City no longer governed only by very well-to-do citizens
Updated Tuesday June 16, 2015 12:23pm (regarding retirement, not resignations, of Rod Ellis and John Hrncir)
Updated Thursday June 18, 2015 1:12pm (regarding Karen Kennard’s connection to Scott Joslove)
Updated Friday June 26, 2015 2:45pm (regarding Delia Garza’s law school)
Updated Monday June 29, 2015 2:52pm (to publish Personal Financial Statements for Mayor Steve Adler, Council Member Gregorio Casar, and Interim City Attorney Anne Morgan)
Updated Wednesday July 2, 2015 12:18pm (to publish the Personal Financial Statement for Council Member Ann Kitchen)
Two years ago the headline for the story about our annual analysis of financial statements filed by officeholders was “Austin Governed by the Well-to-Do.” That broad generality can no longer be applied to the members of the Austin City Council.
Of the many changes wrought by electing council members from 10 geographic districts, it is significant that Austin has achieved not only a geographic balance and a more representative ethnic and racial balance of power, but also installed a governing body that includes members who had modest incomes.
This is the fifth year The Austin Bulldog has obtained, by filing public information requests, the sworn financial statements filed by the mayor and council members, reported on them, and published source documents. This year the city manager and city attorney’s statements have been added. (Links to previous coverage are at the bottom of this story.)
The Austin Bulldog publishes financial statements to provide greater transparency and allow increased scrutiny of these officials for possible conflicts of interest. Aside from publishing these statements for public inspection, The Austin Bulldog reviews each one, does additional research, and questions the filing officials when errors or omiissions are found.
A detailed spreadsheet, 2014 Personal Financial Activity of Mayor, City Council Members, City Manager & City Attorney, provides a comprehensive overview of each official’s finances. The financial statements themselves are linked at the bottom of this story.
The mayor and City Council members—in addition to scores of salaried city officials—are required by City Code to file a Statement of Financial Information (SFI) and swear that it “is in all things true and correct and fully shows all information required to be reported pursuant to Section 2-7-72 City Code for the reporting period indicated.”
The council members, city manager and city attorney also must file Personal Financial Statements (PFS) that require the filer to “swear or affirm, under penalty of perjury, that the statement “is true and correct and includes all information required to be reported by me under Chapter 572 of the Government Code.”
Out of sight, out of mind
For all the swearing and affirming as to the accuracy and completeness of financial statements, the government agencies where these records are filed impede public access by keeping them tucked away in the clerk’s office. These statements are not published on the Internet and are accessible to the public only in the City Clerk’s office during regular office hours or by filing a public information request.
No city officials review financial statements for completeness or accuracy.
These reports are separate and apart from contribution and expenditure reports these officials filed while campaigning. But it is interesting to note the City of Austin and other agencies go to great lengths to make campaign-related reports available on the Internet. The result is that it’s easy to find out who’s supporting the candidates you can vote for, but difficult to monitor their ethics once elected.
Not only must you file a public information request to get copies of the these statements but in addition, for the Personal Financial Statements, you must also—as required by state law—complete a form listing the official’s name whose statement you want, the date of the request, your name, your address, and the name of who you represent (if applicable).
Legislation passed in the Texas Senate this year would have required Internet posting of the Personal Financial Statements, but the bill never got to a vote in the full House and died.
Nothing prevents the City of Austin from choosing to publish these reports on the Internet (although, for the Personal Financial Statements, completion of a request form would have to be part of the online access) but no one has taken up the cause.
Hence, The Austin Bulldog’s continuing focus on shining light where city government provides only darkness.
Why financial statements are important
Do these public officials have conflicts of interest in the decisions they make?
Do the way these officials handle their personal finances suggest a poor ability to manage? A susceptibility to corruption? These are vitally important questions.
