LOS ANGELES — The Irvine, Calif.-based Transportation Corridor Agencies placed Chief Executive Officer Neil Peterson on leave following a dust-up involving the approval of contracts by Peterson and one of its board chairs, Lisa Bartlett.
Peterson, who was named CEO last June, was placed on leave for an undetermined length of time by the board last week, according to Lisa Telles, a spokeswoman. TCA's chief engineer, Mike Kraman, has been appointed acting CEO.
The fact that Peterson and Bartlett were approving contracts over $25,000 without going before the entire board came to light during Peterson's performance evaluation two weeks ago, said Orange County Supervisor Todd Spitzer.
The TCA staff runs two separate toll road agencies, the Foothill/Eastern Transportation Corridor Agency and the San Joaquin Hills Transportation Corridor Agency.
According to Telles, Peterson was adhering to a board policy adopted in 2008 that allowed TCA's chief executive and board chair to approve contracts over $25,000 for legislative purposes without seeking full board approval.
The exception came about because of the community backlash that resulted from plans to extend the Foothill/Eastern. The provision was inserted in 2008 to hire people without alerting the opposition to the hiring, Spitzer said.
The contract exception only applied to Foothill/Eastern, not its sister agency.
"San Joaquin doesn't have the exception, because it is built out and doesn't have a need to do secret contracts," Spitzer said. "It wasn't a system-wide exception - only Foothill-Eastern had the exception that allowed it to bury contracts in the budget."
After Spitzer criticized the policy at a public meeting, the board reversed it on Feb. 13, rescinding the ability of the chief executive and board chair to sign off on contracts above $25,000.
The TCA has two separate boards for its dual agencies. Bartlett chairs the Foothill/Eastern's. Spitzer sits on both boards.
Three contracts valued at $188,800 were approved in 2013 under the exception; the figure rises to $293,000 when counting one contract continued a document originally approved in 2012, Telles said. Those contracts were with Canyon Strategies, Richard Katz Consulting Inc., and Robert W. Naylor Advocacy.
Many government entities allow the chief executive or city manager to approve contracts under $25,000, Telles said. What was unique was TCA's decision to allow contract approval above that amount on contracts related to legislative strategy or that supported legislative efforts, Telles said. The contracts involved lobbying and public relations - all items Telles said fits the definition in the policy.
Spitzer does not agree. He said the CEO and board chair weren't even adhering to the stipulation that the exception only applied to contracts involving legislative matters.
He points to a $27,000 contract with Loeb & Loeb, the law firm former governor Gray Davis works for.
"The actual description of the contract said it was for regulatory and legal support, but the board was told he was hired for legislative support," Spitzer said. "In my opinion, the chair of the board did not have the legal authority to sign the Davis contract. It was outside the scope of what the chair can approve."
The full boards met jointly for the action that resulted in Peterson being placed on leave, Spitzer said. According to Peterson's contract, he can be terminated immediately for cause, or with 90 days' notice without cause.
"We are in the middle of discussions," Spitzer said. "I can't comment further on personnel issues, but we are going to abide by his contract provisions."
Foothill/Eastern restructured its debt in December with a $2.3 billion refunding. The deal pushed final payoff of Foothill/Eastern out 13 years to 2053.