Office of the City Attorney

March 21, 2017

Mayor
Oscar Leeser
Mr. David C. Stout
2808 Grant A venue
El Paso, Texas 79930
City Council

District 1 Via Certified Mail

Peter Svarzbein Return Receipt Requested
7015 3430 0000 2100 0170
District 2
Jim Tolbert

District 3 RE: Ethics Complaint Filed on February 14, 2017

Emma Acosta
George E. Salom, Tanny Berg, and Jorge Hernandez
District 4
Carl L. Robinson Dear Mr. Stout:

District 5
I am in receipt of the ethics complaint you filed on February 14, 2017. The City of
Dr. Michie! R. Noe
El Paso Ethics Ordinance is very precise in the manner in which complaints are to be
District 6 filed, and only those complaints which strictly comply with the Ethics Ordinance are
Claudia Ordaz forwarded to the Ethics Review Commission for consideration. Pursuant to Section
2.92.080(0) of the El Paso Municipal Code, the initial review of complaints is my
District 7
Lily Limon responsibility. Within 20 business days of receipt of a complaint I am obligated to:

District 8 1. Refer the matter to the Ethics Review Commission if the complaint is filed in
Cortney C. Niland
conformity with the requirements of Chapter 2.92 of the El Paso Municipal
Code and the matter is within the purview of the Ethics Review Commission;

City Manager 2. In the event that deficiencies in the complaint are identified that prevent the
Tommy Gonzalez
City Attorney's Office from making a meaningful review of and
determination regarding the appropriate disposition of the complaint, the City
Attorney's Office may notify the complainant in writing of such deficiencies
that could be capable of correction and request such correction within fifteen
days of the date of the communication to the complainant. The time for action
under this section shall be tolled while the City Attorney's Office awaits the
complainant's response, up to a maximum of fifteen business days;

Sylvia Borunda Firth - City Attorney

P.O. Box 1890/ El Paso, Texas 79950-1890 /915-212-0033 /Facsimile: 915-212-0034/ www .elpa sotexa s.gov
17-1020-1136/648007/Ethics Complaint by David C. Stout Again st George E. Salem. Tanny Berg, and Jorge Hernandez

"Delivering Outstanding Services"

 Page l 2

Office of the City Attorney

3. Dismiss any complaint that does not relate to a person subject to the
jurisdiction of the Ethics Review Commission, or any complaint, that if true
as alleged, would not as a matter oflaw constitute a violation of Chapter 2.92
of the El Paso Municipal Code; or

4. Refer complaints that cannot be readily assigned to the Ethics Review

Commission because of deficiencies, complaints that lack specificity in
identifying the alleged violations of Chapter 2.92 of the El Paso Municipal
Code, and complaints that appear to have been frivolously filed to a panel of
the Ethics Review Commission.

You have alleged the three board members named in the complaint violated Section
2.92.050 (C) of the Ethics Ordinance, which states that officers or employees, "Shall
not participate in making or influencing any city governmental decision or action in
which they know that they have any financial interest distinguishable from that of the
public generally, or from that of other city officers or employees."

Your complaint is in the proper format, and relates to individuals over which the
commission has jurisdiction. However, the facts you present in support of your
allegations do not provide proof of a violation. In fact, if the City Attorney's Office
had been given the same facts and asked to provide a legal opinion before the vote,
we would have advised Mr. Berg and Mr. Hernandez they do not have a conflict of
interest simply because they own real estate, "within the vicinity" or "within two
blocks of the project." Mr. Sal om would have received the same answer; but as a non-
voting member of the TIRZ No. 5 Board, his attempt to vote is a non-issue.

With this letter, I am forwarding copies of letters which I received from an attorney
representing all three of the board members in response to your complaint. The
communications include a sworn statement from each of the individuals. As you see,
they are not disputing the facts you presented and they admit to having an ownership
interest in the properties you identified. As a matter of law, simply owning property
in "the vicinity of' or "within two blocks" of a street project does not constitute a
financial interest distinguishable from the public at large. These facts are not in
dispute. I am dismissing your complaint in accordance with Section 2.92.080 (G)(3)
of the Ethics Ordinance because the complaint if true as alleged, would not as a matter
of law constitute a violation of the Ethics Ordinance.

