Scott Ball / Rivard Report
When Erik Walsh takes over as San Antonio’s city manager on March 1, he will inherit a very different city than the one Sheryl Sculley took over 13 years ago. In those days, the City of San Antonio had a reputation for corruption, problems keeping its books, and was recovering from the arrests of two City Council members.
“This place was so different when I got here,” said Sculley, who plans to write a book about her experiences. “I mean, it was a mess.”
Many leaders credit Sculley with professionalizing the city’s government while bolstering economic and infrastructure development. Her results-driven leadership style is one Walsh said he plans on continuing – but they differ, he says, in “approachability.”
The Rivard Report sat down with Sculley, who has more than 30 years in executive management experience, to talk about her time overseeing the City’s $2.8 billion budget and more than 12,000 municipal employees. This interview has been edited for length and clarity.
Rivard Report: What are the top five achievements you would highlight from your career in San Antonio?
Sheryl Sculley: (1) Talent development: I’m very proud of the fact that all six of the deputies and assistants applied for city manager and were interviewed by the Council. They are all outstanding, and it’s an excellent team. We talked at the beginning, and everyone agreed that regardless of who was selected they’d be supportive. So that speaks well of the team. When I was recruited here, the council did not consider any internal candidates, so I knew coming in that my job was to also develop successor leadership, and I am very proud that we’ve been able to do that. Some of them are internal to the organization and some external, but I’ve promoted all of them at least once or twice since I’ve been here.
[I also] replaced all the department heads, hired [San Antonio Police Chief William] McManus and [San Antonio Fire Chief] Charles Hood. So we’ve built a really outstanding team, and I think people have been trained really well.
(2) Financial management: I was here for at least nine months before I could get a financial statement. At the time [the City] was a $2 billion [municipal] corporation. I nearly quit over that. … I had already presented my first budget, [and] I didn’t even have an audited financial report. It was a mess.
They had tried unsuccessfully to implement a SAP financial [software] system. There was a lawsuit over that with the [firm that was implementing it]. … Coincidentally, I had worked with our CFO in Phoenix [where she served as assistant city manager for 16 years] on the implementation of a SAP system there. … Our team was able to implement it seamlessly.
Here [in San Antonio], it was a mess. People were keeping a second set of books – some by hand – so it was not a good situation.
Hurricane Katrina hit the week after I was appointed city manager. I volunteered to come in. I wasn’t on the job officially yet, but … I met Mayor Hardberger to visit all the shelters and help with the recovery. Because of the hurricane, we were getting some of the conventions that were supposed to be in the Superdome in New Orleans. SAP’s international convention was supposed to be in New Orleans, and they moved it to San Antonio. So I met with the CEO and I said, “I know this isn’t your responsibility, we bought your software, we hired someone else to implement it, but your initials are on this so we need your help, please.”
I asked him for a team to come in and assess the situation … because we couldn’t even figure out where the City was in the implementation [process]. They came in and gave us 140 recommendations, which we, within a year, had fully implemented … but it took a huge effort to do that and [SAP] did that at [its] expense.
When I did finally get the external audit … there were 15 pages with dozens of criticisms, material weaknesses of the City. So I hired an auditor from that audit firm to work solely on getting those corrected over time. … We have our comments down to almost nothing.
We set a goal in 2007 to become one of the best financially managed cities in the country, and in 2008 [Standard & Poor’s] upgraded us to AAA for [general obligation] bond rating. And then in 2010 both Fitch and Moody’s also upgraded us.
[After] all the refinancing we’ve done during my tenure, we’ve saved the city over $100 million in interest.
(3) Infrastructure improvements: $350 million [in bond programs] before I was hired and since then $2 billion – and we’re still playing catch-up – most of that devoted to streets, sidewalks, and drainage, parks, fire stations, senior centers, a couple of museums, [too].
(4) Haven for Hope: I was in the very first meeting when Mayor Hardberger appointed [NuStar Energy Board Chairman William] Greehey and [Inner City Development co-founder] Patti Radle to co-chair that first committee, and we visited other homeless campuses elsewhere in the country. Bill Greehey led that effort and raised a lot of money – and gave a lot of his own personal money.
