Placentia officials ousted City Manager Damien Arrula on Election Night following an investigation into allegations he misspent taxpayer dollars on things like car washes, lunches and installing an electric car charger in his parking spot at city hall.
[Read: Placentia City Administrator Under Investigation For Suspect Purchases]
On Tuesday night, City Attorney Christian Bettenhausen announced to the public that officials unanimously voted behind closed doors to enter a separation agreement with Arrula immediately and pay out the former city manager over $317,000 as severance.
“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.
“The agreement includes a severance payment of 12 months of base salary, which equates to $317,020 as well as a payment of health insurance contributions for up to 12 months.”
Bettenhausen’s announcement came about an hour before the first results of the November 2024 general election were reported by the OC Registrar of Voters.
Arrula did not respond to a request for comment Thursday.
Julie Suchard, a resident, spoke out against paying out Arrula hundreds of thousands of taxpayer dollars at a time when many residents are showing up to public meetings demanding officials prioritize repaving their streets.
“We’re going to pay Damien more money even though you could have let him go with cause. I have provided the cause,” she said at Tuesday’s meeting. “But you guys in your infinite wisdom have decided to pay him for a year.”
“I am really disappointed that you are paying him out for a year when there are so many other things in the city that need to be done.”
The investigation into Arrula was prompted by concerns Suchard had been regularly raising at public meetings since March about Arrula sending staff out with his personal car to a car wash who contracted with the city for free car washes, despite his $800 monthly vehicle stipend.
City Clerk Robert McKinnell read out an email from the former Community Services Director Karen Crocker at Tuesday’s meeting in defense of Arrula, calling him one of the best managers she’s worked for.
“While serving as the interim director, I saw the passion, energy and dedication of administrator Arrula had for the city of Placentia. I was extremely impressed with his leadership, forward thinking, respect and compassion he had for his employees,” McKinnell read from Crocker’s email.
Other former staff wrote to the city in defense of their old boss.
Arrula’s ousting comes weeks after public safety unions issued a vote of no confidence in the now former city administrator.
[Read: Placentia Police and Fire Unions Vote No Confidence in Embattled City Administrator]
Tom Mackenzie, the president of Placentia’s Police and Fire Management Association, said that the city officials must take tax dollars seriously.
“It is appalling that City Administrator Arrula would utilize taxpayer funds to not only pay for his personal car washes, but to send city employees to the Del Taco for lunch on numerous occasions. The amount of tax dollars that have been misappropriated by City Administrator Arrula is well over twice the threshold for a felony.”
Arrula became the top city executive in Placentia 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.
He was also one of the highest paid city managers in the county, helping lead Placentia out of the OC Fire Authority and establish 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]
Will Placentia Audit All City Credit Card Spending?
At least two elected officials are calling for a forensic audit on all city credit card spending ahead of Arrula’s dismissal.
Kevin Larson, Placentia City Treasurer, said the probe into Arrula was conducted internally and last month called for an audit into the city credit card use, reimbursements and use of city equipment by an outside specialist.
“One of the biggest risks of the city is reputational risk,” said Larson at the Oct. 15 council meeting.
“The only way to put the rumors and testimony behind us and establish trust and educate the city’s employees regarding their duty to safeguard the public treasury is to engage in the audit I just spoke of,” he said.
Larson said officials should hire an outside audit team to perform the investigation in order to avoid biased results.
“I have nothing but great admiration for the city administrator Damien Arrula,” said Larson in the council meeting. “On the other hand, I don’t work with the city administrator on a daily basis, so there is much that I don’t see or hear.”
For a forensic audit to take place, the council would have to have to approve it with a majority vote.
Larson urged the council to make this vote as soon as possible.
Mayor Jeremy Yamaguchi said at the Oct. 15 meeting that the number of residents speaking out should be enough to get the council to take action.
“There may not be anything for us to uncover, but if our city treasurer is saying that we need to look into this further, and we have members of the public asking for us to look into this further, then it behooves us to take the steps to see if there’s anything there,” he said.
Yamaguchi said in an email to Chapman Students that he has requested that staff research professional agencies to hire for an internal audit, and will vote yes when a forensic item is brought up.
“It may be a few weeks before a staff report and proposal are ready for presentation to the council, so it may be late November or early December before we officially vote on an agenda item.”
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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