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October 27, 2013

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GOLIAD INVESTIGATION

Leaders look for way out of economic mess City aims to clean up Municipal Development District

BY MELISSA CROWE MCROWE@VICAD.COM

GOLIAD – This small town is struggling with a bookkeeping nightmare, a legal battle and little chance of a return on its investment of a million in tax dollars funneled through an unchecked economic development program. In reaction to a Victoria Advocate investigation, the city has ceased lending and hired an outside attorney and a financial consultant to clean up the eco-

Sutherland

nomic development program, called the Municipal Development District. Adair Sutherland, the longest-serving member of the Municipal Development District, said she wants to do away with the program and

SEE GOLIAD, A5

THE BACKGROUND

An extensive Victoria Advocate investigation revealed a program started to promote economic development has instead been riddled with poor record-keeping, questionable loan practices, missing documents and virtually no accountability. Since 2008, the city has issued about $550,000 of public taxpayer money in loans or grants in the name of economic development. Of the 13 approved loans and grants, six of 10 loans defaulted, two businesses closed, and several contracts could be up for legal dispute because of unclear contract terms or unsigned documents.

IN MEMORIAM

Farewell, Bum Football icon remembered at Goliad memorial service

WATCHDOG

Taco truck troubles? County sees them as restaurants BY JESSICA PRIEST JPRIEST@VICAD.COM

An Advocate reader complained recently that a taco truck in her neighborhood was unsanitary. Employees dump their dirty dishwater near her fence line, flies swarm the meat, and pa- JESSICA PRIEST trons do not HAVE A QUEShave a place to TION FOR go to the bath- WATCHDOG? room, she To submit quessaid. tions, email She was con- watchdog@vicerned the Vic- cad.com or call toria County 361-574-1222. Health Depart- No topic is ment wouldn’t off-limits. visit places that serve food after its workday ends at 5 p.m. This particular truck’s business picks up late at night as people let out from a nearby

BY MIKE FORMAN

MFORMAN@VICAD.COM

GOLIAD – Bum Phillips was well known as a football coach. But not so many knew of his love for ice cream. “He ate four Nutty Buddys a day,” said Dee Jean Hurta, Phillips’ daughter, who lives in Goliad. “I ate a bowl of ice cream and thought about him.” Phillips, who died Oct. 18 at his Goliad County ranch at the age of 90, was remembered at a memorial service attended by about 200 people Saturday at the Goliad High School auditorium. Phillips’ wife, Debbie, and his five daughters attended the service conducted by David Parks of the Trail Head Cowboy Church. Phillips was buried in a private service at the family ranch Wednesday that daughter Andrea McCarthy, of Dripping Springs, said included a hearse drawn by two white horses and a 21-gun salute from a Marine Corps color guard from Corpus Christi. “He touched lives in ways that you can’t imagine,” McCarthy said. The service began with a slide show of Phillips’ life accompanied by the music of Willie Nelson. Phillips’ commitment to charity, which led his family to start the Bum Phillips Retreat that included a summer camp for deaf children at the ranch, was evident. A sign language interpreter was at the service for

WATCHDOG

SEE FAREWELL, A4

SEE WATCHDOG, A8

YORKTOWN

Officials euthanize seized, sick horse BY BIANCA R. MONTES BMONTES@VICAD.COM

ONLINE

A horse seized from a Yorktown residence Thursday was euthanized Saturday afternoon. After receiving an anonymous tip, Yorktown officers went to a home in the 200 block of West 2nd Street, where they found two female horses that appeared malnourished, said Police Chief Paul Campos.

MASON TRINCA/MTRINCA@VIACD.COM

To hear more from one of Phillips’ daughters, go to VictoriaAdvocate.com.

