The Austin school district’s hire for a newly created executive position creates serious potential conflicts of interest, critics of the decision say.
In his new role, Matias Segura, the district’s new operations officer, will oversee the work of his current employer, AECOM, one of two firms that will manage $1.1 billion in construction work funded with a voter-approved bond. The firm already has received at least $7 million from the district for its work.
As AECOM’s senior project manager, Segura led a team that assessed the condition of the district’s 130 schools and other facilities and shaped the bond proposal that voters approved in November.
The district’s lawyer said there was “not a conflict of interest” in hiring Segura, in part because he is not a principal at AECOM. Segura vows to recuse himself from any decisions that could pose a potential conflict of interest.
AECOM Technical Services Inc. and McKissack & McKissack Inc. were awarded contracts in January to provide program management services over the bond projects, and the projects they will oversee already have been selected by the district, Segura said.
But critics worry that Segura, as a district official, could favor AECOM by steering contracts to the firm and approving invoices for its work in the future.
Former district Trustee Paul Saldaña said even trustees — who are unpaid, elected volunteers — are prohibited from working for the district for one year after the last day of their board service.
Segura’s hiring “at minimum creates a potential conflict of interest, given that he will essentially oversee the work of his former employer, potentially award them future scopes of work and approve their invoices for future contract payments,” said Saldaña, whose consulting firm helps small businesses owned by minorities and women compete for public contracts. “It smells badly, erodes public trust and lacks integrity.”
Frank Fuentes, chairman of the U.S. Hispanic Contractors Association, called Segura’s hire a “bad decision.”
“If it looks bad to the eye, it probably is bad,” Fuentes said. “I’m sure he’s very capable. But when you’re dealing with public monies, you have to be very careful about how you hire. If you were in charge of creating the program, and now you’re in charge not only of designing it but also awarding it, I see that as a very huge potential conflict. To me, the public should feel like they have the right person handling taxpayer money, and if it is perceived there is a conflict, then AISD has a problem. The perception will become reality.”
Others also question why Segura made presentations to the board on behalf of AECOM as recently as last week, while he was a job candidate.
Segura, 36, said the invoicing, contracting and day-to-day oversight will fall under the purview of the district’s newly hired director of construction management, not him.
“Everything I’ve done professionally has been ethical and transparent, which is why I work well in the public sector,” Segura said. “The way the contract is written and managed, it will be sure there is no perceived or real conflict as we move forward.”
In response to questions about hiring Segura, Austin school district attorney Ylise Janssen in a statement said, “He does not stand to benefit from any ongoing or future work with the company as he will have a different employer — Austin ISD. Additionally, with more than 11,000 employees, the district employs talented staff that may come from many industries, vendors and governmental agencies. These industries have had or have contracts with the district.
“As the case with any employee or Trustee, the district must have internal controls to protect the district against any improprieties for any financial/contractual transactions,” she said. “We also have an internal audit function that constantly assesses the District’s internal control processes in this area.”
$167,000 job. Just 3 candidates
No one is questioning Segura’s qualifications or ability. Born and raised in Austin, Segura, who attended Austin district schools, has made impressive presentations pertaining to bond work before the school board and the community on dozens of occasions.
As one of the engineers in the firm that recommended the sudden closure of T.A. Brown Elementary because of an unstable floor, Segura fielded media inquiries and tackled critics’ accusations that the floor was fixable and the school didn’t need to be rebuilt. He has a civil engineering degree from Texas Tech University and an MBA in finance from the University of Texas and has worked with AECOM since 2013.
At Monday night’s meeting, as trustees weighed the hiring decision, district CFO Nicole Conley Johnson lauded Segura as being “uniquely qualified” and said Segura has the kind of strategic expertise needed not only to get the bond work done, but also in the district’s work in creating affordable housing, among other things.
“All of that requires a kind of expertise and eye that we’ve highly depended upon outside real estate consultants and attorneys to help advise us along the way,” Conley Johnson told the school board. “I think we have a unique opportunity with the proposed candidate who does possess the facilities expertise but also the financing expertise, and has facilitated the kind of deals that we think we want. To have that expertise in-house is highly valuable to this district.”
The job pays $166,796 a year, and it was advertised for about four weeks by the district. But only three people applied.
Fernando Medina, the district’s head of human resources, told the board that the position is unique, requiring both a construction and finance background. Of the three candidates, only two met the requirements and competency the district was looking for, Medina said, and the district needed to act quickly.
Segura will oversee the implementation of the bond, as well as facilities, and report to Conley Johnson, and take on her responsibilities for the bond program, construction management and facilities operations, among other things.
AECOM a go-to for bond work
AECOM has a track record of successful projects in Central Texas and elsewhere. So far, AECOM has received millions in Austin district contracts to assess school facilities, help develop a facilities master plan and help create the bond package. In January, the firm was awarded another multimillion-dollar contract to serve as one of two program managers to implement the bond.
AECOM gave one of the largest single donations, $25,000, to the political action committee created to persuade voters to approve the bond referendum. Segura was among the bond supporters at an election night watch party.
Segura, whose mom has taught in the district for more than 30 years, said he believes the district’s sole mission is to educate students. “I bought into it,” said Segura, who serves as a board member of Keep Austin Beautiful and is an alum of the Leadership Austin Emerge program.
Segura said in his AECOM role, he advises clients on plans, but doesn’t necessarily get to see them through.
Now, as a district employee, “I’ll have the ability and authority to ensure they get executed efficiently and effectively,” he said. “I’m uniquely qualified to help them achieve some of the goals through this bond. I haven’t found a better alignment of my personal beliefs from the public-sector side and my professional credentials.”
Segura remains an AECOM employee until April 10. His district position starts April 16.
Despite assurances by the district’s lawyer in Segura’s hiring, Trustee Ted Gordon said his concerns kept him from voting for his hiring, and he abstained. The rest of the board voted 8-0 in favor of hiring Segura.
In an interview, Gordon said that, while it might be legal, “it certainly doesn’t look good.”
“I do think Nicole needs capable help,” Gordon said. “And I’m an admirer because he does a good job. But it seems to have a sense of impropriety and ‘insider-ism.’”
Bill Aleshire, a local government watchdog, said the hiring of Segura “raises classic revolving-door ethics concerns.”
“No matter how honest and open the operations officer may be, every decision he makes is going to be viewed with suspicion, and rightly so,” said Aleshire, an Austin attorney and former Travis County judge. “Will the operations officer favor his former employer in making contract awards? Will he go back to work for the company eventually after driving AISD business their way? An ethics cloud will follow him around, fairly or unfairly.”