Witness the plight of U.S. Senator Marco Rubio (R-Florida)—a candidate for the Republican nomination for president of the United States—who was hammered by the New York Times in a June 9 article that shows he has for years overextended himself financially with extravagant purchases. Even after receiving $800,000 to write a book about growing up as the son of Cuban immigrants he is struggling. Does this country need a president who can’t restrain his thirst for things beyond his means?
This examination of the personal finances of Austin’s top public officials suggests nothing of the kind is going on here.
But, when awarding contracts and making decisions about development incentives and zoning cases, the public still needs a way to monitor these officials. Are they looking out for the public good or looking for personal gain?
How would you ever know?
The answer is you won’t, unless you pore over the records published here, examine their finances, real estate holdings, and investiments, and watch what kinds of decisions are being made.
A more representative government
Geographic diversity delivered a governing body of elected officials whose economic interests and day-to-day concerns are more closely aligned with the constituents they represent, the people they see in the grocery store. Being of the people in their districts, they likely are more inclined to look out for them.
Which is one reason the new city council sworn in January 6 continues to spend so much effort trying to address the issue of affordability. Putting the brakes on, or at least providing a buffer against, the fast rising cost of living would be a major accomplishment. It might even help slow the exodus of residents of modest means.
Affordability was an issue that all elected officials heard concerns about when campaigning. To address it the council recently approved a 6 percent homestead exemption and has considered a program to buffer hard-hit tenants from rocketing rental rates. The exemption will have a very modest impact for most homeowners but it’s a step in the right direction, especially if the long-term goal of upping the exemption to 20 percent is achieved.
The council also filed a petition to challenge what it perceives to be undervalued appraisals of commercial properties. If successful and the appraised value of commercial property goes up, it would increase the taxes paid by commercial property owners and in turn allow a smaller property tax burden to fall on homeowners.
The council is also beginning to move on implementing several Homestead Preservation Districts. The goal is to increase home ownership, provide more affordable housing, and help prevent less well-off owners from losing their homes.
Freezing the city’s property taxes for citizens over the age of 65 is also being discussed.
Council includes some with modest means
An indication of how much the new council members would feel the pain of rising costs—especially before being elected—is that for some the basic city council salary of $70,705 a year represents a big jump in their income.
The financial activity reported concerns income, assets and liabilities for calendar year 2014—a time before all but one of the council members got on the city payroll. (Incomes and debts are reported in broad categories, not specific amounts unless $100,000 or more a year, and then only to the nearest $100,000.)
District 1 Council Member Ora Houston, 69 and single, reported 2014 income of at least $20,000 but less than $50,000 from her retirement as a state employee. She got an additional $10,000 to $20,000 from Social Security.
Her real estate holdings consist of her homestead and a vacant lot.
Though not wealthy, Houston opted to draw just $13,654 of her city salary this calendar year and will use the remaining $57,000 for other civic purposes. Houston got a financial boost last year that would help her personally in the form of a $50,000 gift from estate of Gretchen Claiborne, a retired Texas MHMR executive and longtime community volunteer.
Houston reported she was president of the Myra McDaniel Chapter of the Union of Black Episcopalians, chaplain of the Austin Alumni Chapter of Huston-Tillotson University, and board member of Youth Unlimited Inc.
District 2 Council Member Delia Garza, 38 and married early this year to Ramiro Martinez Jr., reported having earned at least $20,000 but less than $50,000 in her previous job as an assistant attorney general for the State of Texas.
The former Austin firefighter and University of Texas Law School Gonzaga University School of Law graduate’s biggest debts are student loans of $100,000 to get her doctor of jurisprudence degree and a $100,000 mortgage.
The new mom recently gave birth to her first child and serves on the board of no organizations other than the City of Austin.
District 3 Council Member Sabino “Pio” Renteria, 64 and married, reported having income of $10,000 to $20,000 from an IBM pension and a like amount from Social Security.
Although his wife, Lori Cervenak Renteria, is a retired employee of the Austin Independent School District, he told The Austin Bulldog she is too young to draw a pension and has no income. The only debt reported is a credit union loan of $10,000 to $20,000.
