Ex-interim city manager Jesús Garza accused of violating ethics code

AUSTIN (KXAN) -- A complaint was filed by the city of Austin Office of the City Auditor with the Ethics Review Commission (ERC) against former interim city manager Jesús Garza for allegedly violating the city's code of ethics.

KXAN reached out to the city of Austin, and a spokesperson provided this statement:

"The City of Austin has been apprised of this allegation, which has now been referred to the Ethics Review Commission, and will let the process run its course."

Shortly after Garza was appointed interim city manager in February 2023, he was accused of violating the city code for hiring two people without getting approval from the Austin City Council, according to an independent investigation conducted by the city auditor's office.

The investigation said Garza used his "official position to secure a special privilege" for Joe Canales and Laura Huffman. They were both hired as subcontractors under the city's 2017 contract with PFM Financial Advisors, LLC (PFM FA). The city executed that contract with PFM FA, which provides "financial advisor services."

The city auditor's office said both Canales and Huffman were paid more than $265,000 in city funds. The city charter limits the city manager's purchasing authority with "amounts up to $76,000," according to the investigation.

"The original contract with the financial advisor firm has a scope of work focused on financing programs, studies of fees and enterprise funds, and other financial focused items. The scope of work for Canales and Huffman focused on organizational health and structure, workforce initiatives, problem identification, and project tracking," the city auditor's office said in a statement.

A statement provided on behalf of Garza said he disagreed with the complaint and report.

Read that full statement below:

I disagree with the complaint and report.  In early 2023, the City of Austin faced an emergency---with multiple unprecedented crises and challenges highlighted in 2021 and 2022 City Auditor reports, including the aftermath of recent winter storms, issues with our 911 call center and the need to restore public confidence in city departments.  It was essential to have the right expertise, so in the essence of time, I brought two highly skilled former City of Austin employees to address and solve these issues effectively.  They upended their lives to serve the city and organization they care deeply about, achieving widely recognized and outstanding results that fully justified their compensation. 

The hiring of these individuals did not require formal City Council approval, as they were brought in as subcontractors under an existing City contract managed and approved by the Finance Department.  The process used was vetted and approved by third parties.  I believe this report and the allegations unfortunately overlook  the urgency of the situation, and the valuable work done by these dedicated professionals. Jesus Garza statement on the report