City employees placed on leave in wake of DME contract investigation

Crews recently finished the foundation for the Denton Energy Center, a new natural-gas fired power plant that should be operational by summer 2018., Wednesday, July 5, 2017, in Denton, Texas, Jeff Woo/DRC

A total of four high-level Denton Municipal Electric employees were placed on administrative leave as the city investigates DME’s contracting practices.  

Mike Grim, executive manager for power legislation and regulatory affairs; Bill Bunselmeyer, regulatory and risk division manager; and Jim Maynard, energy project development manager, were all placed on leave along with former general manager Phil Williams.

Williams resigned his post last Friday. The other three men are being paid while on administrative leave, officials said. Grim’s current annual base salary is about $188,000, Bunselmeyer’s about $144,00 and Maynard’s about $102,000. Grim came to the city in 2008 from TXU. Maynard was hired in 2006. Bunselmeyer has been with the city since 1996.

Bunselmeyer, Grim and Maynard did not return calls for comment. 

The City Council received its first briefing behind closed doors 10 days ago to discuss DME employee contacts with vendors. Since the investigation began, no one has said publicly whether any state laws or city policies may have been violated.

A city department, DME provides electricity to most of Denton. Some of the electricity comes from a coal-fired power plant, but an increasing amount comes via long-term contracts with wind and solar farms. DME is in the middle of a $1.1 billion expansion and upgrade of the city's electric grid, work that has come with lucrative, multimillion-dollar contracts.

The expansion includes the Denton Energy Center, the controversial new power plant that will use natural gas-fired engines to make electricity.

Bunselmeyer, Grim and Maynard worked on contracts for the power plant project. The two primary contracts for the Denton Energy Center — one to Wärtsilä and the other to Burns & McDonnell — are estimated to be worth about $100 million each, although the exact price has never been publicly disclosed.

The city staff anticipates that the investigation should be completed in the next few weeks, according to Deputy City Manager Bryan Langley. 

“Placing the employees on administrative leave doesn’t indicate any wrongdoing on their part; it protects the integrity of the investigation,” Langley said.

In other words, the employees could return to work upon completion of the investigation. 

The staff members plan to brief the council on the investigation’s progress next week, Langley said. 

While the investigation has focused on DME employee actions when awarding contracts, another DME division may also receive a new level of scrutiny soon.

Denton City Manager Todd Hileman confirmed he has recommended Deloitte be brought in to examine how DME runs its energy trading group, including what risks the trading group may present to the city.  

Deloitte is a multinational accounting and auditing firm that helps businesses and governments assess risk. The assessment isn’t conceived as part of the contract investigation, Hileman said.

Williams, the former general manager, often told council members over the past few years that the DME’s plan for buying, selling and making electricity was to “go big or go home.”

Williams did more than recommend the massive expansion of the local electric grid. He also launched the trading group within DME to buy and sell electricity directly to the Texas grid, ostensibly to save money for ratepayers.

Texas deregulated the electric grid in 2010, creating the need for trading services. However, other city-owned utilities hire a private company to trade for them. 

Mayor Chris Watts isn’t surprised that Hileman took a hands-on approach to DME, at least for now, he said.

“DME is our largest department and one of the critical utilities of the city,” Watts said. “Its annual budget is bigger than the general fund.”  

PEGGY HEINKEL-WOLFE can be reached at 940-566-6881.

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