It will cost El Paso taxpayers almost one million dollars to rid themselves of Tommy Gonzalez according to Gonzalez’ recent contract with the City.

It is hard to estimate the exact amount because of the opaqueness of Gonzalez’ contract. However, an El Paso Politics analysis of the contract suggests that the city’s taxpayers are on the hook for almost one million dollars when Tommy Gonzalez leaves the city, even if he voluntarily departs to work for another city.

Tommy Gonzalez was appointed the city manager in June 2014. To understand his current contract, El Paso Politics worked with El Paso attorney Brian Kennedy, who agreed to go on the record to help us better understand the legal nuances of the contract by providing us his legal opinion about them.

Kennedy wrote that Gonzalez’ contract includes “a severance payment of approximately a million dollars if the city does not renew” his employment contract. [6] In other words, if the voters decide to do away with the city manager form of government or if city council decides not to renew the contract in 2024, the taxpayers will have to pay “approximately a million dollars” to Gonzalez. To better understand why, El Paso Politics analyzed the details of contract with the help of Brian Kennedy.

The Contract

The latest employment contract between Tommy Gonzalez is dated December 11, 2018. [4] It went into effect in June 2019. [3] It is set to end on June 22, 2024, but “will automatically renew for terms of two years” unless city council tells Tommy Gonzalez it does not intend to renew the contact 120 days before it renews. [4]

Because of this, Tommy Gonzalez’ current city contract does not expire unless city council cancels it. However, if council elects to not renew the contract, the City will have to pay him almost one million dollars, if not more. Here is how we arrived at that number.

By The Numbers

Under the current contract, Tommy Gonzalez was paid $330,750 as his salary in 2019. [4] In July, Gonzalez and city attorney Karla Nieman both received favorable review evaluations by city council. As a result, under their contracts, both qualified for raises – two percent for Nieman and five percent for Gonzalez. The contract states that if Gonzalez’ evaluations “exceeds standards,” he is eligible for a 5% salary increase each year. [4] This raised Gonzalez’ salary to $398,401 annually. [1]

This is our starting point.

Under his contract, Tommy Gonzalez can accrue sick leave benefits and is allowed 160 hours of vacation each year. [4] Gonzalez can use his sick leave as personal time if he chooses to. This is important to note in our calculations because vacation time is capped at six months under the contract. But under the contract Gonzalez can use sick leave instead of vacation time. [4]

The contract spells out that the City is obligated to pay Tommy Gonzalez six months of accrued vacation and sick leave. Thus, if the city were not to renew the contract, the City would owe Tommy Gonzalez almost $200,000 in accrued sick and vacation time. Here is why.

Under privacy laws it is difficult for us to ascertain how much vacation time Gonzalez has accrued over time. But because Gonzalez has been working for about seven years, he has likely accrued six months of vacation. Because he can take sick leave for personal time, it is reasonable to assume that Gonzalez has banked six months’ worth of vacation time. Thus, his annual salary divided by six months gives us almost $200,000.

In addition to the vacation and sick leave payments, the City is also paying Gonzalez an annual 401a Deferred Compensation Plan contribution “in the amount allowable by law.” The 401a is like the 401k readers may be familiar with. However, the 401a is paid for by the employer, in this case by the City, instead of by employee paycheck deductions and employer matches. In Gonzalez’ contract the City was obligated to pay him $20,000 in 2019 and an annual “lump sum contribution from the City in the maximum amount allowable by law” by January 10 of each year, thereafter. [4]

Thus in 2019, Gonzalez received $20,000. The maximum allowable contributions for 2020 was $57,000 and $58,000 for this year. Assuming that Gonzalez was paid “the maximum amount” for each year, his accrued balance would be about $135,000. This is an addition to his base salary. It is unknown if Gonzalez has any accrued deferred compensation prior to this contract, so for the purposes of our analysis we will exclude them, but we are likely on the low end.

About One Million Dollars

Should the city council choose not to renew Gonzalez’ contract or if the voters vote to do away with the city manager’s office, or, and most important of all, if Tommy Gonzalez decides to quit his job for another, the city’s taxpayers must pay him at least $732,601.50 in one lump sum. In January Gonzalez will receive another deferred compensation payment that would bring his severance package closer to one million dollars.

Readers should note that we have made conservative best guesses as to how much Gonzalez has accrued in deferred compensation and thus our amount may be lower than the actual amount due him under the contract.

What is most important to note is that Gonzalez can resign and be paid over $700,000 by the City under his contract. More important is that the City cannot choose to end the city manager form of government without paying Gonzalez at least $700,000.