A homestead and a garage apartment on the property are the couple’s only real estate holdings. Each of them owns fewer than 100 shares of stock in IBM.
He serves on no boards of other organizations.
District 4 Council Member Gregorio “Greg” Casar, 26 and single, reported having earned at least $20,000 but less than $50,000 in his previous job as a community organizer for the Workers Defense Project.
In late March of this year, Casar, who lived in an apartment while campaigning for office, bought a house in District 4 and executed a promissory note for more than $336,000, according to the general warranty deed on file with the Travis County Clerk’s office.
Casar reported receiving an unspecified gift valued at more than $100 but less than $10,000 from Asha Dane’el.
He serves on the boards of no other organizations.
Wealthier areas elected more affluent officials
Mayor Steve Adler, 59, is the only official elected citywide under the 10-1 system that took effect with the 2014 balloting.
Adler, along with wife Diane Land, earned combined occupational income last year of $220,000 to $250,000, plus between $2.5 million and $3.1 million from a total of 21 non-occupational sources. The biggest piece—$2.1 million—came from his law firm’s dividend, interest, capital gains, and S-corporation income, Barron & Adler LLP.
He listed 71 clients served by Barron & Adler, including both companies and individuals. Of those, 24 clients are located in Austin. (For a complete list, click on the link for Adler’s SFI, below.)
Adler also reported making $200,000 through a real estate venture, Leander 70 Partners Inc.; $100,000 from a 401(k) plan; and another $100,000 from rental income. The city’s first family also has dozens of other investments including stocks and mutual funds.
Adler opted to forego the mayor’s authorized salary of $82,389, and instead uses that money for other civic purposes.
The mayor reported being on the board of nine organizations, four of which are businesses he is involved with, plus nonprofits including Ballet Austin, Ballet Austin Foundation, Breakthrough Austin, Anti-Defamation League Austin and the national Anti-Defamation League.
Land is, in addition to being a board member of four businesses, sits on the boards of The Contemporary Austin, The Contemporary Austin Endowment, the Ballet Austin Foundation, and the Anti-Defamation League Austin.
District 5 Council Member Ann Kitchen, 60, earned $100,000 last year as a consultant with Health and Community Strategies.
The SFI she filed did not report income earned by her husband, Mark Yznaga, as required by City Code, but when informed of this by The Austin Bulldog indicated she would file an amended Statement of Financial Information. The amended report should also include the full names of companies listed only by acronyms in her first financial statement.
The couple’s only real estate interest is their homestead. They have one loan of $50,000 to $75,000 and another of $75,000 to $100,000.
Kitchen reported she was chair and board member of two organizations: Liveable City and Texas Health Central Texas.
District 6 Council Member Don Zimmerman, 55, reported earning between $105,000 and $170,000 from his work as a software engineer and investments in two rental homes in Houston. His wife, Jennifer Winter Zimmerman, also earned $10,000 to $20,000 working for Alaska Airlines.
Zimmerman reported one bank debt of $75,000 to $100,000.
In his SFI, Zimmerman lists membership in only one board of directors, as managing partner of ZimWin Enterprises LLC. He did not list that board position in his PFS as required.
Additional research conducted in this analysis located records to show that Don Zimmerman is also on the board of director’s of Gideon’s Sword, a nonprofit corporation formed in 2012, according to records of the Texas Secretary of State. He did not list Gideon’s Sword as a board position in either the SFI or PFS. The Austin Bulldog e-mailed him June 14 and had not received a response in time for this article.
District 7 Council Member Leslie Pool, 60, and her domestic partner Will Grover earned a combined $40,000 to $80,000 from their jobs with Travis County and Seton Family of Hospitals, respectively.
They had non-occupational income of $30,000 to $80,000 from a rent house and stock in Apple Inc. They also own numerous other stocks.
