Goliad mayor says Advocate report 'hurt' (video)

Goliad mayor Jay Harvey at a July 2, 2013 city council meeting.
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Goliad Reacts

An extensive Victoria Advocate investigation revealed a program started to promote economic development has instead been riddled with poor record-keeping, questionable loan practices, missing documents and virtually no accountability. The Texas Rangers are investigating the program.

GOLIAD - Questions about wrongdoing on behalf of economic development leaders raised concerns Tuesday night at the Goliad City Council meeting.

Nearly 50 concerned residents packed the Julie Wimberly Building at the Goliad County Fairgrounds to hear city officials address a six-month-long Victoria Advocate investigation about management problems with the Municipal Development District.

The meeting was moved from city hall because of the large crowd.

"We've all taken oaths that if we knew of any wrongdoing or any illegal activity, that we would report that," said Mayor Jay Harvey. "I believe those oaths have been upheld."

The Texas Rangers are investigating the program.

Harvey said the staff and council welcomes it.

"We think it will exonerate us," he said.

Several residents at the meeting said the investigation is warranted.

Raymond Starr, a Goliad resident who attended the Tuesday meeting, said the news reports "raised some issues, which the community needs to address."

Starr, 76, hopes the investigation will make "a real contribution to bringing quality government to Goliad."

Harvey said it "hurts to see this article come out."

"The city has tried to help businesses in our community," Harvey said. "Every business is not going to make it. Businesses fail. This isn't the only place that happens."

In 2008 and 2009, the council and development district board approved two interest-free loans totaling $25,600 to former Councilwoman Vicki Rubio for a family video rental store.

The business has since closed.

"The video store was doing pretty well until we had some Redboxes come in," Harvey said.

Councilwoman Liz Holsey said the news reports shined a light on the city's deficiencies and problems, for which the city "should be thankful."

"There were a lot of problems that would have never come out," she said.

Meanwhile, Councilman Lionel Garcia told the council Tuesday he would continue paying his original payment agreement, despite having asked the development district board Monday night to lower the payment to $400 from $549.

Finance Administrator Brenda Moses said the loan would take 43 months to pay off at $549 a month.

Garcia recused himself from that portion of the meeting, and Holsey asked that Councilman Alfred Perez also recuse himself because of a conflict of interest.

Perez and Garcia are brothers-in-law.

City Attorney Terry Baiamonte was unable to determine whether there was a conflict.

"It's not like buying a dress," she said. "I haven't had an opportunity to really study this. ... I guess we should table this item."

The council decided to take "no action" on the item, which left Garcia's loan payment at $549, as he requested.

He is behind on his 2009 loan payments for his business, WL Laundry.

While that loan has created one job - the councilman's - the development district denied a loan in 2011 to benefit youth sports.

Jimmy Garcia, 44, spoke on behalf of the Goliad County Little League Association at Tuesday's council meeting.

Garcia, who is not related to the councilman by the same name, said he requested a loan to reconstruct a nearly 50-year-old youth baseball field.

While his was denied, the board approved $25,000 in funding to Angels RV Park. This was the second loan from the development district, which brought the total loan amount to $66,320.

The park was later forgiven of a $20,660 debt.

The council and board gave Antlers Inn $50,000 that same year.

The Little League representative said the "icing on the cake" was when he approached the RV park about a $350 sponsorship.

"I was told Angels couldn't afford the sponsorship fee," he said.

"Little League generates so much revenue during the season ... we give back to the community," he said. "If Goliad would look and see where we fall behind on quality of life, it's for our youth."

In a prepared statement, City Administrator Larry Zermeno said during the meeting the development district board has revised its guidelines "and has in fact decided to not make additional loans or grants until it is certain that all processes and procedures are sound."

Zermeno refused to comment on the prepared statement he read Tuesday.

"I don't want to discuss it," he said.

Read more on our ongoing investigation below:

Continue Reading: New Goliad development district board member wants to see jobs created