City: Human Resources director resigned because of 'changing needs'

Palo Alto City Manager James Keene said Kathryn Shen's resignation was reached by mutual decision

The recent resignation of Kathryn Shen from her position as director of the city's Human Resources Department was prompted by the department's "changing needs" and reached by a mutual decision between Shen and City Manager James Keene, according to Keene.

Shen abruptly resigned from her title as "chief people officer" last month and was quickly replaced by Rumi Portillo, who currently serves as director of Human Resources for the City of Los Gatos. The City Council approved Portillo's unanimously appointment this week. Portillo will officially start her new position on Jan. 19.

The change comes at a time when the city is wrestling with a gaping unfunded liabilities for employee pensions and health care. Palo Alto is also facing increasing challenges in recruiting workers for some of the more technical positions in the Public Works and Utilities departments.

Keene, who as city manager has the authority to fire and hire department heads, told the Weekly that Shen's departure came after a "mutual decision" about shifting priorities within the department.

"In every organization, there are points where the fit between the team and the organization's objective needs change," Keene said. "We got to a point where I thought things we'll need to do in the future were going to demand probably a little bit of a different mix of skill set and interests than Kathy has."

Keene said Shen is particularly strong on issues such as training, employee development and health and wellness. These strengths notwithstanding, Keene said the city plans to make some systemwide changes with its enterprise resource planning (ERP) software (which is used to track employee performance), an effort that requires a more technical focus, he said. Keene and Shen "mutually agreed that changing direction was good," he said.

"Kathy is a real professional and she realizes that if I want to go in a different direction, she also wants to go in a different direction," Keene added.

Shen's "release and transition agreement" notes that she "intends to resign from City employment" and that she releases the city from any and all future claims or other legal actions relating to her employment with the city.

As part of the agreement, Shen will also receive a payment of $59,607, consistent with her contract's provision that she receive severance pay equal to three months salary. Keene said such a payment is typically offered to ensure employees have "transition money" when they conclude their employment.

"We've been talking for a while about going into a new direction," Keene said. "She was out looking for what she will be doing next. She served us really well and we want to be sure she has some transition funding while we move on."

Shen was hired by Keene in 2012.

Portillo, who had also served as employment manager for the cities of San Jose and Sunnyvale, made her public debut in Palo Alto this week. Moments after the council approved her contract, she said she is excited to join Palo Alto as the new "chief people officer," as the director's position is titled.

"I know we have challenges ahead on recruitment and retention," Portillo said. "I bring 25 years of experience to help address that."

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7 people like this
Posted by Truth'r
a resident of College Terrace
on Dec 18, 2015 at 11:20 pm

Classic Orwellian circumlocution. Let's say it more simply: we want a new hatchet person to go after the deadwood, and Kathy isn't sufficiently vicious.

Like this comment
Posted by observer
a resident of Old Palo Alto
on Dec 19, 2015 at 12:07 am

[Post removed.]

13 people like this
Posted by Mary
a resident of Community Center
on Dec 19, 2015 at 1:16 pm

If everything about Shen's departure was so mutual, amicable and cheerful, why was it necessary for her to sign a contract promising not to sue the city? [Portion removed.]

Like this comment
Posted by Humble observer
a resident of another community
on Dec 19, 2015 at 2:50 pm

[Post removed.]

10 people like this
Posted by Anonymous
a resident of Another Palo Alto neighborhood
on Dec 19, 2015 at 4:15 pm

There's more going on here than the stated reasons for this departure. Just because the city wants to employ more technology is usually not a reason for the HR Director to be let go. Also, the "no-sue" provision indicates something is up behind the scenes.

7 people like this
Posted by Ned
a resident of Evergreen Park
on Dec 20, 2015 at 11:17 am

Keen hired Shen a little more than 2 years ago, and now the head of HR is hindering Keens' grand plan(s), what ever they may be? I don't buy this, it does not pass the smell test, like much of what Keen does, and this cost the city a $60k severance gift. Thanks.

7 people like this
Posted by observer
a resident of Old Palo Alto
on Dec 20, 2015 at 3:28 pm

There has also been a lot of turnover in the City Auditor's post.

Harriet Richardson –City Auditor Apr 2014 – Present
Houman Boussina –Acting City Auditor Sep 2013 –Apr 2014
James Pelletier –City Auditor Jan 2012 –Sep 2013
Michael Edmonds –Acting City Auditor Oct 2010 –Oct 2011
Lynda Flores Brouchoud –City Auditor Sep 2008 –Apr 2011

4 people like this
Posted by the_punnisher
a resident of Mountain View
on Dec 20, 2015 at 4:15 pm

the_punnisher is a registered user.

A city auditor is basically a CPA who has rules they must follow. A CPA must not and cannot bend or break those rules. The City Auditor(s) could bail out because of City malfeasance in office and they cannot or will not " work with the system ".

This creates a real problem for the HR department. To be blunt, a CPA cannot lie and the HR department usually does.

( My ex is a CPA and I have had a history of the HR people lying to me )

Like this comment
Posted by observer
a resident of Old Palo Alto
on Dec 21, 2015 at 12:26 pm

Auditors doesn't have to lie, they can just bury the information so deeply that the public won't go through all the trouble it takes to find it.
That's what the Auditor did to the last National Citizens Survey
Web Link

The actual survey results are deeply buried in tables of comparisons, tables of previous years, and more, until you give up in despair.
You can find the actual survey results showing what citizens think of Palo Alto administration if you look hard enough. Use the Table of Contents.

Like this comment
Posted by Ms. Wells
a resident of Midtown
on Dec 21, 2015 at 2:20 pm


"Palo Alto is also facing increasing challenges in recruiting workers for some of the more technical positions in the Public Works and Utilities departments."

I don't understand why the city's BMR Housing program isn't changed so it is reserved for city employees only, to aid with recruitment and retention.

4 people like this
Posted by Humble observer
a resident of another community
on Dec 28, 2015 at 12:27 pm

[Post removed.]

Sorry, but further commenting on this topic has been closed.

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