Residents ask Audit & Finance Committee to probe alleged $25 million mitigation payment routed to nonprofit

Holly Reed, a District 10 resident and former member of the Austin Parks and Recreation Board, told the Audit and Finance Committee on March 4 that she has submitted a citizen audit request alleging former parks director Kimberly McNeely diverted $25,000,000 in Texas Department of Transportation mitigation funds to the Trail Conservancy, McNeely’s subsequent employer. "Her decision concerning the use of this massive amount of public fund was made without consulting parks department staff or her supervisor," Reed said, and she asked the committee to support the audit.

Chris Flores, also a District 10 resident, urged the committee to postpone a boardwalk contract until that audit is completed. Flores said the payment appears to have been routed "government to private," rather than the typical government-to-government mitigation payment, and called that "highly unusual." He asked staff to clarify fiduciary responsibilities in job descriptions.

Committee members did not vote on the specific allegations. Chair called the public comments and moved the meeting to the next agenda items after the speakers finished. The clerk confirmed the audit request had been submitted to the auditor and city manager, and the public commentators asked for greater transparency and ethical accountability in partnerships between the parks department and nonprofit partners.

Why it matters: The commenters allege a multimillion-dollar diversion of mitigation funds and are requesting a formal audit to determine whether rules or codes were violated. The committee did not initiate a formal investigation at the meeting, but the audit office received a citizen audit request and staff indicated they are aware of it.

What’s next: The request is with the city auditor and the city manager, according to the public comments. Committee members did not take formal action on this agenda item during the March 4 meeting.