(5) Pre-K 4 SA: I’m very proud of that program, for certain.
I don’t think that [Deputy City Manager] Peter Zanoni has received enough credit for the work he did. Mayor Julián Castro asked us to put together … a business plan, and Peter and I worked closely together, but he and [Education Coordinator] Rebecca Flores and a team of – gosh, about 18 people – worked on that.
Voters approved Pre-K 4 SA in November 2012, and we had to build and open the first two schools in August 2013 – in less than 12 months. And we did. And we hired all the teachers. We didn’t hire our first CEO until July of 2013.
[The most credit should go to] Elaine Mendoza. … She has chaired the board since inception. She also served on the Brainpower Task Force that Mayor Castro put together.
It’s been a unique and outstanding partnership and working relationship with the board. Nothing controversial. The way it’s set up is by State law – council doesn’t approve everything. They approve the budget, and then the board does any other decision making over the course of a year.
… Education is tantamount to success economically for San Antonio. Education leads to workforce development, whether you’re going to college for a two- or four-year degree or a training program.
RR: How do you think the City and residents have taken to the new “equity lens” when it comes to resource distribution?
SS: There wasn’t an [infrastructure management program] … on the maintenance side of the budget. That was something new we put in place after I was here, in part because I heard from the community as I went out and about and met with as many people as I could reach in that first year – literally had 700 meetings – I would hear things like, “We’ve been waiting 50 years for a sidewalk.” I mean, seriously?
It was some of the historic discrimination [against] certain areas of the community … [and] the bond programs they had [before] were very small and they would over-promise and under-deliver.
… Overall it’s the right thing to do for the community because we are about equity and prosperity opportunity. So this is about, “Does everyone have a chance to be better?” San Antonio can’t be better unless everyone has access to that opportunity.
We’ve had some criticism for approaching our budget through an equity lens – not everyone supports it. I think the Council direction was the right direction, and I certainly believe in it and support it.
RR: Is there anything throughout your career that you would handle differently if you had to do it again today?
SS: I told my staff [the police and firefighters union negotiations] would probably be the most difficult thing we [had to] take on during my tenure.
[Police and fire unions] have been able to control their contracts for 25 years, and it’s a business model that is not sustainable. I am grateful and respect the work that public safety personnel conduct for the residents of this community. It’s tough work, and they need to be compensated.
I wish there could have been more consistency. We wouldn’t be in the same situation we’re in today if we had the same Council we had when we started. I’m not saying they were better [Council members], but there was so much turnover [of elected officials]. … Every time Council members were changed, we’d have to start over.
… Rightfully so, they’d ask a lot of questions.
I couldn’t have changed that, but I also didn’t anticipate that we’d still be at it five years after [the City attempted to negotiate with the fire union]. And because unions have tried to intimidate elected officials for so many years, it made it a … very difficult climate.
[We needed to] stay true to what we were trying to accomplish, which was fair and equitable benefits that are affordable to the public. As we started – and I presented the business case to Mayor Castro at the time – we worked very hard on that presentation to say: This, [if] left unattended, will bankrupt the City. … Most people said, “Don’t take this on.”
[Public safety contract] expenses, on average, for the past 10 years have increased by 6 percent. Our revenues have increased by 4 percent. You can see where this is going. It is not sustainable, in large part but not only driven by health care [costs]. We can change the business model without taking away health care benefits. We’ve done that successfully with our civilian employees.
That’s not to criticize the administration. Mayor [Ron] Nirenberg has been one of our strongest supporters.
RR: Do you think that your tenure and your experience allowed you to take that tougher stance on bringing down those costs?
SS: I explained that to the mayor and Council at the time. I was at a point in my career where it made sense. I was choosing to stay, and I felt that would be my financial legacy to the city. To not address it, in my estimation, would have been irresponsible.