Pool reported being the treasurer and executive committee member of Liveable City, which is chaired by Council Member Kitchen.
District 8 Council Member Ellen Troxclair, 30, and husband Caleb Troxclair earned a combined $200,000 to $250,000 last year. She is a Realtor and was chief of staff for State Representative Jason Isaac. He is chief of staff and general counsel for Texas Railroad Commissioner David Porter.
The couple reported having bank and credit union debts totaling $110,000 to $120,000. Their only real property is their homestead.
Troxclair did not report being a board member of any organization.
District 9 Council Member Kathie Tovo, 45, the only holdover from previous councils, and husband Tom Hurt earned between $90,000 and $185,000 last year from her city salary, his architecture practice, and a couple of small companies.
They enjoyed a much larger income of $2.3 million to $2.5 million from other sources: $1.3 million of it from oil and gas revenue and surface easement sales; $900,000 from the 2006 Hurt Family Trust; and small amounts from two other companies. In addition the couple have more than 60 other investments.
They own three real estate properties in Austin, one of which is their homestead, one a vacant lot, and a house being prepared for renovation. They have two mortgages totaling $1 million.
In addition to being on the boards of 10 business ventures they own, Tovo serves on the Community Action Network, Capital Area Council of Governments, and Campfire USA Balcones Council. Hurt is on the board of trustees of St. John’s United Methodist Church in Austin.
District 10 Council Member Sheri Gallo, 62, reported earning no more than $20,000 last year in real estate companies Mortgage Pros and Private Properties Inc., while husband William Hudspeth earned $400,000 as chairman of the Austin Trust Company.
Gallo and Hudspeth also earned between $140,000 and $380,000 from other sources, primarily a string of nine rent houses in Lubbock, all of which are on streets adjacent to Texas Tech University.
In addition to the rent homes, they own a homestead in Austin, agricultural land in Cedar Park, and vacant land in Leander.
Gallo is a member of the Development Board of the University of Texas at Austin, which advises the president and raises private support for the institution. She also chairs the advisory council of UT’s School of Social Work.
Hudspeth is on the advisory board of the Settlement Club, which works to support The Settlement Home for Children, whose mission is to provide a home for neglected, abused, and emotionally troubled children.
Top city staff members report too
The Austin city manager and city attorney, who reports directly to the city manager, are the only salaried city staff members required to file state-mandated Personal Financial Statements.
In addition to these two top employees, upwards of 150 other city staffers are required to file Statements of Financial Information. A link to The Austin Bulldog’s investigation of those statements—which a dozen of these employees failed to file—was published June 4, 2014, covering statements filed in 2013. (Link below.)
Although all city employees who file an SFI must list sources of income, assets and liabilities, City Code does not require a listing of the monetary amounts earned—not even in the ranges required of elected officials.
City salaries reported here for these salaried officials were obtained from the city’s Public Information Office.
City Manager Marc Ott, 59, earns $279,198 in the job he started in February 2008. As such, he manages the workforce in our council-manager form of government.
Although in past years Ott reported that his wife, Pamela Ott, was a surgical nurse at St. David’s Hospital, he did not list that information in his most recent SFI of PFS.
In reporting of real estate assets, Ott failed to list his homestead in either the SFI or PFS. Further, the lot he owns and reported in the PFS did not indicate the city of its location, and in the SFI he incorrectly reported that it was located in Austin, when in fact it is in Spicewood, according to records of the Travis Central Appraisal District.
The Austin Bulldog notified the manager of these errors and omissions in a June 2 e-mail. He responded June 5 to say he will look into these questions and it will take a few days to address them and file an amended report.
The manager also serves other organizations. He is a board member of the Alliance for Innovation, whose mission is to inspire innovation to advance communities with the help of partners Arizona State University and the International City/County Management Association.
Ott also is on the Transportation and Infrastructure Committee of the National League of Cities.
Locally, he is a community advisor for The Junior League of Austin, a women’s charitable organization that promotes volunteerism for numerous civic causes.