Sylvia Borunda Firth - City Attorney

P.O. Box 1890/ El Paso, Texas 79950-1890 /915-212-0033 /Facsimile: 915-212-0034/ www.elpasotexas.gov
17-1020-1136/648007/Ethics Complaint by David C. Stout Against George E. Salom . Tanny Berg, and Jorge Hernand ez
 Page 13

Office of the City Attorney

Mr. Stout, I am aware of the fact you are the Chairperson of the board for TIRZ No.
5. The Assistant City Attorney who advises the board, Juan S. Gonzalez, will be
providing training for the TIRZ No. 5 Board regarding the legal standard for conflicts
of interest. Most, if not all , of the City's appointees to the board own real property
with the boundaries of TIRZ No. 5, so this will be a continuing issue. I strongly
recommend the questions regarding conflicts be posed before votes so the City
Attorney' s Office can provide legal guidance.

Sincerely,

~,. .-, ~u
Sylvia~Borunda Firth
City Attorney
Enclosures

cc:
Mr. George E. Salom
Mr. Tanny Berg
Mr. Jorge Hernandez
Mayor and City Council
El Paso Ethics Review Commission

Sylvia Borunda Firth - City Attorney

P.O. Box 1890/ El Paso, Texas 79950-1890 /915-212-0033 /Facsimile : 915-212-0034/ www.elpasotexas.gov
17-1020-1136/648007/Ethics Complaint by David C. Stout Again st George E. Salem . Tanny Berg, and Jorge Hernandez
 MOUNCE, GREEN, MYERS,
SAFI, PAXSON & GALATZAN
A PROFESSIONAL CORPORATION
ATTORNEYS AND COUNSELORS AT LAW

S. ANTHONY SAFI MONICA L. PEREZ

H. KEITH MYERS SHANNON C. RHOADS' TELEPHONE: (915) 532-2000
CARL H. GREEN BRADLEY H. BARTLETI*
JOHN S. BIRKELBACH GARRETT J. YANCEY MAILING ADDRESS:
KURT G. PAXSON P.O. BOX 1977
NORMAN I. GORDON WILLIAM J. MOUNCE EL PASO, TEXAS 79999-1977
MARKO.DORE ARTHUR R. PIACENTI
CLYOE A. PINE. JR' RENE CARLO BENAVIDES
BRUCE A. KOEHLER OF COUNSEL
STREET ADDRESS:
DARRYL S. VEREEN 100 N. STANTON, SUITE 1000
ANDRES E. ALMANZAN EL PASO, TEXAS 79901-1463
LAURA ENRIQUEZ MORRIS A. GALATZAN
RAMON BENAVIDES III' (1911-1999)
DAVID M. MlRAZO' WILLIAM T. KIRK FACSIMILE: (915) 541-1548
MERWAN N. BHATTI' (1940-2002)
WEBSITE: WWW.MGMSG.COM
ALSO MEMBER OF NEW MEX1CO BAR

February 28, 2017

Ms. Sylvia Borunda Firth

City Attorney
Office of the City Attorney
P.O. Box 1890 _.,
...,.,
El Paso, Texas 79950-1890 p .. -<
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RE: Ethics Complaint Filed by David C. Stout against Jorge Hernandez. ec rri
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Dear Ms. Firth, D
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C..) i:,
I am writing to you on behalf of our client Jorge Hernandez regarding the ethics CEfmp):aint
filed by David C. Stout on February 14, 2017 ("Complaint"). This will serve as Jorge Hernandez'
response thereto.

The Complaint fails to state with any specificity how Mr. Hernandez could stand to have a
financial gain from an improved sidewalk that is not along or adjacent to any property owned by
Teran Properties, LLC.

