After a lengthy hearing which ended shortly after midnight last Thursday, the city’s Ethics Review Commission dismissed a complaint against former Interim City Manager Jesús Garza.
A motion aimed at dismissing the complaint failed, as did a motion to move forward to a final hearing. As a result, the complaint was dismissed. Adam Materne, the commission’s secretary, conducted the hearing. Chair William Ross Pumfrey recused himself. Materne said he believed they had enough information to proceed but could not get the six votes necessary to move to a final hearing. Likewise, the motion to find there was no violation failed to garner six votes.
The complaint, filed by Brian Molloy, chief of investigations at the Office of the City Auditor, alleged that Garza violated city regulations when he hired Laura Huffman and Joe Canales to perform high level duties within city management. The two were hired through subcontracts with PFM Advisors , the advisors hired by the city to help with financial issues. The complaint alleged that Garza violated the part of the city code that deal with ethics and financial disclosures, because he did not get City Council permission to hire the two former city employees.
Garza, who served as city manager from 1994 to 2002, became interim city manager after City Manager Spencer Cronk was fired. Garza was hired to serve on an interim basis from February 2023 until May 2024, when Council hired T.C. Broadnax.
Garza and his attorney, Mike Shaunessy, told the commission that Council was very anxious to deal with problems caused by Winter Storm Mara. The Council was upset that in 2023 they were facing he same problems they had two years earlier after Winter Storm Uri.
As the Monitor reported last November, “Huffman received payments of nearly $286,000 from the city as a subcontractor … for work during the February 2023 to February 2024 time period. Canales’ hourly rates were based on the anticipated annual salary for the deputy city manager position, totaling $325,000. Canales, who had retired from the city, was not eligible to be hired as a full-time employee because of his previous retirement.” City regulations limited the manager’s authority to approve contracts exceeding $76,000. However, the audit report noted that Garza consulted with the city’s Chief Financial Officer and treasurer about the subcontracts.
When the complaint was filed, Garza told the Austin Monitor, that the city faced an emergency in early 2023, “with multiple unprecedented crises and challenges highlighted in 2021 and 2022 City Auditor reports, including the aftermath of recent winter storms, issues with our 911 call center and the need to restore public confidence in city departments.”
Garza told commissioners, “Joe and Laura did a great job.” He explained how Huffman, in particular, solved problems at the 911 call center that had needed to attract more employees for some time. He added, “virtually all the matters that come to the city manager’s office are financial. When you have a subcontract, the Council doesn’t approve the subcontractors.”
Malloy told the Monitor that his office was disappointed that there was no final hearing on the case.
The June 25 agenda shows the commission was scheduled to hold a hearing on a complaint against Council Member Natasha Harper-Madison but it was postponed due to time constraints.
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