Testimony at the Terry Jones appeal hearing portrayed Denton Municipal Electric as a workplace flawed by cronyism and deception, where people can be hired if they know the boss and fired if they're not a "good fit."
Over more than nine hours of testimony Jan. 5 at City Hall, Jones and other witnesses detailed questionable activities at the city-run electric utility, including allegations that the second-highest-ranking DME official filed a false compliance report with regulators and withheld information to avoid additional oversight.
Many of the allegations involved Jeff Morris, who retired in November as DME's operations division manager, where he was second in command to General Manager Phil Williams, Morris' relative by marriage. Morris, who remained on staff as a temporary employee through March 10, had been in line for a quarter-million-dollar consulting contract with the city but withdrew from consideration in December after Jones' initial allegations were made public.
The hearing included new allegations and fresh details on old controversies involving Morris, including that he had employees pour concrete at his own home, played favorites with an employee who was dating his daughter and hired his daughter's roommate for a crucial compliance-related job because she was a "good fit."
Conversely, Williams testified that he pushed Jones out of his job as operations superintendent because he wasn't a "good fit" and had failed to fully train his employees. In his own testimony, Jones said Williams acknowledged that he had no legal grounds to fire him so instead offered him money to retire, stay silent and waive any right to sue the city - an offer he refused.
DME officials would not comment on the hearing, on the advice of city attorneys, utility spokeswoman Lisa Lemons said. She referred questions to city spokesman John Cabrales, who declined to comment or make DME employees available for interviews.
"We have no further comment at this time on your questions regarding the administrative hearing," Cabrales said in an e-mail to the Denton Record-Chronicle. "However, the way you phrased some of your questions seems to indicate that some of your facts may be incorrect. Unfortunately, I cannot get into any specifics since the potential for litigation is still there." ABOUT THE HEARING
The Terry Jones hearing took place under a city policy that allows employees to appeal certain disciplinary action. The hearing included witness testimony and cross-examination, but standard rules of evidence and procedure did not apply and witnesses were not under oath. Both the city and Jones employed outside attorneys.
Testimony unfolded over more than nine hours Jan. 5 inside a conference room at Denton City Hall. The proceedings were not open to the public, but the Denton Record-Chronicle was allowed to attend at the request of Jones and his attorneys.
Jones, a five-year DME employee, has said he was targeted for threatening to report violations of federal electric reliability standards and for complaining about workplace favoritism. Records show he formally reported the compliance problems in September to the Texas Reliability Entity, or TRE, which enforces the federal standards.
Jones said regulators were "very concerned" about his complaint and planned to investigate. Susan Vincent, general counsel for TRE, said she could not confirm whether an investigation was ongoing. The agency's investigations are confidential until violations are confirmed, she said.
DME officials have denied Jones' allegations. They say he deserved to be fired for failing to train his employees, engaging in inappropriate behavior and losing his bosses' trust.
Both sides discussed their allegations in detail during the hearing, painting an unflattering picture of Jones, Morris and the workplace culture at DME.
Going live
It started with a single audit.
In 2007, DME was found in violation of a federal standard governing how electric utilities test relays and record those tests. The standard is one of many set by the North American Electric Reliability Corp. (NERC) to protect the bulk power system and prevent blackouts. Fines for violations can run up to $1 million per day.
DME was allowed to submit a mitigation plan to avoid fines, but Jones, who served as a compliance contact for the 2007 audit, testified that he continued seeing violations. By Jones' account, he fell out of favor with his bosses when he wouldn't stay quiet about it.
An issue central to the dispute is whether DME had fully complied with the mitigation plan in August 2009, when Morris, Jones' supervisor, filed a report with regulators certifying compliance of the relay testing standard.
Jones' attorneys offered a string of e-mails that indicate DME failed to launch a required software program until Oct. 16, 2009, more than a month after Morris certified compliance. Under the mitigation plan, the software program was supposed to "go live" by Jan. 2, 2008, to allow DME to schedule and record required relay testing.
Jones said he warned Morris not to sign the self-certification statement because the software program wasn't ready, but Morris signed it anyway, potentially exposing the city to major fines.
Williams, the DME general manager, testified that Morris told him they didn't need the software to comply with the mitigation plan, since workers were manually recording the required information.