Attendees file out of the Goliad High School Auditorium for the Bum Phillips memorial. The memorial drew about 200 attendees from around Goliad and South Texas. ADVOCATE PHOTO ILLUSTRATION FROM A PHOTO BY ASSOCIATED PRESS

ESSAY CONTEST

We narrowed down October’s essay contest to the five best memories of people who dealt with cancer. Who will win a $100 Regal Jewelers gift certificate for the best essay? You can help answer that question.

Go to VictoriaAdvocate.com/regal to vote on your favorite essay. Voting ends Wednesday. For November, we want essays about a military veteran who has a great story to share.

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VICTORIA ADVOCATE, Sunday, October 27, 2013 — A5

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GOLIAD: ‘I think there’s a lot that has gone on and has been going on that needs to be exposed’ CONTINUED FROM A1 return to one with state oversight. If Goliad had continued to operate under state rules governing economic development corporations, she said, “a lot of this would not have happened.”

Investigation Former members of the Goliad Municipal Development District said they saw the problems coming – when the program’s incentives focused on propping up business dead-ends and helping friends rather than creating jobs or boosting the economy. Newton Warzecha served on the board during its inception in 2008 until the day he resigned in 2011. “I think there’s a lot that has gone on and has been going on that needs to be exposed,” said Warzecha, executive director of the Presidio La Bahia in Goliad. “The public, the voters who elect those city officials, should know about it.” Since the Victoria Advocate’s extensive investigation into the development district’s lending practices began, Goliad County District Attorney Michael Sheppard called in the Texas Rangers to investigate those lending practices. Sheppard said the Rangers have “a plan of action” but did not want to release details about the ongoing matter. Mayor Jay Harvey has said he welcomes the investigation. His predecessor, former Mayor Bill Schaefer, said it is warranted. “There’s contracts not signed, contracts missing, money unaccounted for, and all this needs to be accounted for and taken care of properly,” Schaefer said. “I hope they will answer the public’s questions. Right now, the public has a lot of questions and rightfully so.”

Saw it coming Former city staff and board members said they worried some incentives helped friends of other board or council members. They cited concerns about members accepting bribes and kickbacks and being involved for personal gain. Former Economic Development Director Bridgette Bise said the problems started “long before” she was hired in 2012. “It bothered me that we had City Council members that owed the city money for businesses that weren’t in existence anymore,” Bise said. Bise, who also served as Main Street director and promoted community development, said she was “disheartened” and “frustrated” with the economic development program, the mentality of the city and, specifically, the Texonian development grant and loans given to council members Vicki Rubio and Lionel Garcia. Rubio was loaned $25,600 to open a video store that went out of business, and Garcia was loaned $31,128 for a laundromat. Garcia stopped making payments on his loan a month after being elected in May 2011. He recently started repaying his debt. “It was a mess,” Bise said. “Loans were given out to people who did not have the experience nor the background or references that we checked out.” Bise cited concerns about the development district and City Council awarding a $122,750 grant in 2012 for a 51-acre commercial and residential development. A year later, the field sits empty, and the grant money has not been disbursed. Roney Powell, a retired investigation sergeant with the Ohio State Patrol, knew what to look for to find fraud. Powell, who was a board member in 2008 and 2009 as well as a city councilman, said the board took a bad turn “when council people started using the MDD for their own benefit.” His wife, Linda, called it “the perfect storm.” It made no difference whether a vote was a good or bad business decision; the loans always passed, she said.

WHERE THE MONEY WENT ■ $122,750

grant to Texonian Development; the land has not been developed ■ $66,320 partially forgiven loans given to Angels RV Park ■ $65,845 loan and grant given to Goliad Funeral Home, which has been repaid ■ $60,000 grant to Best Western ■ $51,120 grant to Texas Star Investments ■ $50,000 loan to Antlers Inn, which is in good standing ■ $32,000 loan to ANS Welding ■ $31,128 loan to WL Laundry ■ $25,600 loans to Lone Star Video store, which has closed ■ $24,000 loan and grant to the Hanging Tree Restaurant ■ $19,588 loan to Panache on the Square, which has closed “I think it started with the majority of the MDD members never bothering to read their own policies and procedures,” she said. The mentality of helping each other – rather than being stewards of taxpayer money – took precedent in decision-making, she said.

