COMMENTARY: John J. “J.J.” Murphy can no longer say he’s the Hobbs city manager, but as “Special Consultant to the Mayor/City Commission” he still collects paychecks and benefits as if he were.
What could be better? In a city whose slogan is “It All Happens Here,” and after Murphy’s five-year tenure that wrought regular controversy and even national media shame, one would think that Hobbs City Hall shenanigans would no longer shock us. But when the city commission settled out with J.J. last year, Murphy was promised extended employment with the city not to expire before June 2018 – and at that time he becomes fully vested in the state’s retirement system.
Courtesy photo
Nick Maxwell
Last spring, the State Auditor’s Office launched its third investigation into alleged conflicts of interest involving the leadership at Hobbs City Hall. Then-State Auditor Tim Keller opined, “perhaps the citizens of Hobbs could be better served with new leadership.” And four months later, perhaps the Hobbs City Commission heard that advice, because on Aug. 23, 2017, Murphy’s tenure as city manager of Hobbs had come to an end.
Murphy had served out his five-year, thrice-amended contract, yet the golden handcuffs on the city would not be coming off with the end of his tenure. His contract’s severance provision entitled Murphy to a year’s worth of his salary as well as a bevy of benefits beyond belief that were outlined by fellow Hobbsan Jeanie Coates on NMPolitics.net in mid-2015.
For all the self-inflicted controversies that plagued Murphy’s five years as city manager, the price tag on his severance seemed well worth the benefit to just make a clean break with Murphy and move on. Residents like Coates and Byron Marshall publicly called on commissioners to let the contract lapse and to pay out the one-year severance provided in his contract (It’s time to end city manager’s tenure in Hobbs; It’s time to let the Hobbs city manager go).
Instead of severing Murphy’s ties to Hobbs city government, the commissioners approved a settlement agreement that extended Murphy’s employment and gave him a new job title. Was it not possible to employ him as an independent consultant through the competitive procurement process? Why did commissioners insist on keeping Murphy on the payroll as a special-case employee of the city until June 2018?
Murphy seemed shamelessly emboldened with each contract amendment as city manager during his five years — and, before his exit, he effortlessly secured the city’s promise that he couldn’t be terminated during his employment as a special consultant, unless he is convicted of a felony. The settlement, titled “Employment Transition And Settlement Agreement,” reads, “[b]eginning on August 24, 2017 and continuing until June 30, 2018, his employment shall continue … [and] his service cannot be terminated as a Special Consultant to the Mayor/City Commission … [except] because of a conviction of a felony” (Sections 8c and 8a, Page 4).
Who could argue with perks like “cannot be terminated?” Murphy received a much better deal as a special consultant than he ever did as the city’s top executive.
“In exchange for the releases, promises and obligations provided” in the settlement, Murphy received a lump sum of $60,000 (a signing bonus), as well as “[a] lump sum payment of all accrued PTO and military leave balances” (Section 12a, Page 7). After taxes, Murphy’s net payment was $55,753.01, and the check was printed on Murphy’s last day as city manager, Aug. 23.
In addition to Murphy’s big payday on his way out of the city manager’s office, the City of Hobbs directly paid Murphy’s privately-hired contract negotiating attorney, Las Cruces firm Almanzar and Youngers P.A., a lump sum of $33,000, along with more than $7,000 in reimbursable legal fees as part of the settlement. See the checks and Murphy’s personal legal bills.
Along with being paid “$183,976.00 in total wages for his services as Special Consultant from August 24, 2017 through June 30, 2018,” the City of Hobbs continues to pay out on the employee benefit of contributions of nearly $900 per pay period to the Public Employee Retirement Association (PERA) for Murphy’s retirement, in accordance with section 8f of his settlement and as evidenced by checks obtained through a public records request.
Although August 2017 marked the five-year anniversary and conclusion of Murphy’s contract as city manager, it’s June 2018 that marks the five-year anniversary of Murphy’s PERA enrollment, according to his application form. Whereas the City of Hobbs could have contracted with him as an independent consultant, by granting Murphy inseparable employment as an employee of the city, the commission generously guaranteed him to reach his five-year vesting mark in PERA.
When Murphy’s term as a special consultant reaches its end, he’ll be guaranteed a pension benefit in retirement after he meets age requirements, according to PERA’s handbook.
Additionally, the city’s failed October 2016 attempt to transition Murphy to a special consultant position through June 2018 (Hobbs commissioners reject severance agreement with city manager) seems to back up the notion that Murphy’s June 2018 end date has everything to do with aligning with and enabling his PERA vesting, rather than aligning his employment with the fiscal year, which ends June 30. Where else in New Mexico does a single municipal employee enjoy this kind of favored treatment?
Murphy’s previous contract promised a severance payout that included one year of his salary of more than $180,000, his $750-per-month vehicle allowance, insurance coverage and “any other available benefits” (Section 10b Page 5). In real dollars, it seemed that the City of Hobbs saved very little with the settlement, which then begs the question of what leverage Murphy could have had to bring the City of Hobbs to the negotiating table.
Topping the list of “releases, promises and obligations” that may be most valuable to the City of Hobbs is the “Mutual Release of Claims,” wherein Murphy agreed not to sue the city for “any and all actions … which might have been alleged to have arisen out of or relating to his employment with the City of Hobbs and/or any other occurrence up to the date of this Agreement” (Section 11a, Page 6).