I began my career in Michigan, I saw what happened directly to the City of Detroit. I saw what happened to General Motors. I’m a student of cities, and I saw what was happening on the West Coast: California cities where legacy costs, pension, and health care were out of control, and cities were going bankrupt.
[San Antonio was not] in a crisis situation. We could address it before it became a crisis. And of course, the unions didn’t want change. The fire union still doesn’t want change.
… I did not think we’d still be unsettled after five years. When I said I had been thinking about retirement for a couple years, that is absolutely true. I did not think it would take this long.
RR: Do you think negotiations will be stalled until 2024, when the evergreen clause (which keeps the terms of the contract that expired in 2014 in place for 10 years) expires?
SS: Evergreen is an option. I’m optimistic that the fire union will come to the table and negotiate something that is reasonable for the taxpayers. The mayor and Council have many priorities that they want to fund. They want to continue large street budgets, they want to dedicate significant amounts of money to affordable housing, we’re talking about a ConnectSA [multimodal comprehensive transportation] plan that will need not only capital dollars but operating dollars … in addition to public safety.
So we need to get those [public safety] expenses within reasonable boundaries.
RR: What are your thoughts on the new rules that cap the salary and tenure for the next city manager now that the City has a qualified applicant?
SS: It would be very difficult for someone to move their family across the country for a job that has a term limit and a salary cap. … That cap is the same amount I was offered in 2005 to come to San Antonio when they were trying to recruit me as city manager.
… It’ll be difficult to attract someone from elsewhere. I believe in developing local talent and promoting from within. Half of the people I’ve hired as department heads are from here. I also believe in mixing it up to get fresh ideas, people with experience in other cities. It brings new, creative thought to the management process.
RR: Do you think being a woman has impacted the perception of City management here?
SS: Clearly both unions have targeted me as a female. … The police union’s chief negotiator wrote a book that, in one of its chapters, describes picking someone out to put that person in the crosshairs … and to just keep that person on the firing line, and they did that to me.
I think they thought that it was easier to pick on a woman and someone who wasn’t from here. … For 25 years they had their way and I was trying to change that business model. They didn’t like that.
RR: Do you think San Antonians are now more open to leadership from people who are not originally from San Antonio?
SS: Absolutely. To be inclusive means welcoming everyone and not being parochial. We want to educate, train, promote, recruit the very best talent from San Antonio – grow our own. I think I’ve proven that over the past 13 years by developing outstanding staff – most of whom are from here. But the reality is, back in 2005, there were no internal candidates.
I did not apply for this job. I was recruited here.
Being a woman and not from here has definitely been an obstacle. However, since I announced my retirement, I can’t go anywhere without people thanking me for the work, the improvement in the community.
RR: Do you plan on staying in San Antonio? Have you received offers?
SS: I’ve made San Antonio my home. I’m part of the community. … I don’t have plans to leave at this point, so we’re staying here for now. I’ve been contacted about opportunities … but I’m not making any quick decisions on what to do next.
RR: What will you miss most about this position?
SS: I’ll miss the staff, the collaboration, the goals we set, and what we accomplished. I will definitely miss that.
RR: What do your last couple months working for the City look like?
SS: We’ve accumulated a long policy list as to City Council projects and programs that are high profile and the [executive leadership team] member in charge of [each] and progress dates and deadlines for completion of those.
We started doing that right after the first of the year to get ready for this transition. Of course, back then we didn’t know who it was going to be.
I have a long list of boards that I serve on by position [CPS Energy and SAWS, for example] and then other [City-related boards] that I serve on because they specifically asked for me. … I’ll be introducing Erik, taking him to those meetings, and doing a handoff with those boards and committees.
[We’ll also be] reviewing many of the standing meetings that we have with staff on particular projects. For example, I meet with [Chief Financial Officer Ben Gorzell] on a monthly basis to review the City’s financials, I meet with TCI city engineers and staff, and budget and finance director to review the bond projects.
Basically helping Erik and the team transition over this month and a little bit next month to the extent they need my help. And then I will fade away … from City Hall.