Return to EDC Erika Bochat, who served as economic development coordinator before Bise for about two years, said the program was not as professional as it could have been, and the facts back that up, she said. “Yes, things could have been done more prudently,” she said. “City staff and decisions could have been made much more soundly by board members and by City Council.” The board developed a checklist and its own rules and regulations, Bochat said, “but then small-town politics comes into play.” She said her role was never influential. She worked with Goliad as the Main Street director when the town converted its state-regulated Economic Development Corporation into a Municipal Development District with no state oversight. The city manager at the time hoped the development district would bring in more sales tax revenue because it extended the taxation boundaries, she said. “I believe it met that to a small degree,” Bochat said. “We don’t have a lot of businesses in Goliad.” The program adopted a mentality of neighborly love, she said. “You have to live with

these people. That’s what made it complicated,” Bochat said. Sutherland, the long-serving development district board member, agreed. “If somebody came forward with a request, you don’t turn them down if it was the only request we’ve got,” she said. “When somebody came and wanted something, how can you turn them down when there’s nothing else around?”

Lending philosophy Since the start of the program in 2008, the longest-serving councilman, Buddy Zavesky, has backed it. During a recent council meeting, Zavesky said the members should have been more ethical but later defended their history of lending and their philosophy to recouping taxpayers’ investments. “I want their money, not their piece of property,” Zavesky said. “We’re not in the real estate business. We’re in the business of business. ... If somebody leaves us high and dry, then we’ve lost it, just like the bank has.”

Zermeno refused to comment on the issue, citing the ongoing Texas Rangers investigation. Zermeno served as the city’s financial officer in 2011 and 2012, during which time, the city gave out $308,870 in incentives, not including the loan for ANS Welding. The development board has hired Victoria attorney Kevin Cullen to represent it in the matter against the Welches. ANGELI WRIGHT/AWRIGHT@VICAD.COM City Attorney Terry BaiaTexas Star Investments was granted money for infrastructure on monte did not return multiple messages for comment. this empty lot on Pearl Street in Goliad. As a board member, Sutherland placed the Zavesky, a former mayor, quent payments, the dis- blame, albeit lightly, on the said he wants the loans to trict sent a collection letter City Council for the mess. grow successful business- to the owners of ANS Weld“The council – they’re not ing. es. an educated group,” she The two owners, Alvin said. “I don’t like to criticize “We want people to stay in their business and work,” and Stephanie Welch, re- the people I work with.” he said. “I don’t want them ceived a $32,000 low-interA new economic developto close up or owe money.” est and partially forgivable ment director, Jeremy So long as the debtors loan in March. Turner, who is a former emThe company said the ployee of Warzecha’s at the stay in town and assure the City Council they’ll eventu- business would bring more Presidio, started work with ally repay, Zavesky said, it’s oil-field industry to town the city last week. OK. The program, he said, and create jobs for 10 peoBut Sutherland said that is about keeping business- ple within three years. might not be enough to reInstead, the Welches nev- solve Goliad’s issues. es open. “There’s nothing here er purchased property in “Having an economic dethat would make me a dol- town, and the company velopment person very deflar,” he said. “I wouldn’t never opened. initely helps – if they’re edThe Welches’ attorney, ucated for the job,” she even go into the car wash Leslie Werner, refuted the said. “We’ll just have to wait business.” He said the town of 2,000 claims. and see.” “The GMDD ... has enresidents cannot compete She says the problem is with Victoria, about 30 gaged in extremely ques- rooted in due diligence. tionable and most likely tormiles down the road. “Had we had, throughout “I want to see what we’ve tuous conduct,” Werner this, really professional got stay in town and pros- wrote in a response letter, people doing their homeper,” he said. “They’re not demanding the board mem- work, a lot of this would going to make a million dol- bers cease all mention of have been avoided,” she lars at the laundromat, but the Welches. said. City Administrator Larry I want to have things here that these Goliad people can use.”

