EL PASO, Texas (KFOX14) — The City of El Paso could owe city manager Tommy Gonzalez hundreds of thousands of dollars if he resigns with adequate notice, according to the city manager’s employment agreement with the city.
KFOX14 Investigates looked into the city manager’s initial and current agreement with the city, as well as any amendments executed in between, to find out when that clause was added since it does not appear in his first contract.
Gonzalez was first hired in 2014 at a salary of $238,959.82.
His initial contract included a severance payment of one year’s worth of salary and benefits if he was let go without cause.
Documents obtained through the Freedom of Information Act showed that five months into his initial contract, Gonzalez’s agreement with the City of El Paso was amended to include an automatic renewal once his contract terminated, unless city council gave him 60 days notice of non-renewal.
That first amendment, dated October 14, 2014, said if Gonzalez’s contract was not renewed, the City of El Paso would have to pay him a full payment equal to one year of his current base salary and benefits.
The amendment also made Gonzalez eligible for a raise based off a bi-annual market -based review the city would have to conduct on city managers in eight specific cities.
The cities include:
Ten months after the first amendment was executed, Gonzalez’s contract was amended a second time.
The second amendment gave Gonzalez a 25% raise.
His salary increased from $238,959.82 to $300,000.00.
The document states the reason for the raise was in lieu of a 5% raise Gonzalez is eligible for every year, if he passes his annual evaluation with a rating that exceeds expectations.
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Gonzalez’s initial contract, which had a termination date of June 22, 2019, was renewed for a term of five years beginning June 23, 2019.
This contract, which is Gonzalez’s current agreement with the City of El Paso, ends on June 22, 2024.
However, according to the agreement, Gonzalez’s term automatically renews for terms of two years, unless council notifies him no less than 120 days prior that it does not intend to renew the agreement.
Gonzalez’s contract was renewed at a salary of $330,750.00 and included the following paragraph:
If the Manager resigns his employment with not less than 120 days written notice, the city shall pay the Manager: Severance Payment. A Severance Payment consisting of 12 months of Manager’s then current base salary and benefits. The Severance Payment shall be paid in one lump sum. Accrued Obligations. In addition to the Severance Payment, the city shall pay the Manager the Accrued Obligations consisting of a) his base salary to the date of termination of the Agreement, b) all granted and/or accrued but unused vacation and sick leave, and c) his automobile allowance to the date of termination of the Agreement.
As per the agreement, Gonzalez gets a bi-weekly car allowance of $230.77.
Gonzalez’s contract makes him eligible for 160 hours of vacation and 80 hours of sick leave.
Gonzalez is able to accrue up to the hourly equivalent of six months of vacation at any time during the term of his agreement with the city, according to the agreement.
The contract states, in the event of the termination of this Agreement, the city is obligated under a provision in Paragraph VI to make a lump sum payment for the Manager’s vacation and sick leave, the maximum amount of such payment shall not exceed the hourly equivalent of six months of vacation and six months of sick leave.
Gonzalez’s current contract continues to make him eligible for that 5% raise every year, based on his evaluation, as well as the ability to cash in on any pay increases given to city employees across the board.
Another clause in Gonzalez’s contract says he is “able to serve as a consultant and/or undertake speaking engagements, writing, teaching, or other professional duties and obligations for other than the city and be paid for such activities, provided these consulting services do not conflict or interfere with the manager’s professional responsibilities."
The agreement says this is dependent upon written notice to the mayor and city council.
Much like in the first amendment, the current contract continues to make Gonzalez eligible for a raise based upon market-based reviews of city managers in eight of the before-mentioned cities.
The difference is that the amendment required those reviews to be conducted bi-annually by the city, and now it is only required once a year.
KFOX14 Investigates reached out to the City of El Paso to ask how much it costs the city to conduct these market-based reviews of city managers.
A spokesperson with the city said it costs approximately $430.00.
Per the contract, the city also agreed to pay for Gonzalez’s travel expenses when he gets an annual health exam at Cooper Clinic for Preventative Medicine in Dallas, TX.
