DALLAS — Some board members of the North Texas Tollway Authority appear to have conflicts of interest involving business ties or family members, but the agency lacks clear policies regulating the conflicts, according to a consultant’s review.
“Our review did not find malfeasance or impropriety, but rather governance and operational practices that cause frustration, poor morale and distrust among stakeholders,” according to the report from Alvarez & Marsal, a consulting firm hired by the counties that appoint members of the NTTA board.
The issue of conflicts of interest goes to the heart of an acrimonious dispute over so-called legacy contractors, companies that have worked for the authority for years without having to face competitive bidding.
Among the contractors are the financial advisor RBC Capital Markets and bond counsel McCall, Parkhurst & Horton, both of which have handled billions of dollars worth of bond deals and are working on a November revenue bond issue of $622 million.
In addition to the bond-related firms, major engineering and construction companies have worked for the NTTA for years as the tollway agency built its major toll roads.
Alvarez & Marsal did not specify the conflicts, but new authority chairman Kenneth Barr, former mayor of Fort Worth, has acknowledged that his brother works for the NTTA law firm of Locke Lord, though not in an area related to tollway finance.
“NTTA will expeditiously begin a thorough review and evaluation of the recommendations and then develop a work plan with sustainable and cost-effective solutions,” Barr said in a prepared response to the report.
The conflict of interest issue was just one of several that Alvarez & Marsal were asked to consider. In other areas, the consultants noted that the process of assessing the performance of the executive director “has many gaps” and that morale among the staff is low.
The NTTA is operating under a new interim director after Allen Clemson — the third director forced to resign in five years — surrendered his post last week. Clemson had advocated opening up the bidding process for assignments given to the legacy contractors.
Clemson received a six-month severance package worth about $132,000 that included requirements that neither he nor the board criticize one another, according to the Dallas Morning News.
NTTA assistant executive director of project delivery Gerry Carrigan was named interim executive director. Carrigan is a former employee of the engineering firm HNTB, one of the legacy contractors.
“Getting him into position will help us begin to implement changes recommended by the just-completed county review,” Barr said.
Clemson said before resigning that he did not have the votes on the board to retain his job. Clemson was granted a reprieve last summer when former chairman Victor Vandergriff of Arlington postponed Clemson’s performance review.
Vandergriff this month stepped down as chairman but remains on the authority’s board.
Vandergriff, who also backed opening up the legacy contracts, was not expected to win a vote for another term as chairman.
The NTTA board last year decided to stick with the legacy contractors after a showdown over how to open up the bidding to new companies.
The consultant’s report called that process “flawed and handled poorly by both the board and staff.”
The NTTA is a political subdivision of the state of Texas for toll road construction and finance in the Dallas-Fort Worth area.
The board earlier this month agreed to issue about $622 million of debt for the Chisholm Trail Parkway, its first tollway in Fort Worth and its suburbs.