AUSTIN (KXAN) – Several Austin City Council members say they want to learn more about a quasi-government company that operates the city-owned Hilton hotel in the downtown area – in addition to one of its new hires.
Austin Convention Enterprises, Inc., describes itself as a “public amenities company created by the city of Austin to own, finance and operate the Hilton Austin hotel.” Its chairman is former board member Jimmy Flannigan, who was hired to the post after lose in the second round to now, District 6 Councilor Mackenzie Kelly.
“ACE” is loosely connected to the city.
He has a certain autonomy, such as being able to perform contracts. It is authorized to issue bonds with the approval of the board, which does not affect the credit of the city of Austin, according to the city’s attorneys. The city has control in other ways, such as the ability to change organizational regulations.
Austin City Council also appoints volunteer board members. There are five seats: two are currently vacant.
Questions about ACE’s finances were raised when the organization sought council permission on Thursday to apply for a loan from the Federal Paycheck Protection Program. The money would go to the front line staff at the Hilton hotel.
Leslie Pool from District 7 says she wants the board audit and finance committee to start receiving financial updates from ACE.
“The point of getting the PPP loan for the employees is really important,” she said at Thursday’s meeting. “My concern about this is that it concerns the financial situation of the hotel. “
ACE board chairman Phillip Schmandt told KXAN on Friday that the hotel has performed very well in recent years, but has lost money at significant rates due to the pandemic.
The three-person board of directors hired Flannigan as its first president and sole employee. When KXAN investigator Kevin Clark asked Flannigan about his job description, he said it involved everything from high-level strategy to scheduling board meetings.
“There’s a lot of work around building maintenance and negotiating who pays for what,” Flannigan said.
Flannigan’s contract shows that he earns $ 140,000 for a part-time job of 20 hours per week. But Schmandt said no one would take the job months before Flannigan’s loss to the runoff and his subsequent hire.
“What better candidate than a member of the Austin city council involved in overseeing the convention center and hotel?” Schmandt said.
Some of Flannigan’s former colleagues aren’t so sure. More than one board member called Flannigan’s hiring and timing “awkward” and “uncomfortable.”
Another of Flannigan’s roles is to act as a liaison between the ACE Board of Directors and the members of the Board. The board appoints the members of the ACE board of directors, who hired Flannigan. He was on the board when these members were appointed.
“I’m also interested to hear the board talk about hiring a president because it’s something that gets talked about in the public,” said Kathie Tovo of District 9. “It’s a unusual for the board of directors of a [organization] it’s like a local government company offering a job offer to a board member while that person is still on the board.
Austin city code § 2-7-67 only says that a former city official must not, within 12 months of leaving that post, represent a person or entity that pays them before the city “regarding any case, project or matter on which the person exercised discretion “as a city official.
It’s not clear if this applies to council members, but a city spokesperson said KXAN’s council has sought clarification from the Legal Department.
Schmandt vehemently defended the hiring of Flannigan.
“We have asked our attorney to investigate cases where there is a revolving door order or any similar prohibition on contacting Jimmy and hiring, and the conclusion was no,” he said.
Schmandt added: “The fact that Jimmy became available when he lost his election was actually a boon to the company.”
KXAN asked Flannigan about the optics.
“The optics are what you make of them,” he said. “I’m the right guy for this job.
The Pool Board member said she expects the issue of ACE finances to be discussed at the next meeting of the Audit and Finance Committee. Flannigan said he looked forward to the opportunity for greater transparency, saying: “The board and ACE are part of the same team.”