Thursday marks the end of Tommy Gonzalez’s tenure serving as El Paso’s second city manager, leaving an interim in place as the city moves forward with finding a permanent replacement.
Gonzalez’s contract came to an abrupt end in February when the El Paso City Council, with a tie-breaking vote by Mayor Oscar Leeser, voted to use a new clause in the city manager’s employment agreement that allowed for his termination without good cause.
Throughout his controversial tenure, the city has undergone multiple changes and challenges, including a migrant humanitarian crisis, the 2019 white supremacist attack at an El Paso Walmart where 23 people were killed, and the COVID-19 pandemic.
His departure comes at a time when the City Council is entering its annual budget season where it must adopt a new budget and tax rate to fund city operations for the next fiscal year, as well as a search for a new police chief following the death of Greg Allen.
El Paso Matters has taken a look back at some of the key decisions that will have a lasting impact on the city, including the change in Gonzalez’s contract that led to his termination, budget and taxes, economic development and both voter and non-voter approved debt.
The role of the city manager is to execute programs and policies directed by the mayor and City Council through the administrative management of city departments, appoint executive leadership to oversee staff operations and city services, and manage the city’s annual budget, among other responsibilities.
Gonzalez oversaw a budget of about $1 billion for the city government that employs close to 7,000 people. He was hired in June 2014 to replace Joyce Wilson.
City officials in March said a new city manager would likely not be hired until at least November. But without stating a reason, the council this month deleted an item to hire a Chicago-based executive search firm from its June 20 meeting agenda. A timeline for the process has not yet been presented to the City Council.
Cary Westin, a former deputy city manager, is serving as interim city manager until a replacement is hired.
Gonzalez, 56, did not respond to El Paso Matters’ request for comment for this story. He’s been on-call but working remotely to assist with guidance or advice for Westin as needed the past month, city Rep. Art Fierro said. It was unclear if Gonzalez is still in El Paso.
The day the City Council voted to terminate his employment agreement, Gonzalez said it is not unusual in his line of business for elected officials to decide they want a change in direction with leadership.
“It’s the council’s prerogative,” Gonzalez said, adding he is confident in the leadership team in place that will carry the city forward until a replacement is hired. “I want to thank the City Council and also want to thank this community. Again, it’s been my wife and kids home, everything that El Paso has done for us and all the things we’ve been able to contribute to this wonderful community. We love El Paso. It’s been a great situation.”
Before coming to El Paso, Gonzalez served as city manager in Irving, Texas, where he left with a lucrative exit contract under a mutual parting agreement. He previously served as a city manager in Harlingen, Texas, and assistant city manager in Dallas and Lubbock. He also served as vice president of a construction company in Fort Worth, and retired as a lieutenant colonel from the U.S. Army Reserve.
Gonzalez’s controversial contract
The city manager’s employment agreement with the city of El Paso became controversial after his first year on the job. Leeser, while serving his first term as mayor, and the prior City Council in 2015 boosted his salary by 25% even though his contract entitled him to a 5% merit increase based on his annual performance evaluation.
In 2016, Gonzalez waived his annual performance evaluation and pay raise after a city Ethics Review Commission report showed he may have violated city purchasing procedures when he asked to shorten the bidding window for a lucrative financial adviser contract.
That could have canceled the existing adviser’s contract in favor of a new one. That same year, the city’s ethics investigator found evidence Gonzalez violated city policies and procedures regarding street projects, including resurfacing and the installation of speed humps, in connection with former city Rep. Larry Romero.
The City Council at the time established a “goals and expectations” plan for Gonzalez that resulted from discussions in executive session where a performance improvement plan was debated.
From there, elected officials continually amended his contract over the years to include benefits not afforded to many other city managers throughout the state – including paid travel and accommodations for annual executive physicals in Dallas, thousands in deferred compensation, a $5 million life insurance policy, contract extensions years ahead of schedule and several more, costing taxpayers at least $269,000 annually.
