City Investigation Finds Director Created Hostile Workplace, City Manager Discouraged Complaints

A city-commissioned investigation said employees in Riverside's Community and Economic Development Department (CEDD) spent years working in what investigators described as a "culture of fear" created by former director Jennifer Lilley and enabled by then-city manager Mike Futrell.

The 901-page report, completed by Nevins Professional Investigations after a 14-month investigation, concluded that Lilley created a hostile work environment and that Futrell failed to address complaints while taking actions that discouraged employees from reporting misconduct.

The investigation began Nov. 1, 2024, after the city received multiple complaints against Lilley from CEDD employees. More than 70 witnesses were interviewed before the report was completed on Dec. 20, 2025 and was submitted to the city on Jan. 20, 2026; the Gazette recently obtained a copy.

The report's findings painted a picture of a department where employees walk on eggshells.

According to the report, 71 percent of employees surveyed said they lacked psychological safety at work, 73 percent said they were uncomfortable sharing opinions and 65 percent said they did not trust department leadership.

During the period reviewed, 59 employees—about two-thirds of the department's workforce—left the organization, according to the report, which said it found no credible alternative explanation for the consistency of complaints gathered from employees over multiple years.

Complaints against Lilley

Concerns about Lilley's leadership emerged a little over a year after she joined the city in December 2022, investigators said.

An anonymous complaint first reached Futrell's office in February 2024. By August 2024, three additional anonymous complaints and two formal human resources complaints had been filed. Employees repeatedly described a workplace where staff members were afraid to speak openly, according to the report.

Investigators sustained all seven allegations against Lilley: creating a hostile work environment, retaliation, discourteous treatment of employees, poor job performance, dishonesty, insubordination and a HIPAA violation.

"Many described that she rules with fear and intimidation and with little regard for employees' emotional well-being," the report stated.

Employees told investigators that Lilley frequently gave unclear directions, then blamed staff when they sought clarification. Several witnesses described private meetings in which employees were berated behind closed doors, sometimes leaving them in tears, the report said.

An anonymous complaint sent to several council members on Aug. 28, 2024, and quoted in the report alleged that Lilley created a toxic work environment "characterized by specific behaviors including belittling staff members in front of others, getting in their faces during discussions, walking out of meetings when things don't go her way, and dismissing feedback by emphasizing her position with statements such as 'I'm the Director' and telling people to stop talking."

A separate complaint filed on Nov. 8, 2024, and quoted in the report described Lilley's management style as characterized by "intense micromanagement combined with a chronic inability to provide clear, consistent guidance," with allegations that "she deliberately avoids email communication to prevent documentation of her directives."

When employees sought clarification, they were met with "visible irritation, accusations of incompetence, or defensive remarks. This leaves staff feeling disoriented and afraid to proceed with their tasks," according to the report.

The investigation documented a pattern of retaliation against employees who filed formal HR complaints against Lilley — in at least one case, moving against an employee's job status within two days of a complaint being filed.

The report also found that employees feared participating in the investigation itself because they worried about possible retaliation. Investigators said that Lilley tracked which employees had been interviewed during the investigation and that workers "were reluctant to participate in the investigation or file formal complaints due to fear of retaliation."

"[The] culture of fear created by Lilley's retaliatory conduct inhibited the City's ability to investigate workplace concerns effectively," the report stated.

The report said HR told investigators, Lilley and her managers "have been deficient in completing on-time performance appraisals of CEDD staff over the past three years," leaving the department "ill prepared" to take disciplinary action when performance problems arose. The investigation found that CEDD had accumulated 74 late performance evaluations by July 2025—a figure that had barely moved to 59 by the time the report was finalized in December 2025, nearly three years into Lilley's tenure.

Investigators further concluded that Lilley was repeatedly dishonest during interviews conducted as part of the inquiry. The report identified 52 questions across four interview sessions that investigators said Lilley answered dishonestly, and found that materials she submitted in her defense often reinforced, rather than contradicted, witness accounts.

According to the report, Lilley denied the core allegations against her across four interview sessions, attributing employee complaints to a coordinated "mean girl club," pre-existing department dysfunction, and employees' personal issues rather than her own conduct.

When nine employees were identified as having cried because of interactions with her, Lilley denied causing any of them distress — then suggested that crying represents "energy leaving the body,” the report stated.

On the HIPAA allegation, she denied questioning an employee about protected medical information, then reversed and said that it “could have happened, probably,” according to the report. Her defense on the performance management failures was that she misunderstood the evaluation process, investigators said.

"Jennifer Lilley's documents and statements do not provide credible rebuttal to the substantial, corroborated, and objectively supported evidence of multiple serious policy violations," the investigator wrote.

The report concluded that Lilley ignored feedback from both human resources staff and an executive coach, and characterized complaints against her as a "witch hunt."

Investigation expands to include Futrell

As complaints against Lilley mounted, investigators said a second pattern emerged involving Futrell's response to those concerns.

After receiving several complaints against Lilley from February to August 2024, Futrell commissioned a survey to gauge CEDD employees' dissatisfaction. That survey found that just 30 percent of employees believed they could report wrongdoing without fear of retaliation, according to the report.

Investigators said they found evidence that Futrell and Lilley altered some of the survey results during a presentation at a department-wide meeting in November 2024.

At that meeting, Futrell addressed the complaints directly. Witnesses told investigators he described those who filed anonymous complaints as "cyber bullies sending hate mail" and said he had reviewed the allegations himself and found nothing actionable. Several employees told investigators that Futrell had previously warned staff he would fire them if anonymous complaints continued.

