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Placentia City Treasurer Kevin Larson and former Mayor Craig Green say former City Administrator Damien Arrula’s credit card spending was within city policies amidst recent allegations that he misspent money.
“He didn’t improperly spend a damn dime,” Green said in a phone interview last week. “I said yes to all of that [spending]. That was a non issue as far as that was concerned.”
“He was the best thing that happened to this city in a long time,” he continued. “I’m no longer on council, but I believe they’ll rue the day they let Damien go out the door.”
Larson – who also publicly rescinded his audit request at a council meeting last week – said everything checks out to him after seeing records showing Green approved the spending.
“There was nothing being swept under the rug,” Larson said. “There was disclosure, I’m convinced that I saw some things that lead me to believe Damien was very open about what was going on, there was conversation with him and council and staff.”
It all comes more than two weeks after city council members unanimously voted for a separation agreement behind closed doors on Election Day and paid out over $317,000 as severance plus a year of health insurance.
While city officials completed an investigation into Arrula’s credit card spending after allegations of impropriety, it was not released publicly.
[Read: Placentia City Administrator Under Investigation For Suspect Purchases]
The investigation into Arrula was prompted by repeated concerns from resident Julie Suchard since March about Arrula city credit card spending and the city installing an electric car charger in his parking spot at city hall.
She also has raised concerns about Arrula sending staff out with his personal car to a car wash who contracted with the city for car washes, despite his $800 monthly vehicle stipend and high salary.
“It just felt like every time he turned around, he had nickel and dimed the city for more and more stuff. It annoyed me,” she said in a phone interview last week.
Suchard – an accountant who has filed several public records requests about spending – questions why the city would spend time and money on an investigation which they have yet to release to the public if Arrula’s spending was approved.
“Why did they spend all the money and do months of an investigation If the City Council approved all this stuff ?” she said.
Suchard also said the separation agreement – which she got through a public records request – bans both the city and Arrula from making disparaging remarks about each other and believes that’s why Larson backtracked his call for an audit.
She said the city should still move forward with an outside forensic audit.
But Larson, who’s elected by the voters and doesn’t serve under the city council or city manager, publicly defended Arrula at the Nov. 19 city council meeting, canceling his calls for an audit and saying he’d reviewed records showing Arrula’s spending may have been approved.
“I have questions about whether or not the use of the credit card was appropriate or not, it looks like there was possibly oversight,” Larson said.
The council’s discussion on Arrula took place out of the public eye, but City Attorney Christian Bettenhausen reported to the public it was a unanimous decision to sign the separation agreement.
“During the closed session, the city council took action to approve a separation agreement and release of claims with the city administrator,” Bettenhausen said at the Nov. 5 meeting.
Voice of OC has filed a public records request to the city for the investigation’s finding as well as Arrula’s separation agreement and other documents.
Arrula became the top city executive in Placentia in 2016 after the city’s former financial services manager was charged and later convicted for embezzling over $5 million from the city and sentenced to over 20 years in prison.
In an email Wednesday for the first time addressing the issue, Arrula said he wishes city officials and staff continued success and that he was the target of false accusations.
“It is not uncommon for a public servant executive to be the target of false accusations and innuendo in the tussle of a political environment,” he wrote in the email.
Arrula, who helped spearhead efforts among 13 North Orange County cities to build homeless shelters and address the unsheltered crisis, said he’s rigidly followed ethical guidelines.
“While that is personally frustrating, I appreciate that the facts have come to light that completely vindicate me and affirm my adherence to the high ethical standards demanded of my position as a public servant.”
Some of the former city administrator’s colleagues are coming out in his defense by emailing the council or speaking out in recent public meetings – like Green, former Community Services Director Karen Crocker, former City Finance Director Jessica Brown and retired OC Fire Authority division chief Scott Brown.
In an email she sent to city officials and later the Voice of OC, Jessica Brown said Arrula rolled out a host of safeguards to protect city finances.
“He introduced several financial policies designed to prevent fraud and ensure accuracy in reporting processes. These internal controls were a model for other cities,” she wrote.
Brown said he also boosted financial transparency.
“One of his most notable initiatives was the establishment of a publicly accessible electronic warrant register, which allowed the community to view each transaction with complete transparency, setting a new standard for transparency in the City,” she said.
A City Manager & A Public Safety Union
Calls questioning Arrula’s conduct also were sparking as he was negotiating with the city’s Police and Fire Management Association, who issued a vote of no confidence in the now former administrator last month.
[Read: Placentia Police and Fire Unions Vote No Confidence in Embattled City Administrator]
That vote came after the two sides deadlocked on their union negotiations in April, according to city records.
Tom McKenzie, the union’s president, did not respond to requests for comment from Voice of OC on Wednesday.
Arrula has long been at odds with the city’s public safety unions after he helped lead the charge out of the OC Fire Authority and established an independent fire department, saving the city millions of dollars.
[Read: Placentia First OC City to Leave Fire Authority and Form its Own Fire Department]
In an email he sent to city officials and later the Voice of OC, Scott Brown – who helped advise the city when the fire department was launched – credited Arrula’s efforts to establish an independent fire department.
“An effort such as this is no easy endeavor – Mr. Arrula took the bold steps to ensure a wide array of subject matter experts, which included Fire Chiefs from Orange County, Riverside County and Los Angeles County who were involved in all phases of the pre-development of the new department,” he wrote.
City leaders have also claimed their model helped cut down on response times in the city, but it led to some tension with the countywide fire union, according to Green.
According to a fire department report, the average fire and medical response times dropped by 30-40% from 2019 to 2021.
“The Jimmy Hoffa school of doing business is alive and doing well with this union,” Green said, referencing the countywide firefighters union, not the city’s own union. “They were nasty.”
Chris Hamm, president of the OC Professional Firefighters Association Local 3631, did not respond to Green’s comments in a statement to Voice of OC, but said OCFA was a better future for the city.
“Cutting emergency services, staffing engines below the national staffing standards, and removing access to our world-class specialized services isn’t what’s best for Placentia,” Hamm said. “This isn’t saving money; it’s putting lives at risk, both residents and firefighters.”
Suchard said she started looking into Arrula’s spending after she became concerned about the impact the switch away from the county fire authority that he spearheaded would have on emergency services and found out Arrula was the highest paid city manager in OC.
She also said she looked into the spending after tips from city employees, former city employees and members of the local chamber of commerce.
Suchard said she has been persistent about raising her concerns because she cares about the community and that she hasn’t been working with the public safety unions.
“Sometimes, when you care about something, your interests align with other people. But it doesn’t mean that that’s the reason why you’re doing it,” she said. “I care about my community. I care about my city.”
Green said the city’s departure from OCFA left Arrula on the union’s bad side.
“(Arrula) got things done, he kept getting things done,” Green said. “Did he piss off the unions? Yeah, cause he didn’t kowtow.”
Noah Biesiada is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at nbiesiada@voiceofoc.org or on Twitter @NBiesiada.
Hosam Elattar is a Voice of OC reporter and corps member with Report for America, a GroundTruth initiative. Contact him at helattar@voiceofoc.org or on Twitter @ElattarHosam.
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