Legal issues Meanwhile, the development district continues to try to sort out its books. After five months of delin-


H2 — VICTORIA ADVOCATE, Sunday, November 3, 2013

VictoriaAdvocate.com

VIEWPOINTS

C

ongress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably Contest Entry to assemble, and to petition the government for a redress of grievances.

Editorial page editor: Lauren Hightower-Emerson, 361-580-6590, lhightower@vicad.com

– First Amendment to the U.S. Constitution

FROM US

Goliad takes first step toward fixing mess A ■ Topic: Economic development ■ Our View: City needs to drop or change its program

mess five years in the making can’t be fixed overnight. Since 2008, the city of Goliad funneled $1 million into an unchecked economic development program. In the wake of a Victoria Advocate investigation, Goliad leaders have taken first steps toward fixing the mess. Their best move was to stop adding to it. Once the Texas Rangers began an official investigation, Goliad City Council members had little choice but to stop lending money or issuing grants through the program. It also was wise to hire an auditor and a lawyer to sort out the mess. However, it’s unlikely the same leaders who got Goliad into this will be able to see their way out of it. Those running the economic development program developed an attitude of scratching each others’ backs rather than being good stewards of taxpayer money. This developed because a funda-

mentally flawed system allowed it. A little-known 2005 law expanded the use of municipal development districts across Texas, and Goliad leaders jumped on board, hoping to collect even more sales tax revenue and – here’s the rub – avoid any state oversight. Thus, few asked why when Goliad issued loans without signatures or adequate collateral to doomed businesses or, in some cases, to those that never even opened. Few asked why when city officials couldn’t properly account for the tax money collected and spent. Erika Bochat was Goliad’s Main Street director when the town converted its state-regulated economic development corporation into a municipal development district with no state oversight. Goliad set out to handle the development district properly, she recalled, “but then small-town politics comes into play.” “You have to live with these people,” she said in an Advocate sto-

ry examining how the mess started. “That’s what made it complicated.” This complication will remain until Goliad dumps its development district, either by ending its half-cent sales tax collection or by going back to an economic development corporation. Tax dollars should never be spent without accountability. Legislators must heed Goliad’s lesson by changing or killing municipal development districts across Texas. Three more development districts have formed since the Goliad mess came to light, bringing the statewide total to 28. It’s highly likely similar problems exist in many of these other development districts, which are mainly centered in small towns like Goliad. Given human nature, it’s naive to think otherwise. Who thinks it’s wise to have people spending other people’s money with no oversight? No, Goliad can’t find a way out of

MUNICIPAL DEVELOPMENT DISTRICTS

State legislators should examine the operations of the 27 other municipal development districts in the state. It’s unlikely the problems in Goliad are isolated examples: ■ Anahuac

Municipal Development District ■ Aransas Pass Municipal Development District ■ Azle Municipal Development District ■ Bangs Municipal Development District ■ Baytown Municipal Development District ■ Bertram Municipal Development District ■ Corral City Municipal Development District ■ Evant Municipal Development District ■ Fair Oaks Ranch Municipal Development District

■ Kemp

Municipal Development District ■ La Vernia Municipal Development District ■ Lakewood Village Municipal Development District ■ Morgan’s Point Municipal Development District ■ Murphy Municipal Development District ■ Natalia Municipal Development District ■ Oak Point Municipal Development District ■ Overton Municipal Development District ■ Ovilla Municipal Development District

its $1 million mess overnight. But the path toward financial responsibility is clear.

