3 Austin departments dropped $15K on holiday parties, but spending policies aren’t clear

Investigations
Investigative Summary:

When Austin city employees party around the holidays, there’s no clear policy curbing how much public money can be spent. Financial records show some city departments spent more than $15,000 on food, gifts and entertainment for their employees at holiday parties last December. KXAN also found the combined spending nearly outpaces Houston, Dallas and Fort Worth combined.

AUSTIN (KXAN) — The photo booth camera flashed and a DJ blasted songs on the speakers as hundreds of people celebrated at the Hyatt Regency on Barton Springs Road in Austin.

It was a Texas-sized holiday party for 325 City of Austin Development Services Department employees that Dec. 19, 2018.

The final tab: $15,323.77 of public money.

“To me that seems like a whole lot,” laughed one man whom we showed the records. “We never had a DJ.”

KXAN began looking into how much City of Austin departments were spending on holiday parties after we received a tip from a concerned city employee. We researched the issue for months and made requests for spending from over 30 city departments.

Spending varied widely among departments

Five City of Austin departments spent at least $10,000 on holiday parties late last year.

DSD was one of three city departments to spend more than $15,000 for its employees on holiday and end-of-year parties and events for its employees.

Records show the city’s Convention Center Department spent $15,177.24 on catering, gifts for employees, games and prizes. The Department paid for a karaoke system and “80s Rock Star” dress-up sets.

Fleet Services spent an average of more than $50.00 per employee for two separate events in December. One of those events is listed as something called “Department Trivia,” and it cost $3,750.

But not all the city departments we examined for this story spent thousands of dollars on parties and recognition events for employees.

Austin-Travis County EMS spent a total of $188.89 for an end-of-year potluck luncheon.

“We want to provide something for our employees,” said ATCEMS Commander Mike Benavides. “They work hard.”

Receipts from H-E-B and Cookbook Bar and Café for that party resemble more what you’d see at a picnic: chicken salad, Cuban sliders, melon and iced tea.

Spending records show other city departments, such as 311, Public Library and Human Resources also spent less than $1,000.

“The optics are important, but it’s not the sole reason you do something responsible,” Commander Benavides said. “It’s because you know it’s taxpayer funded.”

Departments respond

We reached out to the city departments we profiled in this story for a response, and all of them defended the spending.

The Development Services Department sent out a statement which says the “department’s holiday luncheon is in compliance with the City’s Awards and Recognition (A&R) Program. It added that each year, it allocates funding for the events based on number of employees. It also noted that “these A&R events have contributed to increased morale, performance, and productivity” since an analysis showed employee morale was at an all-time low in 2015.

Austin Convention Center Department Director Mark Tester said his department is self-sustained and “uses no General Fund (Austin taxpayer) money for its operation.” He responded to this story, saying, in part:

The December meeting – along with recognizing our phenomenal employees – is a good opportunity to convene the diverse, multi-facility ACCD workforce to hear from departmental leadership. Departmental performance, accomplishments, upcoming building events, and training are all included in the meeting agenda, providing an essential business function. As a result, the December meeting has proved extremely valuable in attaining high customer survey scores.

When asked about the spending within Fleet Services, Director Jennifer Walls said she is proud of her team’s work and that, “The annual Employee Appreciation event we host at the end of each year is often the only time our 230 employees spread across 8 locations can come together as a department to honor and recognize the people working behind the scenes to keep the City moving.”

Spending policies aren’t clear

KXAN showed the numbers to taxpayer advocate Bill Oakey, who says certain city departments should be more reasonable with how they spend public money.

“You don’t have to be a party pooper,” he told us. “You just have to realize that $15,000 for one department is too much for a holiday party.”

Oakey says the spending discrepancies among city departments suggest there’s no clear policy over how much public money city departments can spend to party.

We requested any and all policies from the city related to this type of spending. The only document the city could produce was an administrative bulletin, last updated more than a decade ago.

It reads, “Examples of authorized employee events include: department or division wide holiday events, group recognitions, project completion ceremony, and staff recognition or awards events.”

It goes on to say “a department director shall exercise good judgment and discretion in authorizing an expenditure for an approved purchase.”

Oakey says without a clear cap on spending, the policy could easily be abused.

“If you don’t have any guidelines at all, we could have girls jumping out of cakes and people diving into champagne fountains,” Oakey said.

To be clear, no department paid for any alcohol for their parties, according to the receipts KXAN obtained.

Weeks ahead of this story airing, KXAN asked to interview someone in the City Manager’s Office about the lack of clear policy regarding party spending. A spokesperson told us no one was available to interview and sent us this statement:

“The Employee Award and Recognition program provides City Departments the opportunity to acknowledge and show appreciation to the City’s workforce.  Part of leading a highly productive and engaged workforce is recognizing the work of our employees. Annually funds are provided to departments and are used for employee appreciation events.  There are several ways in which employees are recognized: team recognition, project recognition, and employee-to-employee recognition. 

Recognition of employees contributes to high performing organizations and reinforces that an employee’s contribution is appreciated.  The City of Austin supports these programs and appreciates the work our employees perform for the residents of Austin.”

The city spokesperson told us there is no formal documentation that dictates a specific dollar amount for parties.

He did reference a “$65 per full time employee” rule for Awards and Recognition spending that may have gone into effect in the late 2000s but couldn’t “reliably confirm it ever existed.”

We went to check for such a policy at the Austin History Center, but the only record related to Awards and Recognition spending was from the 1980s.

KXAN spent weeks reaching out to every City Councilmember and Mayor Steve Adler to see if they thought the spending was excessive or if the policies needed to change.

Most councilmembers said they were too busy to interview, even after looking at the findings.

“They [city leaders] shouldn’t open the door for every department, regardless of its size, to spend $15,000 on a party,” Oakey said.

After our story aired on Wednesday, Austin Mayor Steve Adler sent out this statement on the matter:

“City employees are some of the hardest working members of our local workforce and take pride in making Austin work for everyone. They choose public service, not for the perks, but for the purpose. That said, local government should always be working to get better and we’ll look at this.”

Austin vs. other Texas cities

Party costs in December from 34 Austin city departments came out to a total of $140,532.97.

KXAN requested the same spending numbers from other Texas cities: Houston, Dallas and Fort Worth.

Records show Austin departments spent nearly as much as those three cities combined.

Records show Houston spent $80,347.42, Dallas spent $59,799.17 and Fort Worth spent $900.00.

The total for those cities came out to $141,046.49.

For perspective, the city of Dallas employs 13,208 people. That’s similar to Austin’s 13,500 employees.

The city of Houston has about 22,000 employees.

We reached out to the cities of Houston, Dallas and Fort Worth to find out what kind of spending policies they had for these kind of parties.

Houston’s policy is similar to Austin’s, reading that “department directors may develop additional departmental employee service and recognition programs, at their discretion.”

The city of Dallas could not provide us a written policy.

Fort Worth doesn’t have any caps on spending either. The city sent a statement that reads in part “The city promotes progressive, productive work practices and supports ‘planning ahead’ in order to achieve the best possible results. It is important to be sensitive to how expenditures may appear to the City Council and to the public. Please bear in mind that City purchases have been reviewed through public information requests and results broadcasted on legal media in recent years.”

A spokesperson for the city of Fort Worth also told us most money for parties comes from donations or is paid by individual employees.

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