Interim City Attorney Anne Morgan, 53, draws a city salary of $168,500. Morgan was deputy city attorney under City Attorney Karen Kennard until last December, when Kennard was appointed Interim Intergovernmental Relations Officer for the 2015 legislative session, in the wake of resignations the retirement of Rod Ellis and John Hrncir.
These interim appointments were not among the records contained in the personnel files of Kennard and Morgan, obtained by The Austin Bulldog May 19, 2015, through a public information request. The Austin Bulldog filed an additional public information request May 30, 2015, for copies of records that show the effective date of these interim appointments. That public information request is still pending.
Morgan requested an extension to file her PFS, therefore it was not available for review. Her SFI provided by the City Clerk’s office contained two unauthorized redactions: The source of occupational income for her domestic partner, Catherine “Kate” Musemeche, and the names of four renters who occupied rent houses owned by Morgan or Musemeche.
The Austin Bulldog e-mailed Morgan to notify her there appeared to be no legal basis was for these redactions via e-mail June 4 and she provided an unredacted copy that day, stating, “I am not sure why a redacted version went to you.”
Morgan’s domestic partner, Musemeche, is a pediatric surgeon and author whose source of occupational income is the Texas Medical Board. The couple own eight stocks and commercial paper.
Morgan owns one rent house, Musemeche another. They jointly owned a house and sold it last year, and now jointly own their homestead.
Morgan reported being obligated for three mortgages and one loan.
Aside from her city duties, Morgan is the secretary for the board of directors of Goodwill Industries of Central Texas.
City Attorney Karen Kennard, currently assigned as Interim Intergovernmental Relations Officer, is paid a city salary of $193,918.
Kennard, 54, is single. She owns a house but rents it to a tenant and lives with longtime friend Scott Joslove in a house he owns.
Her voter registration records show Joslove’s address.
In the PFS reports that Kennard filed from 2010 through 2014 she stated that Joslove gave her gifts each year, such as jewelry, a painting, and a gift certificate. Gifts only have to be reported in the PFS if they are worth more than $250.
Kennard’s personnel record lists Joslove as one who will receive lump-sum benefits in the event of her death and is also listed as the person to contact in the event of an emergency.
But Kennard does not list Joslove, longtime president and CEO of the Texas Hotel and Lodging Association, as a domestic partner in her SFI. Hence she does not have to report on the source of his occupational income, assets and liabilities.
The omission of Joslove as Kennard’s domestic partner raised questions, given her residence, voter registration, and beneficiary designation.
City Code Section 2-7-71(2) defines:
“SPOUSE of a City official includes a domestic partner, which means an individual who lives in the same household and shares common resources of life in a close, personal, intimate relationship with the City official if under Texas law the individual would not be prevented from marrying the City official on account of age, consanguinity, or prior undissolved marriage to another. A domestic partner may be of the same, or opposite, gender as the City official.”
Do either Joslove or Kennard have a prior undissolved marriage to another? Why should Joslove not be listed as a domestic partner in Kennard’s SFI, with the attendant report of his sources of income, assets and liabilities? These are questions The Austin Bulldog posed to Kennard via e-mail June 8 and again on June 10.
Instead of responding to or ignoring The Austin Bulldog’s two questions, on June 11, Eloy Del Bosque, public information manager in the city’s Law Department, e-mailed this statement:
“Thank you for contacting the City of Austin. The City does not have any information that is responsive to your request. Your request is attached. If you have any questions, please let me know.”
In other words, Kennard, through the magic of obfuscation, transformed a request for comment into a Public Information Request. The Austin Bulldog’s June 11 reply to that tactic concluded, “Of all the lame responses I have received from the Law Department, this has to rank among the worst.”
Links to financial statements
2014 Personal Financial Activity of Mayor, City Council Members, City Manager & City Attorney (a detailed spreadsheet that provides an overview of information extracted from the individual statements)
Filers who requested more time to file their Personal Financial Statements are noted with “Extension requested.” These will be included and linked when made available.
