McCarty acknowledged an awkward moment with Chan, before voting not to extend his contract. The final council vote was 6-3 against the extension.
Councilmember Lisa Kaplan, who supported Chan's extension, says she was surprised by the mayor's change from his campaign pledge.
McCarty declined an interview request and released a statement.
John Vignocchi is a Sacramento developer and contributed to McCarty's mayoral campaign. He says McCarty's statement satisfies him.
Chan drew increasing public scrutiny for his $400,000 salary.
"A new day in Sacramento, a new era for all of us," McCarty said.
Chan's contract officially ends Dec. 31. That agreement does give him the option to stay on as an assistant manager if he chooses to.
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