Article VI of the TIRZ No. 5 Board ("Board") Bylaws, states that a member "who has a
professional or financial interest . . . shall recuse himself/herself from the deliberation . . . and
shall not participate in action taken on that specific matter." The specific matter presented to the
Board that is at issue was the TIRZ 5 Funding to the Father Rahm Street Improvement Project.
The sidewalk that would be improved is only the Southern side of Father Rahm where the new
trolley is scheduled to travel upon its completion. 1

As demonstrated in the Texas Secretary of State Business Organization Inquiry attached to

the Complaint, Mr. Hernandez, is the registered agent for Teran Properties, LLC. The address of
Teran Properties, LLC is 615 S. El Paso Street, El Paso, Texas. This is not where the sidewalk
improvement on Father Rahm would be made. Additionally, as demonstrated in the property
records from the El Paso Central Appraisal District attached hereto as Exhibit "2", Teran
Properties, LLC owns property at (1) 519 S. Oregon Street, El Paso, Texas; and (2) 615 S. El Paso

1 Attached hereto as Exhibit "1" is the Official Route of the El Paso Street Car project.

1279690
Ms. Sylvia Borunda Firth
February 28, 2017
Page 2 of 2

Street, El Paso, Texas. These three properties are flagged in the map attached hereto as Exhibit
"3".2 Moreover, Mr. Hernandez does not live in the vicinity of the project at issue. Therefore, Mr.
Hernandez has no professional or financial interest in this matter.

Mr. Hernandez did not violate the Standards of Conduct under Section 2.92.050 of
Ordinance No. 017112 since he did not participate in a decision or action in which he had any
financial interest. If Mr. Hernandez had a financial interest in the sidewalk at issue, then he would
have recused himself from this matter.

For the reasons discussed above, the Complaint against Mr. Hernandez should be
dismissed. The required sworn affidavit from Mr. Hernandez is attached to this letter and
incorporated by reference as if fully set forth herein.

Should you have any questions, please feel free to contact me.

2 Although not included in the Complaint, Mr. Hernandez has an interest in the fo llowing additional entities: (a)
South El Paso Street Properties, LLC; (b) El Paso Shopping District, LLC; and (c) El Centro Real Estate
Investments, LLC. These entities own property on the addresses listed in Exh ibit "4" attached hereto, which are
property record listings from the El Paso Central Appraisal District. Also included in Exhibit "4" is a map that
flags the addresses where the listed entities own property. This fu1ther demonstrates that has no financial or
professional interest in the improvement at issue.
 AFFIDAVIT OF JORGE HERNANDEZ

STATE OF TEXAS

COUNTY OF EL PASO

ON TIDS DAY, personally appeared Jorge Hernandez, who being by me first duly sworn,
upon his oath deposed and stated as follows:
1. My name is Jorge Hernandez. I am over the age of twenty-one (21) years and am fully
competent to make this Affidavit. Each and every statement contained in this Affidavit is true
and correct.
2. I am Member of the Tax Increment Reinvestment Zone Number 5. As such, I have
personal knowledge of all facts herein stated.
3. I have reviewed the letter to be submitted to Ms. Sylvia Borunda Firth, City Attorney,
regarding a Complaint filed by David C. Stout on February 14, 2017, on my behalf by attorney
Kurt G. Paxson. The statements of fact made therein are true and correct to the best of my
knowledge.
Further Affiant sayeth naught.

SUBSCRIBED TO AND SWORN TO before me

certify which witness my hand and seal.

Notary Public in and for

The State of Texas

LUIS DORADO
!
Notary 10 # M 992 1
My commission Expires
February 15. 2o 2o
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Property Search

Year
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2016 : j
Teran Properties LLC Q.