In his testimony, Morris acknowledged that the software program wasn't online when he certified compliance but said he had sent an e-mail to regulators saying DME would need more time to launch it.
The Record-Chronicle requested the e-mail through an open-records request. In response, the city released a memo Morris sent to regulators in September 2007 in which he said DME had not launched the software because of "technical and hardware issues" but was recording the required testing information on spreadsheets. He added that DME was working "diligently" to get the software program online.
After seeing the memo, Jones attorney Susan Hutchison called Morris' testimony misleading. Morris had implied he sent the message to regulators around the time he certified compliance in August 2009, she said.
"He did not send an e-mail in 2009 explaining the continued noncompliance," Hutchison said in an e-mail to the Record-Chronicle. "In 2009, he certified compliance."
City officials declined to address the apparent discrepancy in Morris' testimony.
'A good fit'
The 2007 mitigation plan also involved hiring an employee to implement and oversee the software program. However, the person hired for the job, Danielle Hess, testified that she was unfamiliar with the plan's requirements and unaware she faced a deadline to launch the software.
Hess, who formerly worked in banking as a personal services representative, said she had no experience with the software, the electric industry, or state or federal regulations before DME hired her in October 2007. She said she heard about the job opening from her onetime roommate, the daughter of Jeff Morris, whom Hess directly reported to.
Morris said he was part of a committee that hired Hess but denied any favoritism. He said Hess got the job because she was "very good at computers" and would be a "good fit" at DME.
Favoritism alleged
Hess wasn't the only hire with ties to Morris' daughter.
An internal selection committee picked Jeremy Aldrich, a DME employee who was dating Morris' daughter, to be groomed as a system operator supervisor in 2008, according to testimony.
Morris said he was not involved in moving Aldrich, who is now engaged to his daughter, to the operations division, where he worked directly under Jones.
However, DME employee Jerry Looper testified that he was removed from the selection committee when he ranked another candidate above Aldrich. Looper said he did not know who removed him from the committee, which included Jones and other employees.
Morris said he took a hands-off approach to Aldrich's employment, but several DME workers testified that the relationship between the two caused a lot of talk and created a perception of special treatment.
In one instance, Jones said, he told Aldrich in July 2009 that he couldn't participate in an annual lineman's rodeo competition. Aldrich was supposed to be studying for his system operator certification exam - a test he'd already failed once - but Morris reversed Jones' decision and allowed Aldrich to compete, Jones said.
"That made me look like a fool, because I was overruled and everyone knew that," Jones said.
Aldrich failed the NERC certification test three more times before passing and at one point was paid to do nothing but study, according to testimony. Morris again denied favoritism, saying Aldrich wasn't the only system operator paid to study for the test and that he passed within the given one-year timeframe.
'Different opinions'
DME created the job of system operator during Jones' tenure to meet federal requirements as an owner and operator of high-voltage transmission equipment, according to testimony.
Operators are responsible for monitoring and controlling the city's electric system. Job duties include temporarily de-energizing transmission lines or other equipment - a task known as "switching" - so field workers can perform routine or emergency work.
Jones prepared a two-year training plan for the new system operators, but city officials say he didn't follow it. Jones was technically skilled but refused to delegate switching duties or offer adequate on-the-job training, despite repeated warnings, his bosses testified. Aldrich said Jones twice left him unattended to handle switching duties before he was fully trained.
The apparent lack of training was a serious concern, Williams testified.
"If that equipment is not operated effectively, then it could ultimately cause a cascading event that would affect the rest of the bulk power system," he said, referring to the threat of blackouts.
Jones testified that he provided training and had plans to provide more when he lost his job. He also accused Morris of pushing to promote Aldrich before Aldrich had completed the required training.
"We had different opinions on how fast he [Morris] wanted Jeremy promoted," Jones said.
Other DME employees testified there was a widespread belief that Jones was fired for refusing to promote Morris' future son-in-law.
Aldrich was finally promoted to system operator supervisor in November, after Jones' firing, although some employees testified he was inexperienced. Aldrich said system operators were put through an intense training program after Jones left and that he now felt comfortable in the job.
'Excessive' texting
According to Jones, Aldrich also seemed to get special treatment when he violated policy by using his work cellphone to send text messages to Morris' daughter while he was supposed to be monitoring the system. Cellphone records showed Aldrich sent about 40 personal text messages in one morning alone, even though city policy banned all cellphone use in the system operations center, Jones said.