A flurry of contract negotiations occurred in the spring of 2022, months ahead of Gonzalez’s annual evaluation when he was named a finalist for a city manager job in Frisco, Texas. He was given extra benefits, despite two mayoral vetoes, to keep him from leaving El Paso, including a contract extension. Gonzalez withdrew his name from the running for the Frisco job.
The final amendment to his contract in October that included the termination “without good cause” clause gave a new City Council majority the opportunity to end the employment agreement.
Gonzalez’s starting salary in 2014 was $238,959 and ended at about $442,000.
The city will pay Gonzalez about $890,000 to end his employment contract.
Drawing Topgolf, economic development
Throughout his tenure, Gonzalez prioritized luring companies to El Paso with various tax breaks to spur economic development and tourism.
Among the first large companies was Topgolf in 2016. At the time, the city awarded the multi-million dollar, high-tech golf driving range about $5 million in tax incentives to set up shop in West El Paso, although the company initially said it would have come to the city without them.
The company quickly withdrew that assertion after city officials contacted them following El Paso Times reports that Topgolf officials said they would have opened in El Paso regardless of the incentives. The City Council at the time approved the incentives.
Topgolf opened its doors in 2018.
During Gonzalez’s administration, the city has also drawn companies such as Cabelas, Alamo Drafthouse, Whole Foods, Sprouts and Dick’s Sporting Goods.
Great Wolf Lodge
Although Gonzalez was able to draw several big-name companies to El Paso, one of the deals that fell through involved the effort to attract Great Wolf Lodge Resorts to open a location in West El Paso.
The multi-million dollar deal involved a controversial $18.6 million land swap with El Paso billionaire Paul Foster. The deal involved swapping Foster’s 44 acres of land on the Westside with more than 2,300 acres of city-owned land in the Northeast to pave the way for the would-be resort.
But city officials were not clear on whether the land swap would still occur if the deal with Great Wolf Lodge fell through. During a November 2018 City Council meeting where the council voted to approve the land swap, Gonzalez and City Attorney Karla Nieman gave contradicting statements about whether the land deal would move forward regardless of the company’s commitment.
The City Council ultimately approved the land swap in 2018, but Great Wolf Lodge pulled out of the deal in 2020 amid the spread of the COVID-19 pandemic. The land swap remained in place.
Certificates of Obligation
The city has, for years, relied on issuing certificates of obligation – bonds that don’t require voter approval – for a variety of projects.
Currently, the city has about $852 million in outstanding certificates of obligation debt, including interest, since 2013, according to city budget documents.
Under Gonzalez’s tenure, the city has issued about $545 million of the non-voter approved debt since August 2014. The various bond issuances total about $801 million including interest that taxpayers are on the hook for through August 2047, city documents show. Current and prior City Councils have approved the use of certificates of obligation.
Certificates of obligation, although initially used by municipalities to address emergency spending after disasters, have been increasingly used for a variety of projects.
El Paso ranks third when it comes to the top Texas cities issuing the most certificates of obligation, according to the most recent report released by the Texas Bond Review Board. In the 2020 report, El Paso was in first place. The most recent report shows Denton and San Antonio have surpassed the Sun City.
But among the state’s six largest cities, El Paso’s per-capita CO debt remains the highest by far, according to the Texas Bond Review Board report.
The city has used certificates of obligation to supplement the cost of quality of life projects, streets, purchasing emergency vehicles and were used to build bathrooms in San Jacinto Plaza, among several other projects whose funding method was approved by City Council.
Voter approved debt
In 2012, under Wilson’s administration, voters approved a $473 million bond to fund park and library improvements, community centers and other quality of life projects.
As different elected officials debated and changed the scope of the projects in the decade following the bond election, the projects’ size grew, costs ballooned and preferred location changed. None of the three signature bond projects have been completed, though the children’s museum and the cultural center are now under construction in Downtown.
