City Council does not take action on City Manager Tommy Gonzalez; investigation continues

City Manager Tommy Gonzalez will not be on administrative leave while an independent investigator reviews the aborted search for a new financial adviser.

The El Paso City Council did not take action on Gonzalez after discussing “personnel matters” regarding the City Manager for more than six hours.

Both Mayor Oscar Leeser and Gonzalez announced they had a “healthy discussion” during executive session. Gonzalez said he and the city need to work on stronger safeguards and more clear processes when dealing with requests for proposals. He said he is going to work on a game plan for 30 days and bring it to the city council.

“We’re committed to putting in stronger safeguards. I will tell you that the existing policies were followed. I’m going to go back and look at the RFQ and RFP process and make sure we bring to council ahead of time instead of in the back end like the existing policy speaks to,” Gonzalez said in a brief interview after the meeting.

City Attorney Sylvia Firth will also prepare a summary of the powers of the city manager and present it to council.

The City Council last week voted to hire an independent investigator to review the search for a new financial adviser, a controversy that has encompassed city hall. The investigator, Ross Fischer, is an Austin lawyer who focuses on political law, professional ethics and public integrity. He was the Chairman for the Texas Ethics Commission from December 2008 to December 2009.

Fisher briefed the council for hours in executive session and afterward said it would probably take him about a month to finish his investigation. Lesser said he wanted Fisher’s report no later than end of January.

Gonzalez has defended his decision to authorize the financial adviser search, saying he followed proper protocol and believed he was operating under the direction of the entire city council. Though last week he also said he should have double checked with all of the city representatives to ensure it was their wish to search for a new company.

Leeser on Monday said he still had major concerns the City deviated from the standard practice of individual scoring only for this search. “That’s why I want to know why we changed some policies. That’s why it’s really important that mr Fischer gets in here and looks at why we changed policies and procedures. Whether it’s legal or not – that’s not the discussion but why we changed what we’ve always done.”

Emails show Gonzalez green-lighted the search after a July 22, 2014 public meeting in which City Rep. Larry Romero said “in his personal opinion” the City should look for a new financial advisor in the “next couple of months.” Because none of the other city representatives objected to Romero’s suggestion, Gonzalez said he took that as a directive from the entire council.

Romero has also been under the microscope for recommending financial advising firm Estrada Hinojosa to former City Manager Joyce Wilson soon after being elected in the summer of 2013 but not disclosing he used to work with the company’s owner, Noe Hinojosa. Wilson did not act on Romero’s suggestion. Though Romero has said he mostly only asked Wilson about the process to look for a new adviser and didn’t “push for” Estrada Hinojosa aside from touting their work.

Romero has said he didn’t think it relevant to disclose to Wilson he used to work with Hinojosa “12 or 15 years ago.”

Gonzalez has said Romero’s suggestion was not the only factor that led him to authorize the search for a new financial adviser. He said all city representatives expressed concern “with the financial advising” when he was first hired in 2014.

Last week, several city representatives grilled Gonzalez saying it was clear Council had not given him authority to search for a new financial adviser. “We can go back and forth on whether there was official council action but there just wasn’t,” City Rep. Cortney Niland told Gonzalez. Other representatives expressed concern they had not heard about the aborted search until about a year after the process began.

According to city emails obtained by ABC-7, Gonzalez authorized the search for a new financial adviser even after the City’s Chief Financial Officer, Dr. Mark Sutter asked him in September 2014 if it was an order from the entire council and not just one city representative.

City Rep. Claudia Ordaz said she had a conversation with Gonzalez just two weeks after that, in October 2014 about the City’s financial adviser and Gonzalez failed to notify her the city was in the middle of a search for a new company.

On ABC 7 Xtra Sunday night, City Rep. Michiel Noe said it’s unclear if Gonzalez was acting nefariously or if he simply exercised bad judgement because he was new on the job and trying to prove he could get things done without undue bureaucracy.

Emails demonstrate the search came to an abrupt end in October when Firth learned about it and showed Gonzalez an email from Former City Manager Joyce Wilson and a report from the City’s bond counsel, Norton Rose Fulbright detailing what led to a delay in the issuance of ballpark bonds in the Summer of 2013.

According to the Fulbright report, Wilson purposely delayed the issuance of the bonds until after the May 2013 mayoral election between ballpark supporter and former City Rep. Steve Ortega and then political newcomer Oscar Leeser.

An examination of the timeline demonstrates Wilson’s decision ultimately cost the City $22 million because the market crashed soon after the city tried to sell the bonds after the delay. Wilson has tried to say “several factors” led to the delay but the report shows the City would have had plenty of leeway to deal with concerns over costs from the ballpark contractor had it authorized the bond resolution on April 30th rather than May 28th. The report states Wilson deleted the item from the April 30th meeting agenda because of the ongoing controversy over the ballpark so close to the May 11th election.

The report also states First Southwest warned the City’s then CFO that the delay was too risky. Despite knowing of those warnings, Wilson chose to delay for the election believing there would be no harm if the city halted the process for “no more than 30 days.”

Gonzalez has said he would not have authorized the search had he known the information in the Fulbright report because it proved First Southwest had not given the city bad advice, as was initially alleged by city representatives.

Noe said he and other council members believed First Southwest was at fault for the botched ballpark financial deal until ABC-7 requested the Fulbright report and the council discussed it. “We were all under the impression it was the advice from First Southwest. There were rumors Wilson had delayed for the election but we didn’t know for sure,” Noe said Sunday night.