FROM OTHERS

■ Paducah

Municipal Development District ■ Point Comfort Municipal Development District ■ Presidio Municipal Development District ■ Rio Hondo Municipal Development District ■ Rising Star Municipal Development District ■ Rockdale Municipal Development District ■ San Diego Municipal Development District ■ Shenandoah Municipal Development District ■ Staples Municipal Development District

This editorial reflects the views of the Victoria Advocate’s editorial board.

FROM YOU

PHOTO CONTRIBUTED BY ANNETTE SANCHEZ

Siblings Vanessa Flores, left; Annette Sanchez, center; and Vincent Lara stand with their mother, Mary K. Lara, front.

SYNDICATED COLUMN

John Sharp shares experience of leading A&M

A

fter two years as chancellor of the Texas A&M University System, John Sharp, is it harder than being the state’s tax collector? “Yeah,” Sharp said without hesitation. “You bet.” The Democrat served 20 years in elective office – four in the Texas House, four in the Senate, four on the Texas Railroad Commission, eight as state comptroller – plus lost races for lieutenant governor in 1998 and 2002. “I thought I knew a lot about politics,” Sharp said in a recent interview. But there are so many different groups and institutions to deal with that Sharp says it’s a challenge just to keep up with them. They include 11 branches of A&M, six state agencies under its purview – “We’ve got offices in 250 of (Texas’s) 254 counties” – lots of research, fundraising and 50,000-plus students. He stays busy. Sharp describes the students as “really amazing” – and not just in school. Of the 1,000 volunteers who helped replant trees after the huge Bastrop fire, 900 were Aggies, he said. “It’s a huge research university that’s full of really brilliant people,” Sharp said. He’s been exposed to some “Wow!” moments – like hearing about research that figured out how to make planes so

they won’t burn. “Once a week, I try to meet with some researcher, DAVE just to see what they’re doing,” Sharp said. “Sometimes when I meet with them, I have to have an interpreter” – even though they’re speaking English. Sharp, 63, is proud of the $740 million raised during the last year – a record for A&M. Sharp got his bachelor’s degree at A&M, was student body president and has been an active Aggie alum. Is there a typical day? “Huh-uh,” Sharp said, shaking his head slowly. “Depends on whatever happened the night before.” His phone usually starts ringing by 6 a.m. When the Texas Legislature met for its regular biennial session last spring, Sharp moved back to Austin. “You have to be there,” said Sharp, who knows the people, the process and the back halls in the Capitol. He spent the five years before his election to the House as a Legislative Budget Board analyst. Sharp has worked to strengthen the A&M brand – buying Texas Wesleyan University’s law school in Fort Worth to be the Texas A&M University

McNEELY

YOUR POEM

EDITORIAL BOARD Dan Easton, Publisher

John M. Roberts,

President, Chairman of the Board

Catherine R. McHaney, Secretary-Treasurer

Chris Cobler,

Editor, Vice-President of Content

School of Law, bringing the health science center under the system’s flag, outsourcing landscaping and building maintenance and food service. He’s ruffled some feathers. Food service workers were nervous about their jobs and pay, but “in fact, everybody’s still there – with a raise,” Sharp said. The tens of millions of dollars saved are going into academics, Sharp said. Shortly after this interview, Sharp and Gov. Rick Perry went to Israel to announce that A&M will open a Peace Campus in Nazareth – promoting coexistence with a student body of Arabs, Jews and foreigners. And then, there’s football. The Aggies joined the Southeastern Conference, or SEC, in 2012, and then beat the hottest team in that league, the University of Alabama. “If we want to be great in football, that’s the place: tougher, faster on TV every week,” Sharp said. It helps recruiting top players, Sharp said. Students hoping to play professional football know the best ticket to the pro draft is through the SEC. “It turned out to be one of the best decisions we’ve ever made,” Sharp said. “We gave them a way to stay at home (in Texas) and be in the SEC – and be on TV.”

