‘Inquiry’ underway into planned $300K payment to outgoing Tarrant water district boss
Lawyers for the Tarrant Regional Water District are conducting an inquiry into the former board president’s plan to allow the outgoing general manager an extra $300,000 in post-retirement compensation, the board president said Wednesday.
Board president Leah King on Tuesday flagged the planned payment as improper and potentially illegal, before the board unanimously voted to revoke the payment.
The plan came to public light on Tuesday, when King announced at a meeting that former board president Jack Stevens had “unilaterally directed” the water district’s staff to make an exception to the paid leave policy. That exception would have allowed outgoing general manager Jim Oliver, who has led the district for 35 years, to cash in on an extra $300,000 after his retirement at the end of June.
King has so far declined to comment on how the board became aware of the planned payment.
“My hope and expectation is that an even clearer timeline of events will be able to be shared once the attorneys have completed their work,” she said.
King said lawyers are gathering more information and interviewing those involved in the plan. The lawyers did not give a timeline for the inquiry, she said, adding that it may be slowed if they are unable to reach some current or former water district employees.
The Tarrant Regional Water District provides raw water to a number of customers, including the cities of Arlington and Fort Worth. The district also oversees a number of other projects, including the years-long Panther Island/Central City project, which has a price tag of more than $1 billion.
There has not been a formal legal ruling or opinion on whether the planned payment to Oliver violated or would have violated any laws. The Tarrant County Criminal District Attorney’s Office, through a spokesperson, declined to comment on the matter.
But King on Tuesday mentioned two areas of concern: the planned payment and the process by which it was put in place.
The process
Mark Burge, a professor at the Texas A&M University School of Law, said he’s particularly concerned with the claim Stevens set up the payment on his own, without input from the rest of the board or the public.
“The problem with the process used here is that it lacked transparency,” Burge said. “If the action could be taken unilaterally, then there’s no opportunity for pushback. And I think that’s a real problem.”
Under the water district’s paid leave policy, employees are allowed to store up to 1,040 hours of unused paid time off.
But the paid leave exception directed by Stevens, according to King, would have allowed the outgoing general manger to walk away from the water district with more than 3,100 hours of unused paid time off — three-times the typical cap.
And with a salary of $323,294, that means Oliver would’ve been able to bank about $480,000 worth of paid time off, as opposed to what would be his typical cap of about $160,000 worth of time.
King said Stevens issued the exception directive in March, less than two months before he lost his reelection bid. In mid-June, about a month after the new board was sworn in and Stevens left office, the board found out about the former president’s payment plan, King said.
The board members then unanimously revoked Stevens’ action on Tuesday, a day before Oliver’s retirement became official.
The district’s paid leave policy includes a clause allowing exceptions, which “may be made by the General Manager, Deputy General Manager, Assistant General Manager, or Board Members at any time.”
Typically, a public, taxpayer-funded entity such as Tarrant Regional Water District would vote on expenditures in a publicly accessible meeting. That allows for media outlets to report on the expenditures and for local residents to voice their opinions.
In this case, the planned payment to Oliver was not listed on the board’s meeting agendas and, according to the meeting minutes, was not publicly discussed in meetings.
“There was no opportunity for people to object, for people to say that this would not be a good use of public funds,” Burge said. “I think the board is absolutely right to pull this back, because we haven’t even been down that road.”
Stevens and Oliver did not respond to requests for comment on Tuesday and Wednesday.
Use of public funds
On Tuesday, King noted that the rest of the board had not been consulted in Stevens’ decision, but she also pointed to sections of the Texas constitution that outline acceptable and nonacceptable uses for public funds.
The state Attorney General’s Office, when asked in 2018 about the bounds of public funding, wrote in an opinion that public money must be used for public purposes. Pointing to previous state Supreme Court cases, the Attorney General’s Office wrote that public entities’ expenditures should:
Have a public purpose and not solely benefit a private party.
Remain under public control.
Lead to a “return benefit” for the public entity.
Burge noted that public entities are allowed to arrange employment contracts and payments, including employee severance packages. But, he said, the arrangement that Stevens made does not appear to be a severance package.
“It looks more like it’s an end-run around severance by adding these compensation hours that then would result in this additional $300,000 payment. And I think that was another part of the problem was this was kind of a back channel way of creating a severance payment,” he said.
Burge said he didn’t feel comfortable commenting on the legality of the payment itself, and instead pointed back to the process.
“My perspective is we haven’t even gotten to the point of debating the merits, because of a flawed process,” Burge said.
Council member Cary Moon, chairperson of the city’s audit committee and a fiscal hawk when it comes to Fort Worth’s finances, said there is always a concern about the legality of misspent dollars. But he doubts there would be any legal consequences for the planned payment to Oliver. Government employees are required by law to repay overpayments, he noted.
However, Moon commended the board for quickly overturning the payout.
“Great work by the newly elected TRWD board to correct arrogance and nepotism,” he said.
‘We shouldn’t have anything to hide’
King said in a Wednesday interview that she and at least two other water district directors campaigned on transparency and openness.
She said that push didn’t stem from the Stevens-Oliver situation, but that the timing was “fortuitous.” The board, King says, hopes to review the district’s governing policies and work toward posting more information online.
“It’s those types of things that we intend to move forward with to get this district to a place where it’s really the envy of other entities in terms of how we govern and how we make information available to the public,” King said.
At the water district board’s Tuesday meeting, before entering executive session to discuss the planned payment to Oliver, the board held a brief “discussion of transparency.”
Directors Jim Lane and Mary Kelleher, who had requested the topic be added to Tuesday’s agenda, said they hoped that the district could become more open with the press and the public.
“We shouldn’t have anything to hide, so we should just put it out there and let the people see it, because we’re here for them,” Kelleher said.
The directors turned to incoming general manager Dan Buhman at some points and asked him to look into ways to increase transparency.
“I’m happy to be part of that,” Buhman said at the meeting. “I certainly think we have made a lot of efforts in the past to be transparent, but I think there’s always room for improvement and I’m committed to working with the board of directors and staff and getting all those ideas we can to be more transparent.”
Buhman, who has been serving as deputy general manager, steps into the water district’s top role on Thursday.
With a new board sworn in less than two months ago, and a new general manager set to take the reins this week, the water district is in a moment of transition.
Fort Worth Mayor Mattie Parker said she believed the water district board members and Buhman would lead the district with “solid judgment and transparency.”
Luke Ranker contributed to this report.
This story was originally published June 30, 2021 at 5:20 PM.