Jones said he tried to document the violation in Aldrich's performance review but Williams told him to take it out and simply talk to Aldrich. Jones said he raised the issue with Aldrich, but Aldrich testified they never spoke about it.
Aldrich initially denied having a problem with cellphone use, saying it was a "matter of perspective" whether sending 40 personal text messages was a gross misuse of work time.
"As a system operator, there are times when there's nothing going on," he said. "If there was an issue or a problem and I needed to stop, all that had to be done was my supervisor [Jones] come and talk to me about it, and he never confronted me on it."
After more questioning by Jones' attorneys, Aldrich agreed that sending 40 text messages in a single shift was excessive.
Withholding information
Morris also was accused of failing to disclose information to regulators to avoid scrutiny. In a letter to his bosses last fall disputing his firing, Jones recounted a May 2009 meeting in Garland where Morris purportedly said DME was aware it owned 138-kilovolt equipment and was fortunate that regulators had not "asked the right questions" yet.
A January 2008 state audit report said DME was subject to limited federal standards because it had no transmission voltages higher than 69 kilovolts. DME would be subject to additional regulations if it owned equipment with higher voltages, according to the report.
Under questioning from Jones' attorneys, Morris said DME had owned 138-kilovolt equipment since at least 2007. Asked if he failed to disclose the information to regulators, Morris said: "I was never asked the question."
Morris blamed the lack of disclosure on "confusion" over whether certain equipment was owned by DME or the Texas Municipal Power Agency, a partnership among Denton and three other cities. He said DME disclosed the information to regulators in August 2010 after determining Denton owned some of the equipment.
Act of friendship
The hearing also featured Morris' admission that he had DME employees pour concrete for a driveway and RV stall at his Sanger home. Based on statements and records released in 2009, the Record-Chronicle reported that Morris and DME metering superintendent J.R. Richardson were suspended for allowing employees to pour concrete at Richardson's Denton home. Some of the employees had taken vacation days, but others were on lunch breaks from work and exceeded their hour break, DME officials have said.
Morris testified that he had some of the same workers - including Jones - pour concrete at his own home as well, which Morris said was a factor in his weeklong suspension without pay in 2009. Morris did not explain why the city's records of the incident failed to mention the work done at his home.
Morris said the employees had taken vacation time and were there as friends, not subordinates.
Besides pouring concrete, Jones said Morris also had him mow his lawn while Morris was away on hurricane-relief duties. Morris said Jones volunteered in every case.
"He offered to help pour concrete because he had experience in pouring concrete," Morris said, adding that he took it as an act of friendship.
City officials did not respond to questions related to the number of employees involved in the incidents, whether they were on work time and whether city materials were used.
Secret recordings
Jones was the target of other accusations during the hearing, including that he mysteriously entered locked offices, regularly mocked and belittled his co-workers and secretly recorded workplace conversations.
Hess testified that she witnessed Jones somehow open Morris' locked office door "maybe 10 to 20 times" on separate occasions, even after the lock was changed. Hess said she did not believe Jones had access to a key but that he used an unidentified object on a key ring to gain entry and stayed inside for an unspecified amount of time. He did not appear to steal anything, she said.
Jones denied the allegations and said they were lobbed only after he complained to the city's human resources department in 2009 about DME's failure to follow the mitigation plan. He said that, by policy, all communication in the dispatch center is recorded and that employees sign a statement acknowledging it.
DME officials testified they did not fully investigate or document the allegations involving Jones' behavior, and records show he was never formally disciplined for the incidents. Hutchison, Jones' attorney, sought to use the allegations to her advantage in her written closing argument, saying they were based on "hearsay and ridiculous and unsupported innuendo."
"Terry was being sent a clear message: Be quiet about the noncompliance," Hutchison wrote.
However, in a Feb. 17 letter in which he offered to rehire Jones, City Manager George Campbell said a subsequent investigation found evidence from Jones' laptop computer to show he participated in surveillance that went beyond the city's normal practice.
Hutchison said the claim was unsupported.
LOWELL BROWN can be reached at 940-566-6882. His e-mail address is lmbrown@dentonrc.com.