Advanced Search

Found 2 results (1.78 seconds)

116258 C05099911800100 Name: Appraised Value:

TERAN PROPERTIES LLC Address: $195,702.00
519 S OREGON ST EL PASO, TX Details

127073 C05099911901100 Name: Appraised Value:

TERAN PROPERTIES LLC Address: $372,119.00
615 S EL PASO ST EL PASO, TX Details

No more results for "Teran Properties LLC"

First << ~ >> Last

Executive Director/Chief Appraiser General Information:

Dinah L. Kilgore, R.P.A. (915) 780-2131
Location: Email us: admin@epcad.org
5801 Trowbridge Dr. Webmaster: webmaster@epcad.org
El Paso, TX 79925
f; (915) 780-2000 2017 - El Paso Central Appraisal District
.E;_ (915) 780-2130
EXHIBIT

I 2-

2/27/2017
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2/28/2017
EI Paso Central Appraisal District - Index http://www.epcad.org/Search/Advanced?OwnerName=SOUTH+:

Property Search

Year
2016 [:]

SOUTH EL PASO STREET PROPERTIES LLC

Advanced Search

Found 4 results (1.36 seconds)

397927 C050999119031 oo Name: Appraised Value:

SOUTH EL PASO STREET PROPERTIES LLC Address: $357,377.00
603 S EL PASO ST EL PASO, TX Details

87802 -co5000011002100 Name: Appraised Value:

SOUTH EL PASO STREET PROPERTIES LLC Address: $859, 160.00
605 S EL PASO ST EL PASO, TX Details

329520 C05099911904100 Name: Appraised Value:

SOUTH EL PASO STREET PROPERTIES LLC Address: $528,770.00
601 S EL PASO ST EL PASO, TX Details

408710 C05099910000600 Name: Appraised Value:

SOUTH EL PASO STREET PROPERTIES LLC Address: $549,258.00
713 S EL PASO ST EL PASO, TX Details

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First << Q >> Last

Executive Director/Chief Appraiser General Information:

Dinah L. Kilgore, R.P.A. (915) 780-2131
Location: Email us: admin@epcad.org
5801 Trowbridge Dr. Webmaster: webmaster@epcad.org
El Paso, TX 79925
f.; (915) 780-2000 2017 - El Paso Central Appraisal District
f;. (915) 780-2130
EXHIBIT

.Lt
I of I 2/28/2017
El Paso Central Appraisal District - Index http://www.epcad.org/Search/Advanced?OwnerName=EL+PASC

Property Search

Year
2016 i::.J
EL PASO SHOPPING DISTRICT LLC

Advanced Search

Found 3 results (1.71 seconds)

37810 C05099911808100 Name: Appraised Value:

EL PASO SHOPPING DISTRICT LLC Address: $250,000.00
618 S EL PASO ST EL PASO, TX Details

55254 C05099911806900 Name: Appraised Value:

EL PASO SHOPPING DISTRICT LLC Address: $205,000.00
614 S EL PASO ST EL PASO, TX Details

248232 C05099911808501 Name: Appraised Value:

EL PASO SHOPPING DISTRICT LLC Address: $209,561.00
620 S EL PASO ST EL PASO, TX Details

No more results ...

First << 8 >> Last

Executive Director/Chief Appraiser General Information:

Dinah L. Kilgore, R.P.A. (915) 780-2131
Location: Email us: admin@epcad.org
5801 Trowbridge Dr. Webmaster: webmaster@epcad.org
El Paso, TX 79925
f: (915) 780-2000 2017 - El Paso Central Appraisal District
f; (915) 780-2130

I of 1 2/28/2017
El Paso Central Appraisal District - Index http://www.epcad.org/Search/Advanced?OwnerName=EL+CEN

Property Search

Year
2016 ~]

EL CENTRO REAL ESTATE INVESTMENTS LLC

Advanced Search

Found 3 results (1.46 seconds)

261877 C05099911906100 Name: Appraised Value:

EL CENTRO REAL ESTATE INVESTMENTS LLC Address: $390,347.00
608 S SANTA FE ST EL PASO, TX Details

210308 X57900030301210 Name: Appraised Value:

EL CENTRO REAL ESTATE INVESTMENTS LLC Address: $42,500.00
Details

355690 C05099911909100 Name: Appraised Value:

EL CENTRO REAL ESTATE INVESTMENTS LLC Address: $364,070.00
630 S SANTA FE ST EL PASO, TX Details

No more results ...

