, city attorney and the former mayor.

McHarris filed a claim against the city for damages on May 1, just months after a split council voted not to renew McHarris’ contract in February, effectively firing him, further adding to the chaos plaguing the top levels of government in Milpitas. McHarris was in his second stint with the city, and had been in the city manager role since May 2020, after serving as interim city manager. His contract with the city officially ended on June 3.

In the claim, McHarris said Mayor Carmen Montano, Vice Mayor Evelyn Chua and City Attorney Michael Mutalipassi “inflicted severe emotional distress” on him, and created a hostile work environment for him and other staff. McHarris is the third permanent city manager to be let go since 2017, and said his effective firing violated his contract because the council cannot terminate him within six months of an election.

“I have never seen anything like this, this kind of work environment, this kind of morale internally in the city,” Councilmember Anthony Phan told San José Spotlight.

He said the way McHarris has been treated by city officials, after initially being highly praised for his experience and demeanor with colleagues, is disheartening.

“I can’t imagine why any fully qualified, competent prospective city manager would want to come to Milpitas. I would not blame them if they didn’t want to apply here,” Phan said.

Concerns around how the claim was handled internally were raised by Phan and Councilmember Hon Lien, who said information about the situation was withheld by Mutalipassi.

In the 29-page claim, McHarris alleges Montano and Chua “maliciously and falsely accused” him in August 2022 of conspiring with the city clerk in handling public records requests that would harm them politically. In response, he said they worked with Mutalipassi to cut McHarris out of all public records requests going forward.

Montano also “consistently blamed” McHarris and city staff for missing or mis-scheduling meetings due to her inability to use Microsoft Outlook, the claim said, affecting staff morale.

She also often misunderstood and questioned staff work “due to her lack of preparation and comprehension,” the claim said, making it harder for staff to serve her, “even in the most basic of issues facing the city.”

McHarris claims that Montano and former Mayor Rich Tran, when he was still on the council, pressured McHarris to fire an employee without credible reasoning. When McHarris resisted, he felt their attitudes and behavior toward him shifted harshly. Montano also tried to pressure McHarris to hire a friend of hers to a city position.

Chua did not respond to requests for comment. Montano did not return calls seeking comment. In a brief text message, she denied the allegations.

“His claims against the city are false and we look forward to defending ourselves in court,” Montano told San José Spotlight.

Tran as puppet master 

The claim also portrays Tran, the former mayor, as a puppet master of sorts, alleging he made a deal with Montano and Councilmember Garry Barbadillo during their 2022 campaigns to force McHarris out of his job in 2023.

“Mayor Tran offered his active campaign endorsement, which included his active social media platforms, and walking city precincts door-to-door in exchange for a successful candidate’s firm commitment to remove the city manager as their first order of business,” the claim said.

Tran said he denies all the allegations in the claim.

When Tran first came into office, he got involved in a dispute with former City Manager Tom Williams, who had accused Tran of age discrimination before he was nearly fired by the council for misusing his city credit card.

“This is like deja vu,” Tran told San José Spotlight. “We’ll just go to arbitration and we’ll be found innocent again.”

McHarris, who previously served as a city planning director in Milpitas, left the city in 2015 claiming that Williams created an environment of fear. Tran praised McHarris’ return to the city as a deputy city manager in 2018.

Barbadillo declined to comment, and deferred to the city attorney, Mutalipassi.

Mutalipassi said he can’t comment on ongoing claims against the city, but noted this claim is being addressed according to city processes.

Conflict of interest 

At a council meeting on June 20, Phan said he felt the three people named in the claim—Montano, Chua and Multalipassi—should recuse themselves from any discussion regarding the allegations. Councilmember Lien agreed.

Lien asked to schedule a closed session meeting after the city council’s recess in July to discuss the claim, but she was voted down by Barbadillo, Chua and Montano.

“At this time, there is no conflict, there is no claim against any particular individual, a claim has been submitted as to the city,” Mutalipassi said.

Lien told San José Spotlight the council has received no guidance on the claim, nor have they been asked for their input on how to handle it. She hopes the city will wrap it up soon.

“In any kind of claim, the longer you drag on, the more it costs for both sides,” Lien said.

In a closed session meeting on June 6, after two days without a top administrator, the council appointed Ashwini Kantak, assistant city manager, as acting city manager. Two weeks later on June 20, the council appointed Planning Director Ned Thomas as acting city manager in closed session.

Contact Joseph Geha at [email protected] or @josephgeha16 on Twitter.