A Brighton councilwoman wants answers as to how the city paid an economic development expert with a checkered financial history nearly $150,000 without elected leaders ever vetting or approving his salary.
Councilwoman Lynn Baca said city contracts for real estate developer David Fitzgerald that amounted to $144,694 over a 13-month period should have come before the council because Brighton’s code stipulates that contracts above $50,000 get council approval.
“Something should have triggered the $50,000 (threshold),” she said. “It should have been presented to the City Council.”
Baca plans to raise the issue at a study session Tuesday, noting that the hiring of Fitzgerald by city manager Manuel Esquibel without notifying council constituted a “breach of policy.”
Particularly egregious, she said, was the city manager’s decision to bypass the City Council and bring on board a man who, as a municipal-bond underwriter in California in the 1990s, was charged with fraud by the Securities and Exchange Commission.
Regulators accused Fitzgerald and his company, Pacific Genesis Group, of misrepresenting to investors the value of land underpinning a $70 million bond offering for a housing project near San Bernardino. Fitzgerald agreed to pay a $300,000 fine in the case and surrender his securities dealer license.
Baca said she learned about Fitzgerald’s history after he had already been on the city payroll for half a year. The revelation prompted a probe of Fitzgerald’s background by a third-party firm hired by the city.
“The hiring policy is in place not to hinder development — the policy is in place to be accountable to the citizens of Brighton,” Baca said.
Esquibel defended his hiring of Fitzgerald, who was tasked with attracting private sector dollars to vacant or troubled parcels in need of redevelopment in the city.
Fitzgerald’s compensation was split, with $84,695 coming from city coffers and $60,000 from the Brighton Urban Renewal Authority. Fitzgerald, 54, started with the city in September 2014 and resigned last month.
Esquibel said Fitzgerald’s pay didn’t warrant council notification because it stretched over two fiscal years — 2014 and 2015 — neither of which exceeded the $50,000 trigger.
BURA chairman Richard Gonzales said in an e-mail that his agency’s board wasn’t required to approve Fitzgerald’s contract because it was “under the purview of staff to execute.”
Esquibel, who has been city manager for six years, said he wasn’t aware of Fitzgerald’s trouble with the SEC when he first hired him. The two men met in the 1990s in California, where Esquibel was a city manager in Selma. He described Fitzgerald as a “professional acquaintance.”
Fitzgerald wasn’t doing the kind of work in Brighton that he got in trouble for 15 years ago, Esquibel said. At no time, he said, was taxpayer money at risk.
“Here, he had no relationship to money or financing,” Esquibel said. “He couldn’t do anything without getting our approval. What we asked him to do, what we charged him to do, he performed well.”
That included generating private sector development interest in several redevelopment sites throughout the city, led by his engineering this past spring of the sale to BURA of a 3-acre parcel at the corner of Bromley Lane and South Main Street that had sat as a vacant car lot for years.
The city envisions a hotel and convention center at the site, which would serve as a gateway to Brighton. The city is — its population grew by 56 percent from 2000 to 2010, according to the U.S. Census. There are now 36,000 people living in the north Denver suburb.
“There are five or six projects that are moving forward that for 10 years were going nowhere,” Fitzgerald said during a phone interview from his Florida home last week. “I found the property, I found the developers.”
He disputes the facts of the case against him in California, calling the settlement he agreed to the result of a “bad ruling” in court. He said he didn’t have the funds to defend himself further at trial.
Even so, Fitzgerald acknowledges that his legal troubles weren’t “the highlight of my career.”
He resigned last month, he said, because his work in Brighton was largely completed. He also wrote to Esquibel in an e-mail dated Nov. 11 that “the time has come for me to stop being the topic of conversation.”
Baca doesn’t buy Esquibel’s contention that Fitzgerald’s pay was beyond council scrutiny simply because it straddled two fiscal years. She said the spirit of the city charter takes into account the “full scope” of an employee’s contract, not the way it’s sliced up on the books.
“The city manager had an obligation to notify the elected body,” she said. “Was the procedure followed?”
The Denver Post tried to reach several of Baca’s council colleagues for comment, including several attempts to get a response from Mayor Richard McLean. Only Councilman Mark Humbert responded.
He said the council “left it up to the city manager to decide what to do” with Fitzgerald once the background report had been ordered.
A mistake from 15 or so years ago shouldn’t keep a person from getting a second chance, he said.
“Everybody screws up,” Humbert said. “At some point, if you get it far enough in your past and don’t do it again, you learn from your mistakes.”
John Aguilar: 303-954-1695, jaguilar@denverpost.com or @abuvthefold