The report also describes a confrontation with human resources officials over proposed employee transfers. When warned that moving active complainants could be viewed as retaliation and expose the city to liability, “Futrell responded that sometimes civil litigation is worth it,” the investigation said.

Futrell was initially interviewed as a witness in September 2025, before becoming a subject of the investigation the following month.

Investigators said he sought information about witnesses, challenged the investigation process and twice canceled scheduled interviews. After formally learning he was under investigation, he contacted the city's human resources director seeking details about the allegations despite restrictions intended to preserve the integrity of the inquiry.

Three days later, the City Council served Futrell with a directive not to discuss the investigation.

Investigators sustained 10 allegations against Futrell, with one allegation not sustained — that Futrell failed to ensure the proper investigation of an initial complaint filed in August 2024 — and resolved in his favor because the report found Lilley had withheld that complaint from him. However, investigators said he later made dishonest statements about when he became aware of it.

The report found he violated California's whistleblower protection law by discouraging complaints and helping create what investigators described as a culture hostile to whistleblower activity.

In a June 19 statement, Futrell said he reviewed the report's findings for the first time after it was made public and "respectfully but strongly" disagreed with many of its assertions and conclusions. He said he had requested an opportunity to review and respond to the portions addressing him before publication and was not given one.

“My concerns include factual inaccuracies, material omissions, reliance on disputed accounts, and conclusions that, in my view, do not reflect the complete, accurate record,” he said. “The report does make much of my reliance on city staff to advise and guide me through the process, calling such reliance ‘deflection.’ This perception is incorrect.”

Futrell said that with a city of nearly 2,600 employees, he “must rely on the experts in each department to manage their slice of city operations and to advise me concerning their areas of expertise.”

“I did rely on these experts, for example, when I was informed by senior staff experts verbally and by email in 2024 and 2025 that the anonymous complaints were sent via US Mail and encrypted mail making it difficult to respond to the reporting party and which resulted in an inability to investigate,” he said. “Those communications informed my understanding at the time and reliance on staff experts was understandable and justified.”

Concerning the employee transfer referenced in the report, Futrell said he was advised at the time that the “transfer had been approved and communicated through the appropriate staff process successfully.”

“I relied on the responsible staff professionals to implement the personnel action lawfully, fairly, and appropriately, and was informed by email this process once complete had a positive outcome,” he said.

Futrell disputed the report's characterization of his conduct at the Nov. 14, 2024 departmental meeting, saying he also told employees that if they had complaints they should report them to Human Resources — a statement that he said the investigator acknowledged as true.

He said his concerns about the investigation's duration and cost were "management and fiscal-oversight questions, not interference," and that decisions about employee transfers were part of a broader effort to address budget pressures, not retaliation.

"The report treats legitimate management decisions and oversight responsibilities as evidence of misconduct," Futrell wrote. "I disagree with that characterization."

Leadership changes

Lilley's employment with the city ended March 19, 2026.

One month after the report was submitted, then-Deputy Director Miranda Evans was appointed interim leader of the department. She was named permanent director in early June.

Futrell resigned June 16, 2026, after the City Council scheduled a closed-session discussion that included possible censure. Under the terms of his separation agreement, the city placed him on paid administrative leave through July 5, 2026, and agreed to provide severance equal to nine months of salary, retirement contributions and one month of health benefits.

Futrell also said in his statement that his resignation had no relationship to the report's release, describing his departure as a voluntary, mutually agreed-upon leadership transition. He noted that the report itself states its conclusions on potential policy violations are the author's opinions and are not binding on the city.

His resignation came weeks after he announced, and then withdrew from, plans to become city manager of Pasadena.

Futrell had served as Riverside's city manager since January 2023.

City accountability and next steps

A city statement sent to the Gazette on June 23 outlined accountability and next steps for city leadership.

Mayor Patricia Lock Dawson, with the City Council’s support, on June 9 called for a third-party organization to assess the entire CEDD department — including its policies, procedures, staffing, culture, organizational structure, and management practices — and make any suggestions for change.

The city will then create an action plan that will include specific reforms, implementation timelines, and measurable performance outcomes. The city is currently finalizing a request for proposal for that independent review, according to the statement.

“These findings are deeply concerning and make clear that action is necessary,” Lock Dawson said in a June 23 statement. "That is why the City Council and I called for the independent review." She added that securing experienced interim leadership would be equally important "to guide this work, ensure immediate corrective actions are fully implemented, and lay the foundation for meaningful, long-term reform.”

The mayor said the city’s responsibility now is to “address these issues thoroughly and urgently.”

“We will follow the facts, implement meaningful reforms, and hold ourselves accountable for delivering lasting improvements,” she said. “Our employees and residents deserve a City government that operates with professionalism, integrity, and respect, and we are committed to earning and maintaining that trust.”

Corrective actions are already underway within the Code Enforcement Division following the investigation’s findings, the statement said.

Department leadership began reviewing division operations and implementing changes — including reinforcing workplace expectations, improving communication and supervision and formalizing staff training and professional development.

The city also plans to establish standardized management practices across departments, including leadership training focused on employee relations, communication, performance management and handling workplace concerns.

In addition, officials said the city will create formal protocols for informing the mayor and City Council about significant personnel matters — while maintaining legal and confidentiality requirements — to ensure elected leaders receive information on issues that could affect operations, employee wellbeing or public trust.