Brian Kennedy told us that he “cannot remember working on a contract that binds an employer to extending the contract or face a million-dollar payment.” [6] Kennedy added that “there could be concern about the legality of binding a future council to award a contract, a question that is better asked of the Attorney General of Texas.” [6]

What is worse, according to Kennedy, is that the contract’s severance package allows Gonzalez “to accept a new job, resign and get an approximate million-dollar payment from the City of El Paso as he heads to his new job.” [6]

How Can Gonzalez Be Terminated?

Tommy Gonzalez’ contract allows for both the City and Gonzalez to mutually terminate the agreement. Like most employment contracts, Gonzalez can be terminated for “just cause.” For example, negligence and illegal conduct. The City can also choose not to renew the contract or Tommy Gonzalez can resign. [4]

Should Gonzalez be fired for “just cause” the city must pay him about $400,000 plus any salary and benefits he has earned at the time of his termination. We arrived at the $400,000 figure from his deferred compensation package and what we believe his accrued vacation and sick leave are.

Each Year It Gets More Expensive For El Paso Taxpayers

In addition to the compensation, we outlined above, every time the city manager budgets across the board pay increases for city employees, his own salary increases by the same amount approved by city council. [4] For example, if non-uniform employees are given a 1% pay increase, Gonzalez’ own salary is also increased by the 1%, in addition to his own 5% contract increase. In the 2019-2020 budget, city employees were given a 1% merit pay increase, thus Gonzalez’ salary increased by one percent as well.

The current budget does not have an employee salary increase, but the budget being reviewed by city council currently contemplates giving city employees a 1.5% pay increase. Gonzalez would also get the pay increase should city council approve the budget as submitted.

In other words, the longer Tommy Gonzalez stays employed at the city, the higher the cost for the taxpayers it becomes for him to leave the city.

Is He Guaranteed 5% Increase Each Year?

How likely is Tommy Gonzalez to continue to receive the 5% pay increase each year by city council? In August 2020, at the height of the Covid-19 pandemic, Gonzalez received a salary increase, although the City had furloughed over 100 city employees because of the pandemic. The resulting public outcry over Gonzalez’ raise at the time when city employees were home without paychecks, Gonzalez, through then-mayor Dee Margo said that he would donate his raise to “local charities”. When the El Paso Times asked Gonzalez recently to which non-profits he had donated his salary increase to in 2020, Gonzalez “did not name a specific organization.” [1]

Readers should also note that in 2015, after his first year as city manager, city council gave Gonzalez a 25% raise, raising his salary from $238,959 to $300.000.” [2] In 2018, Gonzalez’ salary was $330,750 annually according to the El Paso Times. Because of his 2018 performance evaluation, Gonzalez also received “a $5,000 increase to his deferred compensation plan,” which totaled “$35,000 per year above his salary.” [2]

However, for Gonzalez to receive the 5% pay increase he must receive a favorable evaluation from city council. All have been favorable except that in 2016, Gonzalez was not evaluated by city council.

The Ethics Investigation

In 2016, Tommy Gonzalez “requested that he not be given a performance evaluation or raise,” after ethics investigations in 2015. [2] On June 3, 2016, the City of El Paso Ethics Review Commission issued two letters of admonition to Tommy Gonzalez. The first letter states that Gonzalez “recklessly disregarded an applicable” city policy “by authorizing the installation of speed bumps on Stanton Street.” [5]

The second letter of admonition states that Gonzalez again “recklessly” disregarded city policy “by authorizing the resurfacing” of an alley in a city representative’s district. Both letters of admonition were made part of Gonzalez’ permanent employment record. [5]

In his current contract, the city council can “vote to reimburse” Gonzalez for legal expenses should he be named in another ethics complaint. [4] Curiously, the contract, as expected, requires Tommy Gonzalez to keep a residence in El Paso. But we could not find one for him.

Where Does Tommy Gonzalez Live?

The question of where Tommy Gonzalez lives is required by his employment contract. Under section 2.7, Gonzalez is required to keep a “permanent residence within the City of El Paso.” [4] However, it is not easy to answer the question of where in the city Tommy Gonzalez keeps his “permanent residence”. El Paso Politics looked for homestead exemptions for Gonzalez in El Paso and found none. We found 11 “Tomas Gonzalez” (his legal name) in our search of the El Paso Central Appraisal District’s property records. Because Gonzalez is also known as Tommy Gonzalez, we performed a search under that name and found none, as well.