First << [2J >> Last

Executtve Director/Chief Appraiser General Information:

Dinah L. Kilgore, RP.A. (915) 780-2131
Location: Email us: admin@epcad.org
5801 Trowbridge Dr. Webmaster: webmaster@epcad.org
El Paso, TX 79925
f. (915) 780-2000 2017 - El Paso Central Appraisal District
f.. (915) 780-2130

I of I 2/28/2017
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 MOUNCE, GREEN, MYERS,
SAFI, PAXSON & GALATZAN
A PROFESSIONAL CORPORATION
'ATTORNEYS AND COUNSELORS AT LAW

S. ANnlONY SAFI MONICA L PEREZ*

H. KEl1ll MYERS SHANNON C. RHOADS TELEPHONE: (91S) S32-2000
CARL H. GREEN BRADLEY H. BARTI.ETr
JOHN S. BJRKELBACH GARRETT l. YANCEY MAil..JNG ADDRESS:
KURT 0. PAXSON P.O. BOX 1977
NORMAN l. GORDON WILLIAM l. MOUNCE EL PASO, TEXAS 79999-1977
MARKO.DORE ARTHUR R. PIACENTI
CLYDE A. PINE, JR. RENE CARLO BENAVIDES
BRUCE A. KOEHLER OF COUNSEL
STREET ADDRESS:
DARRYL S. VEREEN 100 N. STANTON, SUITE 1000
ANDRES E. ALMANZAN EL PASO, TEXAS 79901-1463
LAURA ENRIQUEZ MORRIS A. GALATZAN
RAMON BENAVIDES 111 (1911-1999)
DAVID M. MIRAZO WILLIAM T. KIRK FACSIMILE: (91S) S41-1S48
MERWAN N. BHAm (l'U0-2002)
WEBSITE: WWW.MGMSG.COM
ALSO MEMBER OF NEW MEXICO BAR

..... ~ .......,
February 28, 2017 C:.~'J

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Ms. Sylvia Borunda Firth l).')
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Office of the City Attorney
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RE: Ethics Complaint Filed by David C. Stout against Tanny Berg.

Dear Ms. Firth,

I am writing to you on behalf of our client Tanny Berg regarding the ethics complaint filed
by David C. Stout on February 14, 2017 ("Complaint"). This will serve as Mr. Berg's response
thereto.

First, the Statement of Facts regarding the Complaint against Mr. Berg is deficient on its
face. The complained of conduct did not occur on January 23, 2015 as stated therein. Moreover,
the Complaint makes a conclusory statement that Mr. Berg "could stand to gain financially by the
improvements made to the street." The Complaint fails to state with any specificity how Mr. Berg
could stand to have a financial gain from an improved sidewalk that is not along or adjacent to any
property owned by Berg Investment Company.

Article VI of the TIRZ No. 5 Board ("Board") Bylaws, states that a member "who has a
professional or financial interest ... shall recuse himself/herself from the deliberation ... and
shall not participate in action taken on that specific matter." The specific matter presented to the
Board that is at issue was Funding to the Father Rahm Street Improvement Project. The issue was
whether to allocate funds now or wait until 2020 to complete this same project that is already
slated, for a substantially higher cost to tax payers. The specific sidewalk that would be improved
is only the Southern side of Father Rahm where the new trolley is scheduled to travel upon its
completion. 1

