Nixon terminates Rice as city manager during special called meeting

Attorney claims city violated Rice's contract for 'baseless' allegations


Nixon City Manager Harold Rice was fired from his position with cause — effective immediately — during a special called Nixon City Council meeting Monday, Dec. 4 at City Hall.

However, an attorney representing Rice, Lori Hanson of Hanson Law P.C. of Schertz, told the Inquirer Tuesday afternoon the allegations made by the city against her client are “baseless” and the city has violated her client’s contract by ending his employment without any warning.

“We believe they violated his employment contract in the way (his termination) was handled,” Hanson told the Inquirer. “We believe they violated the city employee handbook in the way it was handled and we believe they violated the Texas Open Meetings Act in the way they handled the closed session last night.”

A call was made by the Inquirer to Nixon Mayor Dorothy Riojas, who referred the matter to City Attorney Eduardo “Eddie” Escobar. An email with questions about what led to Rice’s termination has been sent to Escobar and the Inquirer is awaiting a response. Phone calls to Escobar’s office were routed to a voicemail system that disconnected before a message could be left.

Monday’s meeting

Prior to his termination, Rice met in executive session with Mayor Dorothy Riojas, City Attorney Eddie Escobar and members of the council for about 75-80 minutes, alongside his wife Loyce and Hanson.

When the meeting reconvened in open session, Alderman Melissa Pompa moved to terminate Rice as city manager “due to the negligent misapplication or misuse by the city manager of public funds under his official capacity as city manager.”

Council members neither named nor discussed what those allegations of misappropriation, misapplication or misuse of city funds were that prompted the special called meeting Monday.

Pompa’s motion included the termination was to be effective immediately, though the city would pay out health care coverage through the end of the year for Rice and his family. Alderman Patsy Vigil Scherrer seconded the motion.

Before a vote was taken, Alderman Justin La Fleur tried to get Pompa to amend her motion to offer Rice a severance package.

“People come tonight to call me what they want and say what they want about me, but it’s put us in a tough position,” La Fleur said. “And although we’d like to have solidarity here, I'd like to offer Mr. Rice a severance package if he would so accept it. I don't think that's been brought to the table, so I'm trying to bring it to the table now. I don't know if that's part of the motion we can amend to offer him a severance package outside of his healthcare.”

Escobar said Pompa would have to amend her motion if she chose to do so.

“I think plans to cover his family’s healthcare for the rest of the year — that’s a generous offering by the city,” Pompa replied. “I believe my motion stands.”

The council voted 4-1 to terminate Rice, with La Fleur as the lone dissenting vote. Pompa, Scherer, Ellie Dominguez and Maggie Gaytan all voted in favor of the termination, while Riojas only votes in the event of a tie.

Council members also voted to remove Rice as a signatory on the city’s accounts at Sun Coast Bank and to replace him with Scherrer. That vote was approved unanimously.

Pompa asked about going back into executive session to discuss an interim assignment of a city manager, but Escobar told council members they would be prudent to hold another meeting to make that decision.

“The way that the agenda item is written under number one, it does say regarding the position of City Manager/Administrator, job description of City Manager/Administrator, performance the City Manager/Administrator and existing contractual terms,” Escobar said. “It could be argued that the position of city manager would cover that issue. But I would have to say that, out of an abundance of caution, probably the best thing to do is to set that on a different agenda.”

The council took Escobar’s advice and moved to adjourn the special called meeting at that point. Rice was asked by a Nixon Police Department officer to make sure he had submitted all city property and passwords before leaving the building.

Rice, a lifelong Nixon resident, was hired as interim city manager in January 2017 and appointed full-time city manager in October 2019.

All about radios

Hanson told the Inquirer her client “has been blindsided by this whole action.”

“He was told to go home late last week and not return to his office until the meeting last night,” she said. “He was not given any warning there was any investigation or even a complaint against him. He has not been given an opportunity to respond to what that complaint was and no specific information other than it pertains to how a vendor was paid by funds the city received for the specific purpose of law enforcement radios.”

Gonzales County paid the city of Nixon $340,750.55 last fall out of American Recovery Plan Act (ARPA) funds to purchase mobile and handheld radios after the county agreed to use $1,283,295.61 of the ARPA money it received for long-needed new radios for all first responder agencies in the county.

While other entities in Gonzales County purchased their radios from Victoria Communication Systems, the area’s Motorola dealer, Nixon bought their radios from the Lower Colorado River Authority, which uses L3 Harris radios, after city leadership had been vocal about their own concerns with buying the Motorola equipment.

“The radios were delivered in the spring and paid by city check put in the mail,” Hanson told the Inquirer. “A few months later, it was discovered the vendor had never received the check and it never cleared. The error was corrected and the vendor was paid and they never complained. Now, somehow, the city council is saying they had to go ahead and spend city funds and were over budget due to other matters that came up.”

Hanson said it appears council members “at some point thought they had more money in their account than there actually was” because they did not take the reissued check to the radio vendor into consideration when making other decisions about spending city money.

“The council member on the far left (Pompa) couldn’t say how it was a misuse of funds or misapplication of funds,” Hanson told the Inquirer. “The mayor couldn’t say that the city was harmed in any way. They (the city) didn’t get any penalty or interest charged against them. Everything proceeded as normal except the vendor didn’t receive their original check and a new one had to be sent.

“Again, that’s not misapplication or misuse of city funds,” Hanson added. “That was the council misunderstanding what was left in their account.”

Hanson said during the executive session with the council, she and her client “got to ask some questions, but we did not get many good answers.”

“Because we didn’t know what it was about until the meeting, we were not in position to present any sort of defense to these baseless allegations,” she said. “From the answers we got, there is no harm that has occurred to the city that arose from this issue at all. The city paid their bills and paid this vendor and no one had any complaint. No one is saying (Rice) took any funds. In open session, they called it ‘misuse of funds,’ but the funds were used for exactly what the city was supposed to have used them for.”

Hanson also noted that no one has said anything to her about charges being referred to the county attorney’s office for theft or indicated that any money is actually missing.

She said she and Rice “are going to ask the city council to go back and reconsider their action based on the fact that they didn’t allow Mr. Rice to participate in any investigation of whatever complaint started this proceeding.”

“We are going to ask that they comply with his contract and pay the remaining term of his agreement, especially as he got no notice, no chance to defend himself and are saying he committed misuse of funds with no evidence,” Hanson said. “I intend to set out how they did my client wrong by letter and how they are not allowed to terminate him without warning, immediately, and refuse to pay him the benefits he is owed, given a total lack of foundation for these allegations.”

Rice’s current contract was approved by the council on March 7, 2023, and was for five years, meanign he still had four years and four months left on his contract at the time he was terminated. Hanson said

She noted that while La Fleur did state it was unfortunate the matter had to be brought up and indicated Rice’s dismissal would require payment of a severance package, no one else spoke up at any time in Rice’s defense, either in the closed or open session.

“We don’t know who is complaining,” she said. “If there is no victim and no one was harmed and no funds are missing, what was this about except political?”