By Mike Dunbar and Gene Lieb
The Westside Express
LOS BANOS – One of the most controversial, tumultuous and costly eras in the history of Los Banos came to an end early Saturday evening when city manager Josh Pinheiro resigned.
During Pinheiro’s tenure, the city has seen the loss of roughly half its staff, a vote of “no-confidence” by the city’s five largest employee groups, a civil grand jury rebuke and the recall of two city councilmembers.
“I’m grinning so wide my face might split,” said one former city employee.
“This makes me so happy,” said one city staffer.
Word of Pinheiro’s decision filtered out of city hall late Friday afternoon after he told several employees that he “was through” with his job.
But the city is not quite through with Pinheiro. Under the terms of a contract negotiated with the previous council, the city must pay Pinheiro a full year’s salary – or roughly $217,000.
“You have the previous council who approved that contract,” said councilwoman Deborah Lewis, the only councilmember who voted against it in 2023. “They bear that responsibility.”
But Los Banos will bear the cost.
“We have to follow the conditions created by the last council,” said new Mayor Mike Amabile on Saturday evening. “And that was a one-year payout.”
This is the second time that Pinheiro and the city have parted ways and the second time Pinheiro has collected a significant sum.
Despite having no experience working for any public agency and very little experience as a manager, Pinheiro was originally hired as city manager in October 2021. His tenure lasted only eight months after issues arose between Pinheiro and other employees. In June 2022, the council — Mayor Tom Faria, Refugio Llamas and Lewis — voted 3-2 to dismiss Pinheiro.
That ended Pinheiro’s first chapter with the city. The second began four months later when an attorney representing Pinheiro sent a letter insisting he had been unfairly fired and demanding a payment.
A few weeks later, in November 2022, two of Pinheiro’s most ardent supporters – Paul Llanez and Doug Begonia Jr. – were elected to the council, joining Brett Jones and Ken Lambert. The four of them voted to rehire Pinheiro in January 2023. Only Lewis voted against the rehiring.
Two months later, the same 4-1 majority voted to give Pinheiro $1.8 million. The city’s employment liability insurer refused to honor the payment and outside legal counsel recommended against it, so the council voted to pay Pinheiro from the pockets of city taxpayers.
Two months later, on a 3-1 vote (with Lewis voting no), the council gave Pinheiro a new contract that required a 5-0 vote to fire him – a level of job security afforded no other city manager in California.
Those provisions appeared to backfire as the public became more aware of them and other emerging issues.
Under Pinheiro’s leadership, many large spending decisions were crammed into the council’s consent agenda — meaning they could be approved with no public discussion. The city’s budget was prepared and passed with virtually no public input and was kept largely secret until passage.
Councilmember Lewis was the only voice of dissent and the only councilmember insisting that many important spending issues be discussed in public.
In October 2023, the city’s five employee groups issued a letter of “no-confidence” in Pinheiro’s leadership. Meanwhile, five department heads who worked directly with Pinheiro – the finance director, fire chief, police chief, public works director and, eventually, another finance director – quit the city. More than half of the employees who worked for the city when Pinheiro first started as city manager had quit or retired by September 2024.
In June, the Merced County Civil Grand Jury rebuked the city for its handling – under Pinheiro’s supervision – of federal American Rescue Plan Act grants awarded to small businesses.
In May and June, voters signaled their unhappiness by signing petitions to put councilmembers Begonia and Jones on the ballot despite the fact that each had two years remaining in their terms. That meant the entire city council was on the November ballot – a referendum on Pinheiro’s leadership.
Pinheiro’s most ardent council supporters — Llanez, Jones and Begonia — all were resoundingly beaten.
At this week’s Jan. 8 meeting, the city’s three councilmembers conducted a one-hour closed-door session to discuss Pinheiro’s performance. Then on the evening of Jan. 11, just 72 hours later, the city released the announcement that Pinheiro had resigned “effectively immediately.”
The announcement said, “The city thanks Mr. Pinheiro for his dedicated service and progress to the City and the citizens of Los Banos.”
Amabile said he knows not everyone is happy that Pinheiro will get a payout. But it is a condition of his contract.
Like Amabile, Lewis is hoping to turn the page. “We have an opportunity to go in a different direction,” she said.
But before that takes place, she wants the city to conduct a complete audit and financial review.
“I want to know, financially, where we stand. That’s just based on all the money we’ve spent over the past three years,” said Lewis. “I feel like we haven’t had a good explanation of the budget and its operation. So yes, I think it’s important to look at our finances and see exactly where we stand.”
At its Jan. 15 meeting, Amabile expects the city to appoint an acting city manager before searching for a more permanent replacement.