1 Attached hereto as Exhibit "l" is the Official Route of the El Paso Street Car project.

1279363
Ms. Sylvia Borunda Firth
February 28, 2017
Page 2 of 2

As demonstrated in the Texas Secretary of State Business Organization Inquiry attached to

the Complaint, Mr. Berg, is the registered agent for Berg Investment Company. However, contrary
to Complaint, the address for Berg Investment Company is 444 Executive Center Blvd., El Paso,
Texas 79902. This is not where the sidewalk improvement on Father Rahm would be made.
Furthermore, as demonstrated in the property records from the El Paso Central Appraisal District
attached hereto as Exhibit "2", Berg Investment Company owns property at (1) 507 Oregon Street,
El Paso, Texas; (2) 509 S. El Paso Street, El Paso, Texas; and (3) 606 El Paso Street, El Paso,
Texas. These three properties are flagged in the map attached hereto as Exhibit "3". Moreover,
Mr. Berg does not live in the vicinity of the project at issue. Therefore, Mr. Berg has no
professional or financial interest in this matter.

Mr. Berg' s decision on the project was solely based on the evidence presented to the Board
and his conversations with key city officials. Furthermore, based on his experience and
consideration of the evidence provided to the Board, Mr. Berg believed that it did not make sense
to complete the sidewalk project separately and disrupt the community again in 2020, when there
was an opportunity to save tax payers over $500,000.00 by simply using the trolley project
contractor rather than another contractor in the future.

Mr. Berg did not violate the Standards of Conduct under Section 2.92.050 of Ordinance
No. 017112 since he did not participate in a decision or action in which he had any financial
interest. Had Mr. Berg had a financial interest in the improvement project on Father Rahm, then
he would have recused himself from this matter.

For the reasons discussed above, the Complaint against Mr. Berg should be dismissed. The
required sworn affidavit from Mr. Berg is attached to this letter and incorporated by reference as
if fully set forth herein.

Should you have any questions, please feel free to contact me.
 AFFIDAVIT OF TANNY BERG

STATE OF TEXAS

COUNTY OF EL PASO

ON THIS DAY, personally appeared Tanny Berg, who being by me first duly sworn,

upon his oath deposed and stated as follows:

1. My name.is Tanny Berg. I am over the age of twenty-one (21) years and am fully

, competent to make this Affidavit. Each and every statement contained in this Affidavit is true

and correct.

2. I am Member of the Tax Increment Reinvestment Zone Number 5. As such, I have

personal knowledge of all facts herein stated.

3. I have reviewed the letter to be submitted to Ms. Sylvia Borunda Firth, City Attorney,

regarding a Complaint filed by David C. Stout on February 14, 2017, on my behalf by attorney

Kurt G. Paxson. The statements of fact made therein are true and correct to the best of my

knowledge.

Further Affiant sayeth naught.

SUBSCRIBED T

certify which witness my hand and seal. I

\

SYLVIA V PEDRAYES
My Notary ID# 126456538
Expires March 21, 2020
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 EI Paso Central Appraisal District - Index

Property Search

Year
~~~1~ [:]

berg investment company

Advanced Search

Found 3 results (1. 75 seconds)

265761 C05099911802100 Name:

BERG INVESTMENT CO INC Address:
507 S OREGON ST EL PASO, TX

29116 co5099911ao1300 - Name:

BERG INVESTMENT CO Address:
509 S OREGON ST EL PASO, TX

373864 C05099911805300 Name:

BERG INVESTMENT CO Address:
606 S EL PASO ST EL PASO, TX

No more results for 11 berg investment company 11

First << 8 >> Last

Executive Director/Chief Appraiser General Information:

Dinah L. Kilgore, R.PA (915) 780-2131
Location: Email us: admin@epcad.org
5801 Trowbridge Or. Webmaster: webmaster@epcad.org
El Paso, TX 79925
~ (915) 780-2000 2017 - El Paso Central Appraisal District
_f_;_ (915) 780-2130
EXHIBIT

I 2.
http://www.epcad.org/Search?Keywords=berg+investment+company&Year=2016
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Krystal Jeans
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Blue Seal Bakery

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Rudy's Shack
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Mr Dollar Finance
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Map data 2017 Google 100 ft ..__ _ __.

EXHIBIT

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