Council Initiates Removal Process Against Suspended City Manager

The City of Lodi will convene a special meeting to formally begin removing City Manager Scott Carney, escalating a six-month leadership crisis that began after Carney’s April allegations of financial misconduct within City Hall. Carney—appointed in 2024—was placed on paid administrative leave on April 9, 2025, following a meeting where he alleged misuse of public funds and improper alteration of staff reports; the mayor halted portions of the presentation over Brown Act concerns.

"This is a decision that's a heavy decision that has sent ripples through Lodi for quite a few months," Mayor Cameron Bregman said during the October 6 closed session meeting.

Investigation Yields Mixed Results

Independent reviews have delivered nuanced outcomes. An external financial audit by Lance, Soll & Lunghard LLP for FY 2023-24 reported no fraud or regulatory non-compliance. A separate internal controls review by Moss Adams flagged small-dollar compliance issues tied to CAL-Card and travel reimbursements—items like a $19 conference t-shirt, a $40 grocery charge, and minor overages between $0.08 and $18.68—most of which were repaid or documented after review. The city has reduced CAL-Card issuance and is revalidating reporting protocols on holiday cash-outs with CalPERS.

The investigation timetable expanded well beyond initial estimates, and the city’s legal costs with Meyers Nave grew to $260,000 by June 2025 as the review widened.

Lindsay’s Tenure Faces CalPERS Restrictions

Acting City Manager James Lindsay—appointed in May 2025—serves as a CalPERS retired annuitant and is limited to 960 hours per fiscal year. Reports indicate he is nearing the cap, which cannot be waived absent specific statutory exceptions, raising immediate continuity concerns for city leadership. Exceeding the cap risks significant pension consequences for the retiree and compliance exposure for the employer. Lindsay’s background includes a decade as Saratoga’s city manager and roughly 30 years in municipal service; he was hired at $140/hour to stabilize operations during the investigation period.

Search for Permanent Leadership Remains Uncertain

Lodi has not publicly finalized a timeline for a permanent city manager recruitment, even as similar regional searches (such as Stockton’s) have experienced delays and political headwinds throughout 2025. Recruitment collateral used in 2024 outlined a traditional nationwide process, which typically spans three to six months including profile development, outreach, candidate screening, interviews, and background checks. Given the current turmoil and impending holidays, a permanent appointment appears unlikely before early 2026. Recent postings for key administrative roles, including Human Resources Manager, signal an effort to stabilize operations and rebuild capacity amid turnover.

Financial Oversight and Reform Priorities

Moss Adams recommendations emphasize strengthening internal controls, enhancing purchasing and reimbursement oversight, standing up an internal audit function, and establishing a fraud hotline to foster transparent reporting and remediation. City officials also noted changes to reduce CAL-Card exposure and to clarify reporting practices consistent with CalPERS rules. Implementation will require steady leadership, clear ownership across departments, and consistent Council direction.

Recommendation	Purpose	City Action/Status
Strengthen purchasing and reimbursement controls	Reduce compliance errors, prevent misuse	CAL-Card issuance reduced; review of reimbursements reinforced
Implement internal audit function	Ongoing risk assessment and control testing	Under consideration with consultant guidance
Establish fraud hotline	Anonymous reporting to detect issues early	Identified as best practice for adoption
Clarify CalPERS reporting practices	Ensure accurate leave/compensation reporting	Holiday cash-out reporting under review

Community Impact

Leadership instability threatens continuity across core services, economic development, housing initiatives, and infrastructure planning. Business stakeholders underscore that the adoption of internal control recommendations is essential, not optional, to restore confidence and enable predictable execution of policy and capital plans. The combination of a pending removal action, an interim leader approaching legal work limits, and the uncertain timeline for a permanent hire creates operational risk that will require contingency planning by the Council and staff.

What to Watch Next

Immediate leadership continuity: If Lindsay reaches 960 hours before a replacement is designated, Council may need to appoint another interim leader, rotate department head coverage, or reduce executive hours—each with trade-offs to continuity and throughput.

Recruitment timeline: A standard national search could place finalists before Council in three to six months, but current conditions could extend that window. Early decision points include whether to engage an executive recruiter, how to structure community and staff input, and the sequencing of background and reference checks.

Control remediation: Adoption of Moss Adams recommendations and clear accountability milestones will signal momentum toward normalized operations and improved financial governance.

Methodology and Source Notes

This report synthesizes City of Lodi meeting notices and news releases, regional media coverage, third-party audits and control reviews, and CalPERS guidance on post-retirement employment. Dates, meeting notices, and quoted statements are attributed inline. External content was used to verify audit conclusions, legal caps on hours for retired annuitants, and regional timelines for executive recruitment processes.

Lodi's Leadership Crisis: City Moves to Remove Carney

Council Initiates Removal Process Against Suspended City Manager

Investigation Yields Mixed Results

Lindsay’s Tenure Faces CalPERS Restrictions

Search for Permanent Leadership Remains Uncertain

Financial Oversight and Reform Priorities

Community Impact

What to Watch Next

Methodology and Source Notes

References

Lodi's Leadership Crisis: City Moves to Remove Carney

Council Initiates Removal Process Against Suspended City Manager

Investigation Yields Mixed Results

Lindsay’s Tenure Faces CalPERS Restrictions

Search for Permanent Leadership Remains Uncertain

Financial Oversight and Reform Priorities

Community Impact

What to Watch Next

Methodology and Source Notes

References

Access Centers in Northern California