Likewise, the City of Hobbs released “Murphy from any and all actions, causes of actions, claims or liabilities of any kind whatsoever … to have arisen out of or relating to his employment with the City of Hobbs and/or any other occurrence up to the date of this Agreement” (Section 11b, Pages 6 and 7). Coincidentally, the release is not an admission of liability or fault, the settlement clarifies.
With more than a hunch to go on, the Hobbs City Commission may have concluded that, without Murphy’s pledge in writing not to sue, the likelihood of litigation was too great. Before coming to New Mexico, Murphy sued a Pennsylvania town, Radnor Township, for not hiring him in 2009, citing discrimination of his ongoing military reserve duties.
The 2014 trial was very telling: Radnor Township felt Murphy had overstated his qualifications; Murphy wasn’t among the top 17 of 76 applicants, but received an interview as a favor to one of the council members; reportedly, his brother, then-Congressman Patrick Murphy, had called the city and was perceived as trying to influence the selection. Murphy lost the case (Jury finds in favor of Radnor Township in case against manager candidate) and the appeal.
Aside from dodging a lawsuit, it’s difficult to see the upside for the City of Hobbs in this settlement. It isn’t just the payout that tips the scale in Murphy’s favor. Perhaps the most valuable provision to Murphy is the “Mutual Non-Disparagement” clause, which gags the city’s “elected officials and managerial employees” from “any form of negative commentary, disparagement, derogatory activity or other similar behavior with respect to Murphy” (Section 15, Page 8).
What makes anybody this special? Murphy’s new job description offers Hobbs taxpayers little assurance as to the value of his employment. He no longer attends public meetings of the city commission, effectively removing him from the watchful public eye. What exactly are Hobbs taxpayers getting for their money? Only one sentence in the settlement describes Murphy’s new employment as a special consultant: “he will make every effort to continue to provide guidance with on-going personnel and city projects as directed by the Mayor” (Section 8b, Page 4).
The fact that Special Consultant Murphy’s direction as an employee of the city comes only from the mayor, rather than the interim city manager or a new city manager, seems inconsistent with the city’s adopted form of government. The charter of the home-rule City of Hobbs prescribes a commission-manager form of government, meaning the commission appoints one employee whose job it is to “(e)mploy, discipline and discharge employees of the City” (Section 6-2B, Page 10).
Since Murphy is an employee of the city, and since the interim city manager or a new city manager cannot discipline and discharge Murphy, it would seem Murphy’s unbreakable employment is in conflict with the city’s charter.
Further, the city’s municipal code states, “the City Manager has and retains all rights to administer the affairs of the City, either personally or through his or her subordinates” — which includes but is not limited to the right to “hire, promote, reclassify, transfer, assign, lay off…, recall…, reprimand, suspend, demote, discharge, or otherwise discipline employees” in addition to other managerial and administrative duties (Section 2.56.050, Page 80). Since the interim city manager or a new city manager cannot generally manage Murphy, the settlement appears to be in conflict with the city’s municipal code, as well.
Worth noting is that despite officially relinquishing his manager duties and getting a new position title as “Special Consultant to the Mayor/City Commission,” Murphy maintains online that he is the city manager. Entries on his website and on other online profiles, dated after his last day as the city manager, begin with “JJ Murphy is the City Manager of the City of Hobbs.”
Hobbs taxpayers and residents of other home-rule local governments need to weigh in on these two questions:
- Can the commission of a home-rule municipality under a commission-manager form of government appoint an employee who is only directed by the mayor, rather than the city manager or an interim city manager, especially when not explicitly authorized by the municipality’s charter or code of ordinances?
- If a home-rule municipality does not prescribe authority to the commission to appoint an employee other than the city manager or an interim city manager without prior and explicit authority from either its charter or code, is doing otherwise committing governmental fraud, waste and abuse?
I believe this settlement deserves the swift attention of the state’s top lawman, Attorney General Hector Balderas, whose “record of strengthening accountability in state and local government agencies” is needed now more than ever. The settlement is part of a wider pattern of crony behavior that has been impugned by the former state auditor — from reporting the appearance that contracts awarded by the city manager “may not have been at arm’s length” to finding that Mayor Sam D. Cobb had “participated in employment matters involving Mr. Murphy while also serving as the Vice President and board member of a business holding a ($60,000) loan with Mr. Murphy,” yet never disclosing his financial interest in public meetings.
Murphy’s numerous attempts to land a city manager job in other states have been unsuccessful over the last few years. Currently, I believe Murphy can bank on a majority vote to bring him back to City Hall, if he chooses to apply when the search for a permanent city manager begins. Recent moves by city commissioners suggest attempts have been made to narrow the minimum qualifications of the next city manager to match those of Murphy. J.J.’s chances for reappointment could flip if two incumbent city commissioners who have supported his contracts in the past, Don Gerth and Cynthia Calderon, fall to their respective challengers in the March 6 municipal election. At least one commission candidate has unequivocally stated he will not support hiring Murphy back as city manager.
Hobbsans have already settled with Murphy. The Hobbs City Commission must broaden the minimum qualifications for the next city manager and reject any more contracts and “special” favors for Murphy. It is time to move on.
Nick Maxwell is a technology consultant, writer and analyst. Maxwell advocates for government transparency and operates the watchdog website wethefourth.org. Agree with his opinion? Disagree? NMPolitics.net welcomes your views. Learn about submitting your own commentary here.