Becky Cooper, Local Editor

Tony Balandran,

Delivery Desk Editor

Lauren Hightower-Emerson, Community Conversation Editor

Camille Easton,

Sponsorship Coordinator

Opinions published on this page under the heading “From Us” represent the consensus views of the editorial board of the Victoria Advocate, whose members are named above.

Angel in My Window Angel, you flutter there, Transparent in light. Don’t take off in flight. Where would you go? My window is your home. Sr. Frances Cabrini Janvier, Victoria

Sharp says the football program’s success and Aggie quarterback Johnny Manziel’s stunning Heisman Trophy award last year, boosted fundraising and A&M’s academic reputation. “Football makes people look at you,” said Sharp. He said one Aggie backer compares the football program’s success to using duck decoys to attract live birds. “They’ll come over and look at you,” Sharp said. And then learn A&M is the No. 1 research university in the southwest. Sharp said head coach Kevin Sumlin is a tremendous recruiter. In 2012, before the first game in the new league, Sharp asked Billy Pickard, a trainer who had been at A&M since Sharp’s student days, about the football team. Pickard said he wasn’t sure how the team would do, “But I will tell you this: These kids are going to play far better than they are.” Why? Their tremendous respect for and loyalty to Sumlin, Pickard said. “If Sumlin wanted you dead,” Sharp said Pickard added, “you wouldn’t live 10 minutes.” Dave McNeely retired from the Austin American-Statesman at the end of 2004 but still writes a weekly column. Email him at dmcneely@austin.rr.com.

WORDS Now the names of the twelve apostles are these; The first, Simon, who is called Peter, and Andrew his brother; James the son of Zebedee, and John his brother; Philip, and Bartholomew; Thomas, and Matthew the publican; James the son of Alphaeus, and Lebbaeus, whose surname was Thaddaeus; Simon the Canaanite, and Judas Iscariot, who also betrayed him. Matthew 10:2-4 “Intelligence without ambition is a bird without wings.” Salvador Dali, Spanish painter

Family comes together during brother’s illness Editor, the Advocate: My “little bro” is a very strong and young-at-heart man. He’s 47 years old and has multiple myeloma cancer. I’m Annette Sanchez, 48 years old, and my brother’s name is Vincent Lara, but we call him “JR.” If you saw him today, you wouldn’t even know he’s sick! We as a family have been through a lot this year with our precious mom being sick and in and out of hospital all year long. Despite that, he has always been by our sides through it all. There are four of us siblings. Our older brother, Roy DeHoyos, and little sister, Vanessa Flores, who is 35 years old. Right now, she is a very special person in our lives and our familia. She just completed everything needed to be done for a stem cell donation for our little brother. He had already done round one with his own stem cells but never went into complete remission. So we pray every day that our little sister’s stem cells will cure him forever!

Annette Sanchez, Victoria

Lying has become art form in modern politics Editor, the Advocate: Fear is a dangerous thing; it births arrogance, ignorance and pride which, when working together, are even more dangerous. Also, name calling can be one of the lowest forms of covert flattery; it compensates and makes one feel superior to and so, so better than others. Lying is a dangerously divisive art form that requires the perpetrator(s) to become masterful at it, thus enhancing the fear factor for factless factoid effect (I think). History has graciously given us many great liars e.g.: Satan, Hitler, Stalin, Cheney, Ted Cruz, etc. It’s deja vu all over again, and we are living in an age when liars are praised and deified, while truth seekers are made fun of and demonized. Seems we must, of necessity, fight this battle over and over again, as we go struggle along on this “mortal coil.” My fellow Americans, the script is being flipped daily for us. Now, we find ourselves in the tea party era where no one seems to care for truth, and lying has become a lucrative form of art for political purposes of sorts (sigh). Maybe so, maybe not. Well, at least we know where the truth isn’t and where it can be found. Let’s thank God for His amazing grace, OK?

Rufus C. Diggs, Victoria

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Goliad mess complete  

Goliad mess complete  

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