To ensure due diligence we also conducted a search for properties under Gonzalez’s wife’s name, Sandra. We found 30 records, but none seemed connected to Gonzalez. We then conducted another search under her maiden name. We found 53 but because of the generic name we were unable to conclusively connect any of the properties under her maiden name to Gonzalez.

As far as we could determine, Gonzalez does not own property in El Paso.

However, that does not demonstrate that he does not meet his contract requirement’s that he keep a “permanent residence” in El Paso. To better understand this, we searched voting records to see where Gonzalez is registered to vote.

We should note that we also performed a commercial background check on Tommy Gonzalez to try to ascertain if he has a homestead anywhere else. Irving is a short distance from several smaller suburbs, not to mention Dallas so it was time prohibited for us to search property records across various jurisdictions, so we elected to perform a background check. We did not find a homestead record for Gonzalez in our searches.

We, did, however, find a property in Lubbock that seems to be connected to Tommy Gonzalez but we believe it is for one of his children who is attending school in the area.

Reviewing voter records we found that Tomas Gonzalez is registered to vote at an address on Franklin Summit Drive on the west side of town. (we have chosen not to publish the full address). We are confident that is the address where Gonzalez is registered to vote because we found another voting record at the same address for his wife. However, the house does not belong to him, according to the county’s records.

The house has been owned by a doctor since 2017. The doctor seems to be working for the U.S. Army, according to the records we found. Is it possible that the Gonzalez’ are or were renting the house from the doctor when they voted in 2020? The voting records we reviewed showed that in addition to the Gonzalez’ using that address for voting, two other individuals also used the same address for their voting records. Ashton (we are withholding the last name) used that address to register to vote in 2008 and Rosalinda (last name withheld by us) used that address to register to vote in 2020. Like the Gonzalez’, Rosalinda also voted in the 2020 elections. We do not know if Rosalinda is related to Gonzalez and the last names do not match. We cannot explain why Rosalinda, Tommy and Sandra voted using the same address. However, our exhaustive search of Texas voting records found no other instance of the Gonzalez’ casting a vote any other time besides 2020.

Questions About Property Taxes

Although renters pay property taxes through their rent payments, El Paso homeowners may be surprised to learn that our research seems to suggest that Gonzalez does not own property in El Paso. Gonzalez is the city official that creates the city budget that the city council authorizes.

Rising taxes are controversial in El Paso.

In a recent community meeting organized by city representative Joe Molina, El Paso’s city manager, Tommy Gonzalez was asked by the city’s taxpayers why the City was “not lowering the property tax rate in a year when a hot real estate market has caused home values to soar.” [1] As property values rise so do the associated taxes. The City sets the tax rate and although it has no direct input of how much properties are valued; the City can help defray the cost of rising property values by keeping the property tax rate at the point the city receives the same tax revenues as the previous year.

The tax rate, in conjunction with rising property values, the City is expected to receive larger revenues from property tax assessments, even if the tax rate remains unchanged. As we previously reported, El Paso has the second largest property tax rate in the nation. El Paso City Council has also issued the most certificates of obligation in Texas. Certificates of obligation are paid for by the taxpayers but do not require voter approval.

At the community meeting, Gonzalez told the audience members that the City was not raising the tax rate this cycle. However, the rising property values means that most homeowners will pay more in taxes next time they pay their taxes.

Does Tommy Gonzalez comply with the requirement that he maintain a “permanent residence” in El Paso remains unanswered. The inconsistencies we found in his voting record suggests that Gonzalez has not kept his voting record current or is using an address used by others. But for the taxpayers of El Paso, the most important discovery in our research of Gonzalez’ contract is that they will pay almost a million dollars when Gonzalez leaves, even if he leaves to take another job at another city. Finally, each year that Gonzalez remains in El Paso, the more expensive it becomes for the city’s taxpayers to rid themselves of him.

Footnotes:

1. Anthony Jackson, “El Paso City Manager Tommy Gonzalez answers questions from the public at community meeting,” El Paso Times, August 1, 2021.
2. Elida S. Perez, “El Paso City Manager Tommy Gonzalez gets $15,750 raise, $5,000 hike to retirement savings,” El Paso Times, August 20, 2018.
3. Estefania Seyffert, “A deeper look at El Paso City Manager Tommy Gonzalez’ new contract,” KTSM, December 13, 2018.
4. “Amended And Restated City Manager Employment Contract,” December 11, 2018 (received via Texas Public Information Act request).
5. Stuart R. Schwartz, Chairman, “Letter of Admonition,” City of El Paso Ethics Commission, June 3, 2016.
6. Attorney Brian Kennedy, email and telephone interviews, August 10 to August 16, 2021.

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