CORPUS CHRISTI, Tx — Just one month after requesting public documents from the City of Corpus Christi, the City Manager made changes to the city's purchasing card policy.
KRIS 6 News has also learned that the City Auditor is investigating an allegation of misuse of these cards.
That investigation began in part after 6 Investigates submitted that request in July.
A city employee also made a confidential report alleging misuse of these cards to Gil Hernandez, District 5 Council Member and chair of the city's Audit Committee.
As the city developed its budget for the year, employees with the city began reaching out to 6 Investigates telling us to look into monies spent on food and entertainment by top executives at the city.
"Any time you have shortfalls in the budget, you have to question every expense," said Hernandez.
6 Investigates requested several documents from the city back in July and additional documents in August and September. To date, we have not received all of the documents we've requested.
KRIS 6 filed a complaint with the Attorney General alleging violations of the Public Information Act.
For the last few months, 6 Investigates has been digging into documents provided by the city. They reveal extensive food purchases made by executives and assistants to the city's top executives.
From September 1, 2023, to July 30, 2024, the city's fifth floor spent more than $44,000 at local restaurants, including the Yacht Club, Aka Sushi, Koi Sushi, Vietnam, and Katz 21, to name a few.
SNAPSHOT OF EXPENDITURES:
- Yacht Club, $13,053.44
- Aka Sushi, $1794.75
- Koi Sushi, $3,147.04
- Vietnam, $2290.80
- Katz 21, $2555.00
Zanoni said these expenditures are primarily due to staff having to work through meals, so the city picked up the tab.
"In all of those occasions, every one of them, it's us working around the clock to make a better city. It's that simple," Zanoni said.
The city also spent just over $5,000 on snacks and drinks at HEB and Sam's Club, and $8,000 at the American Bank Center while negotiating Industrial District Agreements.
"Our budget is a $1.8 billion budget, so $44,000 is insignificant in terms of the size of the budget. It's the cost of doing business in the city," Zanoni said.
The budget referenced by Zanoni is a combination of the operating and capital budget. However, the budget for the general fund is $294.3 million.
Between April of last year and the end of July 2024, 6 Investigates found the city had also spent over $25,000 at Corpus Christi Hooks games.
"We should be doing that," Zanoni told Chief Investigative Reporter Bryan Hofmann.
"So we should be spending an extra $25,000 on food and drinks for city officials?" Hofmann asked.
"We should be supporting the Hooks. The City Council, who are the chief ambassadors for the city should be doing that," Zanoni said.
Memos on purchasing card statements revealed multiple city departments, including the City Manager's Office and elected officials, were treated to nights at the ballpark. All on the taxpayer's dime.
Part of the agreement between the city and the Hooks means for half of the home games each season the city receives suite access to the city-owned baseball stadium, along with a food and drink allowance of $500 per game.
TOP 5 HOOKS CHARGES, ABOVE $500 CREDIT:
- 5/4/2024, City Manager's Office, $1,603.80 (a notation indicates the city should have received a $1,000 credit)
- 7/21/2024, Information Technology and City Manager's Office, $1,129.80
- 5/25/2024, Animal Care Services, $930.60
- 5/23/2024, Human Resources, $930.60 (a notation indicates the city should have received a $500 credit)
- 7/30/2024, Fire department, $849.00
"With the Hooks we have, I would say, a sweetheart deal with them, you know? The cost for the insurance on the building is more than what we receive in lease expense for the year," Hernandez said.
Zanoni defended these charges and highlighted the economic impact garnered from these games.
"You have a $450 million economic impact that you have annually, we want that to continue. That's not going to happen if we are nowhere to be found," Zanoni said.
In August, before the city turned over the documents requested by 6 Investigates, Zanoni wrote a six-page memo to the City Council about that request, along with an explanation for some of these charges.
Seven days after that memo was sent to the council, an update to the city's P-card (Purchase Card) policy was made.
"In light of your (6 Investigates) review and the one that the auditor is doing, we revised our P-card policy," Zanoni said.
That update includes a new section detailing allowable uses for business meetings and meals, as well as a requirement that anyone attending those meetings be listed on the receipt.
"All these expenditures, I should say, make sure you (Bryan Hofmann) and Rachel (Denny Clow) know, are approved by a checks and balance system through the city. So all the ones you are referring to were approved by the then-chief financial officer," Zanoni said.
However, a review of reimbursement requests submitted by Zanoni reveals several of these requests were not approved by the chief financial officer, but were approved by his assistant at the time. 6 Investigates also found reimbursements for monies spent at the Yacht Club included sales tax, despite the city being tax exempt.
According to a memo issued by City Auditor George Holland, there are significant gaps in the policy that do not address best practices.
Zanoni said when he was hired as the City Manager, the city did not have a p-card policy.
MORE: Original procurement policy
"The City Council requests, and kind of expects, or demands that I engage with business leaders across the city and really across the state and country to create economic developments and jobs across the city," Zanoni said.
The City Auditor has made several observations and recommendations related to reimbursements to the City Manager and has recommended a full audit of purchasing cards.
According to the memo issued Friday, the auditor recommends Zanoni's contract be updated to identify a maximum spending limit, payment of sales tax should be limited or eliminated, the City Secretary should be the approver of the City Manager's reimbursements or expenditures, and the Audit Committee and a City Council Member should review expenditures monthly.
While Hernandez would not comment on the pending investigation into these purchases, he said policies needed to be strengthened.
"From my perspective, I want to make sure that we tighten up some of these policies and we have the accountability there so we don't have this situation in the future and we can fix this and be accountable to the taxpayer that we are not spending their money foolishly," Hernandez said.
DOCUMENTS RELEASED:
On July 16, 6 Investigates requested bank statements corresponding to the purchasing card issued to the executive assistant to the City Manager between the dates of January 1, 2023, and July 30, 2024.
On July 30, The city released bank statements between September 30, 2023, and July 30, 2024, which did not contain any detailed transaction information. It did not release bank statements between January 1, 2023, and September 29, 2023.
It also released Zanoni's requests for reimbursement related to purchases at the Corpus Christi Yacht Club.
A new request for public information was submitted to the city on August 14, requesting itemized bank statements corresponding to purchasing cards issued to nine city employees. The city ran these reports on August 15 and provided some of the records to 6 Investigates on August 26. Additional documents were provided on September 5.
Documents:
Wells Fargo Statements - August 26 release
Wells Fargo Statements - September 5 release(On September 9, 6 Investigates notified the city that documents were missing from this request. To date, these documents have not been provided.)
A new request for public information was submitted on September 5, requesting additional requests for reimbursement.Documents were released on September 18.
A review of those documents reveal some documents should have been released, but were not, in the request submitted on July 16.
