Rio Grande City utilities director alleges theft within department

Updated at 10:03 p.m. with the mayor’s comments.

When Rio Grande City commissioners launched an inquiry into the conduct of their public utilities director, they sought to learn more about comments he made to a local news outlet in which he alleged theft and other corrupt acts within his department.

No action was taken against the director, Steven Cruz, in the end. Instead, what came of that inquiry were more details of the allegations Cruz made of the department.

In a letter to the city attorney and the city manager as part of the city’s inquiry, Cruz elaborated on the comments he made to El Tejano, a local media outlet.

Cruz listed issues he said were brought to his attention and that the city administration allegedly asked him to look into.

The first was in January 2019 when he first became the utilities director. At that time, administration asked him to look into invoices from a local mechanic for work on one of their fleet trucks that hadn’t been done.

“We sent the truck back and asked for the truck to be looked at because it was still having the same issues from what it was originally sent for,” Cruz wrote. “In return we were sent back another invoice from the mechanic for additional repairs that needed to be made.”

At that point, Cruz sent the truck to a local dealership where staff there verified the truck was still under warranty but also that none of the work for which the city had paid the mechanic had actually been done.

“Upon further investigation I also found out that the local mechanic was directly related to the previous Director,” Cruz added.

In March 2019, Cruz said he looked into possible kickbacks for work with a particular vendor after it was discovered that the previous public utilities director allegedly instructed that vendor to raise the price of the pump the city was purchasing by $10,000.

“Employee JEC, who is the previous director’s uncle and an employee of the department, also persisted that the city purchase that pump from that specific vendor,” Cruz stated in the letter. “When I came in and did further research, I discovered that the vendor that employee JEC was pushing for was buying the pump from another vendor but marking up the price.”

Then in May 2019, the city manager told Cruz that City Commissioner Dave “Chachi” Jones believed the public utilities department had paid for work that hadn’t been completed or wasn’t done correctly. When Cruz looked into it, he found that under the previous public utilities director, the city had paid for work that either wasn’t rendered or wasn’t completed.

“The city manager and myself met with the contractor and asked why he had not completed the work,” Cruz wrote. “He stated that the previous Director told him he did not need to complete the work as was originally requested.”

The city was paid back for the work that wasn’t done and the council was notified, Cruz said, but then the contractor asked to meet again.

“He stated that Commissioner Jones called him and told him that we brought up the issue about him not completing the work and that Commissioner Jones was upset with me and the city manager for doing that.”

Cruz further wrote, “I explained to the contractor that I clearly had no knowledge of what was going on seeing how this was done prior to me coming to work with the city, however, seeing that I now knew about it, we had to get it resolved.”

When reached for comment, Commissioner Jones defferred to the mayor.

He said all the information on this was turned over to the city manager who, Cruz said, had worked to ensure the contractor fulfilled his end of the agreement. This issue, however, has not been fully resolved.

Another issue was that the city was also receiving high invoices from a local store used as a vendor for materials and equipment, averaging $5,000 to $6,000 per month in expenses from that store, according to Cruz.

At the same time, Cruz said, some employees complained that JEC — the previously mentioned employee — would take “parts” for side projects and work that he was doing for that vendor.

Cruz said they hired an inventory specialist who verified there was a lot of materials that weren’t accounted for and, following that report, the department changed the locks to the warehouse and positioned surveillance cameras inside. Since then, the city averages about $1,500 to $2,000 per month on material expenses.

Staff is also required to log out material that are being used.

While that investigation was ongoing, Cruz said he was receiving unusual invoices for service repairs to the city’s pumps and lift stations.

He noticed that it was the same vendor being called after hours to fix the pumps and it appeared that the pumps were going down when JEC’s crew was on call.

“Upon further investigation, documentation and reviewing of time sheets, it showed Employee JEC and his crew were documenting that they were in fact working overtime to fix the pumps that were down and the vendor was being called our for the same job,” Cruz wrote.

“We were receiving invoices for the same work Employee JEC was stating that he was doing,” he added.

Cruz said he and the city manager met with the vendor who said he was doing the work but when they asked Employee JEC, he also claimed he and his crew were doing the work.

Cruz stated he told JEC that anytime a repair was going to be made that he need to know and Cruz also made it clear they would not be doing business with that vendor anymore. Since then, the department’s cost in repairing the pumps significantly declined.

Employee JEC, Cruz noted, is the uncle of City Commissioner Rey Ramirez and at one point, Ramirez allegedly pulled Cruz aside to ask about the investigation into JEC. Ramirez reportedly said it would not be a good thing for these issues to come to light with elections coming up.

“He stated that if his uncle did wrong, then he would have to face the consequences but that he would appreciate if these things were kept quiet and possibly put to rest,” Cruz wrote.

Ramirez did not return requests for comment as of press time.

When Employee JEC later failed to show up to work for four days, Cruz was prepared to terminate him for job abandonment but Ramirez asked them not to.

“(Ramirez) stated that he did not need the negative publicity right now and that Employee JEC was a good employee he just needed to be talked to,” Cruz stated. “The next day Employee JEC showed up for work.”

In June 2020, Cruz alleged that Employee JEC had purchased new tires for a trailer for which they had just bought tires less than two months prior. Employee JEC purportedly explained that he felt the current tires were no longer safe.

Cruz told him, though, that the first set were still under warranty. Those original tires were inspected by the vendor and it was determined that all but one were still good.

Lastly, around May 27, 2020, the city manager received reports that public utilities staff were seen doing work outside a private residence that allegedly belonged to the sister of Employee JEC, the mother of Commissioner Ramirez.

Cruz said he had been unaware of the job and had not authorized. Another employee told him that Commissioner Ramirez called Employee JEC to install pumps at the house, an allegation Cruz said he denied.

When the news media had begun inquiring about the work, Ramirez allegedly told Cruz he needed to come up with something to tell the media to “kill” the story.

When asked about the veracity of these allegations or whether any of the facts were in dispute, City Attorney Calixtro Villarreal provided the following the comment:

“On October 1st, I first received the referenced allegations when Attorney Sonny Palacios, on behalf of his client Steven Cruz, provided me with a courtesy copy of the same. Since being provided with that information, I responded to Attorney Palacios. Specifically, I suggested to Mr. Palacios that if he held the position that such allegations were valid, then he should report the same to the appropriate enforcement agencies. The City of Rio Grande City is committed to fully complying with any such enforcement agencies that may determine it appropriate to conduct subsequent investigations.”

Palacios, Cruz’s attorney, said on Monday that he had not referred those allegations to law enforcement but intended to do so.

Mayor Joel Villarreal, however, said the city attorney had sent over the document to their police department.

“Through our attorney, this was sent to the PD and they do have a packet of this as well but the ones that are going to have more information at this point is of course our city manager and Mr. Cruz,” Villarreal said.

But Villarreal said that some of Cruz’s allegations were already referred to the police department when they were first discovered but were deemed to be unfounded.

He questioned why some of these issues were resurfacing now and questioned why the others weren’t reported to the police. In the letter, Cruz wrote that all but one were either reported to the city manager, the city commission, or both.

The mayor, however, stressed that employees are instructed to report wrongdoing to law enforcement and then cast doubt on whether some of those allegations were actually brought to the attention of the commissioners.

“To assume, and again some of these are assumptions, that nothing was done and it was still reported, well, wait a minute, we’re not even there yet,” Villarreal said. “We’re not even there to the point to say that it was completely reported to everyone and that everyone was aware and we didn’t take corrective action.”