The city has used millions of dollars in certificates of obligation to supplement the cost of quality of life bond projects that have at-times grown based partly on community feedback.
Projects that were not spelled out in the original bond included the four water parks built in different parts of the city. Those multi-million dollar facilities that opened in 2021 had a $1 million deficit after the first year of operations.
The controversial Downtown multipurpose arts and entertainment center that had been stalled for years with ongoing litigation, now remains in limbo. The City Council in January scrapped the original plans and site for the project that was to be located in the Duranguito neighborhood in the Union Plaza area of Downtown El Paso. The city is in the process of reevaluating the project scope and location.
In 2019, voters approved an approximately $413 million public safety bond to fund a variety of projects and improvements for the El Paso Police Department and El Paso Fire Department, including a new police and fire academy. The projects are expected to be rolled out over the next five to seven years, according to city officials.
Rising property taxes
Gonzalez made key changes in the city’s financial portfolio during his nine-year tenure.
Some of the key accomplishments touted in his bio on the city’s website include eliminating a $7.8 million general fund deficit in 2014, eliminating a $27 million operating deficit in the mass transit department and eliminating an annual $1 million operating deficit at the city golf course. Gonzalez, on his city profile, also touts increasing the city’s fund balance by $118 million going from a nine-day fund balance to 91 days.
But in the process, El Paso homeowners have borne the brunt of growing property taxes ultimately approved by current and former City Councils.
The main driver of rising property tax bills since 2012 has been the city of El Paso, which has been responsible for half to almost two-thirds of the total tax increase for average value homes, according to an El Paso Matters analysis.
City property taxes have continued to climb over the years based, in part, by increasing property values and the tax rates set by the city. Other contributing factors include the rising cost of salaries through collective bargaining agreements with the police and fire departments.
Last year, the total city investment in public safety from the general fund was $305.6 million, an increase of $15 million from the prior year.
The most recent collective bargaining agreement, approved unanimously by the City Council on March 28, stipulates pay raises for police officers over the next four years which will have a $14 million impact on the city’s budget in the first fiscal year.
For fiscal year 2023, the city lowered its property tax rate – the rate levied per $100 in property valuation – but many homeowners saw increases in their tax bills because the drop in the tax rate did not offset the steep increase in home property values.
Lean Six Sigma
Gonzalez has long-touted a Lean Six Sigma Black Belt certification from the University of Texas in Austin. The program is designed to cut costs and reduce waste and inefficiencies in local government.
During his first year on the job, Gonzalez implemented the Lean Six Sigma training model he used at his former city manager position in Irving, Texas.
The training involves city employees, rather than high level managers, working together to analyze workflows and find ways to be more efficient. It also asks the citizens who use city services to help brainstorm better practices.
He has also implemented Baldrige Foundation Institute for Performance Excellence framework strategies for best practices in the organization including public engagement with area groups and organizations.
City officials have said the programs have helped the city achieve $147 million in cost savings and over 40,000 hours of staff time by implementing numerous Lean Six Sigma projects.
In 2022, Gonzalez received the E. David Spong Lifetime Achievement Award from the Foundation for the Malcolm Baldrige National Quality Award.
Gonzalez’s thoughts on leadership
During a January 2021 “Grow Great” city government leadership podcast by the executive coaching and consulting company Bula Network headquartered in Bedford, Texas, Gonzalez talked about what shaped him as a leader.
“I think leadership teaches you that you need to take responsibility for where you are in life, and where you are in your station in life, and that you could have done something different for there to have been a different outcome,” he said.
In addressing challenges – citing not getting the top administrative job in Lubbock years back – Gonzalez said there’s lessons learned in every success and every failure.
“What I do know about leadership, about life and about what God’s plan is for all of us, is that I’m where I am today and I’m better because of all those experiences if I learned from them, if I don’t let them bring me down, if I don’t let them win.”