KFOX14 Investigates asked Dee Margo, who was the mayor at the time of the renewal, about those stipulations.
Leeser hired Tommy, our city manager, Tommy Gonzalez in 2014, Leeser gave him his first raise before I become mayor,” said Margo. “So when [Gonzalez’s] contract was up, which was initially five years, it was in 2019, what we did is we had set up a committee, I don't know if it’s still there from a governance standpoint, called the Financial Oversight and Audit Committee. It was comprised of four council members,” said Margo.
Margo added that the contract was discussed in closed session and voted on, “it was negotiated originally under Leeser and all we did was build upon what he had negotiated. So that's probably a question I would ask of Leeser. All we did was continue to build upon that. Tweak it accordingly with the percentage increases and that was about it,” said Margo.
According to Margo, the same contract template used during Oscar Leeser’s term was used to draft Gonzalez’s current agreement with the city.
I didn't vote on the contract. I didn't need to. Council overwhelmingly passed and it had been discussed and vetted in council and in close session so it seemed to me that it was meeting everyone's expectations and I remind people if you take the entire--there's almost 5,000 employees for the city and the total budget for the enterprise and operating budget for the city is about a billion dollars so he functions in the role that amounts to a chief operating officer," Margo said.
KFOX14 Investigates reached out to Mayor Oscar Leeser for comment but was told he was unavailable.
Margo believes Gonzalez’s severance payment is comparable to other severance packages.
"If you look at the severance package for Juan Cabrera at EPISD very similar It's pretty much standard language in employment contracts by attorneys on both sides of the discussion so really it wasn't out of the ordinary to have those termination clauses in there and again council approved it."
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KFOX14 Investigates then reviewed the contract alongside John Wenke, an employment attorney with more than 25 years of experience in El Paso.
"I think that is a little bit unusual when compared with contracts with school superintendents and other public entities,” Wenke said.
Wenke explained that while some parts of the contract are typical, the severance payment in Gonzalez’s contract, which has the City of El Paso agreeing to pay Gonzalez a year of salary and benefits if he resigns, is not.
City managers in Texas are very highly compensated and that is reflected here. [Gonzalez] received and continues to receive good pay, good benefits, probably what stands out a little bit is that the city agreed to pay him a one-year severance if he resigns on his own accord and is not pushed out," said Wenke
According to the agreement Gonzalez has with the city, the same severance payment applies if the city does not renew his contract or if the city manager is fired without cause.
"It's not clear why the city would want to obligate itself to a one-year period. The problem with that is that if you have a new city council, a new mayor and you have some dissatisfaction with the city manager, you are on the hook for a significant amount of money,” Wenke said.
The City of El Paso does not have term limits for city managers, or a cap on compensation, so the city council can continue renewing Gonzalez’s contract.
Wenke added, "it could be a lengthy contract that the city has painted itself into a box that at some point they are going to have to pay him a half a million-dollar severance unless he's terminated for cause which is probably unlikely.”
For reference, take a look at the City of San Antonio.
In 2018, San Antonio voters approved term limits for city managers, limiting their term to no more than eight years.
The measure also limits how much a city manager can make, which currently means the city manager in San Antonio is limited to ten times the annual salary of the lowest-paid full-time city employee.
Wenke also reviewed the contract for the city manager in San Antonio.
the one big difference between what I saw in San Antonio is that if the city manager chooses to leave on his own accord because he wants to relocate or because it’s a better paying job, the city is not obligated to pay him a severance. If he is being forced out or you know, some actions taken by city council that indicates dissatisfaction, and then he resigns then they do have to pay him a severance. It's a higher severance though, it's 18 months," said Wenke.
KFOX14 Investigates asked all eight of El Paso’s city council members for their thoughts on the San Antonio measure.
El Paso City Rep. for District 2, Alexsandra Annello, voted against the renewal of Gonzalez’s contract in 2019.
“I am not comfortable discussing that at this time. As you know, the San Antonio measure was a citizen-driven petition and we are having a charter change election November 2022," said Annello.
No other city council members replied to our request for an interview.
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