Oceanside’s city treasurer behaved poorly on several occasions, violated numerous city policies, and was dishonest about his use of library computers, according to a report released Thursday.
However, there is no evidence that City Treasurer Victor Roy harassed an employee, failed to perform any of his duties or that he made risky investments that cost the city money, the report states. As an elected official, Roy oversees city treasury matters and policies but does not handle investments in the city’s $450 million portfolio, a job delegated to the city’s full-time treasury manager.
“This situation involves escalating workplace disputes between city treasury manager Steve Hodges and elected treasurer Victor Roy,” states the investigative report prepared for the city by The Zappia Law Firm of Huntington Beach.
The difficulties could change the way the city handles its investment portfolio. Hodges has agreed to vacate the office Nov. 1, and the city has advertised for bids from an outside financial services firm to do the job.
“By nearly all accounts, the issues between Hodges and Roy arose or escalated in great part when treasury employee Becky Salvatierra passed away on or about Dec. 11, 2021, and Hodges was then required to perform her duties in addition to his own,” the report states. “This admittedly caused Hodges great stress at work and even prevented him from taking leave time off work to be with his new baby.”
At the same time, Roy sought to become more involved in the day-to-day treasury operations and Hodges had less time to work with him. Hodges also said that Roy was “unqualified” to help, which compounded the stress of the job, the report states.
Issues escalated at a May 24, 2022, Citizen Investment Oversight Committee meeting chaired by Roy, where the two openly criticized each other in public.
The meeting was followed less than two weeks later by an email exchange in which first Roy directed Hodges to reinstate a broker previously used to handle the city investments.
Hodges responded with a email accusing Roy of making or overseeing risky investments, making “derogatory comments” about Salvatierra’s death, improperly soliciting campaign contributions, viewing inappropriate material on a computer at the city library, failing to perform his duties, and habitually coming in after hours to use city property for his personal use.
Only two of the allegations — the derogatory comments and the viewing of inappropriate material at the library — were sustained by the independent law firm’s report.
Some of Roy’s comments about Salvatierra’s death are redacted from the report, but it says he engaged in “conduct unbecoming” by repeating the comments.
Roy told investigators “he merely initiated internal discussions about potential causes of her death to determine if COVID-related safety measures should be taken,” the report states, but, “this should have been reported to qualified personnel to investigate and address, not the elected treasurer.”
The allegation that Roy viewed inappropriate material, described elsewhere as nude images, on a library computer also was confirmed. A separate report on that incident was filed by a city senior librarian.
As for the library incident, Roy told investigators he was investigating a citizen complaint that inappropriate material could be accessed and viewed at the public library computers. The investigators found his claim lacked credibility and, if true, should have been reported to appropriate city personnel to take action.
Investigators found no evidence that Roy had harassed or retaliated against Hodges, or that Roy had used city offices after hours for personal use.
“The two (men) clearly became engaged in petty workplace disputes over duties and responsibilities,” the report states. “As the elected treasurer, Roy is provided access to a city office. There is no evidence or accounting of how much time Roy spends there conducting work vs. personal business, if any.”
Any evaluation of the city’s investments is beyond the scope of the investigation, the report states, but it appears any loses were the result of market conditions, and similar results affected other agencies at the time, not just Oceanside.
Roy, contacted by telephone Thursday morning, said he had not seen the report, and that he would have to go to City Hall to obtain a copy before commenting on it. Hodges said he’d just received the report, but had not read it in detail.
Hodges has agreed to “vacate his position in November 2022 pursuant to the terms of a separation agreement approved by city management and Mr. Hodges,” assistant City Manager Michael Gossman said in an email Thursday.
“The agreement provides time for the city to conduct a recruitment for a new treasury manager and … to provide any necessary training,” Gossman said.
The city issued a request for proposals Sept. 8 with a Sept. 30 deadline for bids from investment management services.
“We are taking a different approach (than in the past) to this function for the city,” Gossman said. “There are a lot of firms both locally and statewide that provide these types of services, and it is very common for cities to use such a firm for this type of work.”
Hodges said Thursday the city offered him the settlement in June in exchange for his resignation, and after careful consideration he accepted in July.
His last day in office is Nov. 1, 2022, but his resignation is not effective until November 2023 under the agreement, he said in an email. He will continue to collect his salary during that time. He earned a total of $149,646.14 including benefits and pension payments in 2021, according to the Transparent California website.
“My focus over the next year will be my family and my health,” Hodges said. “I currently have two young daughters, the youngest of which I feel I have missed much of her young life, as I was not able to take time off sufficiently to fully experience her birth. I am extremely grateful to now have the opportunity to watch her develop and grow, and be with her on a daily basis.”
He agreed to stay on until November because nobody else could perform the department’s essential functions, he said.
“I am extremely proud of my contributions to the city,” Hodges said. “I truly love my job and the city of Oceanside and appreciate all the opportunities it has provided me.”
Roy was first elected to a partial two-year term as city treasurer in 2018. He was elected to a four-year term in 2020. The job is considered part time and has an annual salary of $26,581, according to the city website.
He obtained a geology degree from UCLA in 1970 and retired in 2004 from the airline industry, in which he worked on ground crews. He has had training relative to his treasurer position since he was elected, according to the investigation report.
