After close to one year as Sunnyvale's interim city manager, Amy Chan has accepted the job of managing Santa Clara County's second largest city on a permanent basis. After giving Chan an outstanding review of her work, the city council officially voted to make her the permanent city manager at its Nov. 9 meeting.

Ten years ago, Chan turned down even the possibility of the job. Tom Lewcock, then the city's manager, asked her to apply for his position because he was leaving. But Chan, who was assistant city manager, liked working in the background. "I don't like the limelight," she said in a recent interview. Chan and her husband were also thinking ahead to retirement and travel.

So back then, she said no.

But things are different now. With the city going through a financial crisis because of the economic downturn, and with the recent loss in upper management personnel, the city needed someone to take the helm. Chan stepped up.

"When the top person leaves, there is a reaction," Chan said.

"I'm homegrown here," she said. "It's like when a family member is having trouble: you stay and help out." she said.

Chan began her work with the city as accounting officer in 1980. She then served as the city's finance director from 1983 to 1994. As director, she became active on a national level in the Government Finance Officer's Association and even wrote articles about Sunnyvale's system of government for the organization's journal. In 1994, she became the assistant city manager.

Chan and her husband lived in Sunnyvale for 15 years before moving to Palo Alto in 1989. She moved back again for two years when her current Palo Alto home was under construction. Her residency outside of the city has some questioning her appointment because the city charter requires that the city manager live in Sunnyvale. To remedy this, Chan, who owns property in Sunnyvale, has established a part-time residency in town. Meanwhile, the city council has lawyers reviewing a decision by the state court that declared a resident requirement for city employees unconstitutional.

"Amy's been with the city [staff] almost 25 years," said Mayor John Howe. "She's helped put many systems into place that have turned the city into a world-class place." He said the council members looked at her work for a performance appraisal on Oct. 21, and they concluded that it was outstanding. "She has the strong support of the seven council members," Howe said. "It's the council's job to create policy and the manager's job to make it happen, and she's doing it."

Howe said that over the last year, Chan has helped the council go through difficult times. "We've had many all-day budget sessions in which Amy helped educate the public and the new council members," he said.

Sunnyvale hasn't had to bear the brunt of cuts that other cities have, and Howe said much of the credit goes to Chan. Instead of cutting vital services, they've cut back on such things as the number of times the city trims trees or sweeps the streets, suggestions he credits to Chan. "You'd be surprised at how much that saves," Howe said.

However, some in the community question why the council did not do a national search to fill the position.

County Assessor Larry Stone, who served on Sunnyvale's city council for 16 years, said a city of this size should have done a national search for the job. "Then if Amy was the best, she would have prevailed," Stone said. But he said Chan is competent. "She's a good soldier and will stay the course."

"Why spend the money during these tight budget times when you know you will come to the same conclusion?" Howe said. "Amy is a strong leader and she gives guidance. She's good for the city, good for the staff and good for the council. She's strong and independent."

But some council watchers are concerned that Chan will allow the council to micromanage the staff.

"The greatest thing about Sunnyvale is the strict line between the council's job as a policy setter and the staff's job of carrying out the policy," said Stone, who is concerned that this council oversteps the line. Stone recalls several times when Lewcock--who was city manager when Stone was mayor--called him for crossing that line.

"I respected that," Stone said. He said most elected people are not particularly good managers, and they don't have the experience or knowledge that the hired staff members have. "The council needs to set the vision and then get out of the way of the staff's implementation."

Former Councilwoman Pat Vorreiter thinks Chan can help keep that line clear. Chan was assistant city manager when Vorreiter was on the council for eight years. "I found Amy very approachable," said Vorreiter. "She has the capacity to listen attentively and then make the hard decisions. She doesn't make decisions just to appease people. Amy will be able to move the city ahead."

Chan agrees that the council needs someone who can keep watch over the line between council's vision and staff's implementation, but she also said when council members are new, they are learning. Sometimes as newcomers they don't really understand the difference between policymaking and implementation. "I give them the benefit of the doubt," she said. "It's a learning process."

What will help is Chan's passion for Sunnyvale, which runs deep.

She believes in Sunnyvale's system of government. In her time on the staff, the city built a reputation as one of the best-run cities in the nation. President Bill Clinton and Vice President Al Gore came to Sunnyvale in 1993 to find out what was working here. Clinton even mentioned Sunnyvale when he signed the Government and Performance and Results Act of 1993, requiring government agencies to design measurable goals.

Chan said the system that makes Sunnyvale unique evolved over many years, beginning with a couple of city managers who were passionate about accountability.

With Lewcock--who was city manager for some 20 years--and others, Chan helped formalize a system of setting and measuring long-term goals: The city calls it the Planning and Management System--PAMS.

The idea, Chan says, is to set your vision, goals and objectives, and then figure out the services needed to achieve them. The city implements the services and then measures the results. Then, at the end of the fiscal year, the city manager reports what was successful, what wasn't and the cost to the city.

"Finally, the city communicates to the public what we did well and what we didn't do well and a plan for improvement," Chan said. "If the public entrusts us with public funds, it's incumbent on us to tell how we used it."

Accountability can be intimidating, she said. But she believes that accountability and openness is critical to the well-being of the city.

In hiring the new senior staff, Chan said she wants leaders who think about the community first, not just "what about my department." With the budget crisis, she said, there will be more painful cuts in the future, and the department heads need to see the bigger picture.

Chan is currently setting up a system of panels that include staff, council and members of the community at large to help her find the city's new director of public safety. "I will take panel recommendations, but I will make the final decision," she said. "Even with a lot of input, you never know how a person works out until they are actually on the job."