District 1 Council Member Ora Houston 2014 Personal Financial Statement (Chapter 145)
District 1 Council Member Ora Houston 2014 Statement of Financial Information (City Code)
District 2 Council Member Delia Garza 2014 Personal Financial Statement (Chapter 145)
District 2 Council Member Delia Garza 2014 Statement of Financial Information (City Code)
District 3 Council Member Sabino Renteria 2014 Personal Financial Statement (Chapter 145)
District 3 Council Member Sabino Renteria 2014 Statement of Financial Information (City Code)
District 4 Council Member Gregorio Casar 2014 Personal Financial Statement (Chapter 145)
District 4 Council Member Gregorio Casar Statement of Financial Information (City Code)
District 5 Council Member Ann Kitchen 2014 Personal Financial Statement (Chapter 145)
District 5 Council Member Ann Kitchen 2014 Statement of Financial Information (City Code)
District 6 Council Member Don Zimmerman 2014 Personal Financial Statement (Chapter 145)
District 6 Council Member Don Zimmerman 2014 Statement of Financial Information (City Code)
District 7 Council Member Leslie Pool 2014 Personal Financial Statement (Chapter 145)
District 7 Council Member Leslie Pool 2014 Statement of Financial Information (City Code)
District 8 Council Member Ellen Troxclair 2014 Personal Financial Statement (Chapter 145)
District 8 Council Member Ellen Troxclair 2014 Statement of Financial Information (City Code)
District 9 Council Member Kathie Tovo 2014 Personal Financial Statement (Chapter 145)
District 9 Council Member Kathie Tovo 2014 Statement of Financial Information (City Code)
District 10 Council Member Sheri Gallo 2014 Financial Statement (Chapter 145)
District 10 Council Member Sheri Gallo 2014 Statement of Financial Information (City Code)
Interim City Attorney Anne Morgan 2014 Personal Financial Statement (Chapter 145)
Interim City Attorney Anne Morgan 2014 Statement of Financial Information (City Code)
Interim Intergovernmental Affairs Officer Karen Kennard Financial Statement (Chapter 145): Not required to file for 2014.
Interim Intergovernmental Affairs Officer Karen Kennard 2014 Statement of Financial Information (City Code)
Related Bulldog coverage:
Ethics Bills Face Complex Dynamics, April 20, 2015
Candidates Rich and Poor Competing, Sept. 30, 2014
Monitoring City Staff Conflicts of Interest, June 4, 2014
Austin Governed by the Well-To-Do, May 17, 2013
Some Council Members’ Finances Change Significantly, August 22, 2012
How Rich Are Austin’s Mayor and Council Members? June 27, 2012
Council Member Martinez Reports Big Gains in Financial Assets, August 17, 2011
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About this project
When this coverage was started in 2011 it included financial statements filed by then incumbent officials stretching back to in some cases to their activity in 2008.
This year’s analysis was hampered to a degree by the fact that five of the city officials filed a request for extension of time to file the state-mandated Personal Financial Statements due April 30, per Local Government Code Chapter 145.004. Council Member Renteria filed his PFS after receiving an extension.
The statute permits an extension of 60 days, although in the five years in which this coverage has been provided this is the first year in which this option has been exercised.
Each year the analysis and reporting has been refined and improved but, given the volume and complexity, it remains a work in progress. Suggestions about how to improve the delivery of key information derived from financial statements is encouraged and appreciated. (E-mail [email protected])
Non-occupational income for the purposes of this report does not include earnings from investments, mutual funds, business entities etc. In some cases that would amount to considerable wealth that is far beyond the amounts indicated in the spreadsheet for occupational and non-occupational income. This is especially true for Mayor Adler and wife Diane Land, Council Member Tovo and husband Tom Hurt, and Council Member Gallo and husband William Hudspeth.