Saturday, January 19, 2019

City Council to Consider Benedetti Machine Buyback Provision

The City failed to execute its vision of resurfacing San Angelo's rapidly deteriorating roads with an internal crew.  City Council will entertain returning the Hot in Place Asphalt Recycler (HIPAR) machine at its January 22nd meeting.

Council approved spending $1.2 million to buy the equipment and later approved higher pay for the crew operating the Benedetti Phoenix. 

The staff memo stated:

After 18 months of utilizing the HIPAR process on various roadways throughout San Angelo, Staff has concluded that the operation does not meet an acceptable rate of efficiency on San Angelo's roadways.
City documents indicate city crews operated the machine a mere four months for the period October 20217 to October 2018.  The city had the equipment for 18 months but did not operate it for most of that period.

The city projected resurfacing 60,000 square yards with the equipment.  It did but a fraction of that.

The vendor expressed his desire for the City of San Angelo to be a model for his company's road resurfacing equipment and is likely disappointed to learn of the city's plan to exercise the buyback provision.

As for the "acceptable rate of efficiency" how much of the responsibility belongs with the equipment and how much to the operating crew?  That can be difficult to discern.

The city's position will be heard at Council.  The agenda had a letter from Assistant Operations Director Patrick Frerich and indicates Operations Director Shane Kelton will make the presentation.  There are no slides from Kelton in the background packet.

Will any Council members inquire as to how the city performed relative to its original cost projections?  The projected costs can be seen in staff's slide.  What were the actual costs?    

Also, the vendor might have something to say about the situation and how things progressed to the city's exercising the buyback provision.  This information may be useful as Council considers alternatives for addressing street disasters in our community.

The City of Fredericksburg, Texas prides itself on having zero potholes and they reconstruct minor streets with internal crews.  Their Public Works Director was once our City Engineer.  Council may want to cast a wider net for advice in dealing with our crumbling street infrastructure.

Sunday, January 13, 2019

Water Department to Use New Collection Agency

City Council approved a new collection agency for past due water, sewer and trash service bills on 1-8-19.  Online Collection Services from Winterville, North Carolina is the new collection vendor.

Three years ago City Council approved use of a collection agency to collect past due water bills.  An RFP document provided background information:

The City of San Angelo Water Utility Department is soliciting RFPs for debt collection services for unpaid water, waste water, trash and storm water past due bills. This service is currently being provided through an amended legal services contract that was originally awarded through municipal court to collect on traffic violations. The original contract because it falls under legal services did not go through any formal RFP process. 
City staff was unable to answer the following questions from Council:

1.  What percentage of the uncollected amounts are commercial vs. residential?  "I don't that particular number."
2.  How many accounts does this represent?    "I don't have that number exactly....18,000 sticks in my to mind."
3.  In the last three years how much money did the first company collect?  "I'd have to go back and look at documents on that.  I have seen that but I don't recall."
4.  How long is the contract for?  "They are basically going to be one year terms, the first term may be two years."

Staff highlighted the new firm's capabilities vs. the current vendor:

"This company does have some fairly aggressive means in that they actually do credit bureau reporting, which is something we have not had the opportunity to do in the past."

"We have been not able to do the credit bureau reporting."
Flashback to January 2016 and the justification memo written by then Assistant Water Utilties Director Alison Strube:
The 1-5-2016 memo states:
The proposed amendment will modify City Ordinance to allow the utility to turn over delinquent accounts to a third party collection agency and place the burden of the collection fee (20% of unpaid balance) on the collection account instead of the Water Utilities department. The collection agency will also be reporting these owed monies to the credit reporting agencies (i.e. Equifax, etc.)
The City's purchasing department provided additional information to potential bidders via an addendum:

The document included a lengthy narrative to answer a number of vendor questions.  It stated:
In recent fact finding inquiries with other entities the City Water Utility department feels it may be able to get a collection service company that could provide a better return rate while at the same time receiving a higher success/recovery rate percentage

The current amount of outstanding debt being carried by the City Water Utility Department is approximately 3.6 million dollars and held under 12,700 accounts extending back to 2009 and possibly earlier. Although the collection agency does not have to be located in Texas or in San Angelo established municipal utility experience with collection in the state of Texas is paramount. Prior to placing accounts in collection the Utility makes several attempts over a 60 day period to notify account holders by phone, email, US mail and door tags. 

Selected candidates will be given a percentage of both new and existing accounts for collecting. The Utility would expect collection service providers to at a minimum provide monthly updates including accounts that have been collected, dollar values, and accounts that have been reported / filed with credit bureaus.
Only Councilwoman Lucy Gonzales served in January 2016 when the first collection agency was approved.  She did her part by asking good questions. City staff need to step up their game by preparing and providing good answers.

Thursday, December 27, 2018

Water Fund Balance at FY End Reaches $10.3 Million

The City's Water Enterprise Fund performed $4.6 million over expectations by selling $2.33 million more water than budgeted and spending $2.28 million less than expected.  City Council heard this information in early December.  Not one Council member asked about the Water Enterprise fund balance which has a target of 75 days revenue. 

As of September 30, 2018 the City held over $10.3 million in the Water Enterprise Fund.  That's over 135 days of budgeted revenue sitting in city coffers.  City leaders believe this excess capital is necessary for future water plant upgrades and its plans to re-purpose the city's wastewater for public consumption.

It rained millions more dollars into city coffers while area rains blessed local lakes.  Twin Buttes Reservoir currently holds over 120,000 acre feet and is up over 35 feet.  Tom Green County farmers have rights to 25,000 acre feet per year as long as Twin Buttes holds at least 50,000 acre feet of water. 

Those farmers were happy with the City's arrangement of providing treated wastewater for irrigation in lieu of drawing water from Twin Buttes.  That sentiment changed when the City pursued using treated effluent for potable water. 

For decades the city's stance on its abysmal maintenance of Twin Buttes was "it has no water."  That clearly has changed.  

The city has lots of water to sell.  So far City Council has been silent on most of these developments.  What might the New Year bring in the way of public discussion?  For a dammed lake there are lots of swirling undercurrents.

Sunday, December 16, 2018

Solid Waste Fund Balance Rises to $4.37 Million

San Angelo's City Council authorized City Manager Daniel Valenzuela to amend the solid waste contract with Republic Service allowing a reduction in acceptable recycling materials.  Republic committed to the following recyclables at City Council in March 2015.

Council reduced this list to:

This is the second change in the contract for Republic Services.  The first removed recycling collection from weekly to every other week and increased bulk collection from quarterly to the week opposite recycling.  The second reduces the kind of material allowed.

The City did not remove the recycling penalty charge of 50 cents of a month when it reduced the frequency of recycling and has been silent on this fee as the types of recycling are reduced.

The Finance Department updated Council on the Solid Waste Department's fiscal year close.  Solid Waste made a nearly $900,000 profit.

Finance Director Tina Dierschke failed to mention the Solid Waste Fund Balance of nearly $4.4 million at the end of the fiscal year.  It turns out trash is highly profitable for Republic and the City of San Angelo.

Update 12-21-18:  The Standard Times ran the city's position on the recycling change.  The 50 cent recycling charge remains in place according to the story. 

Tuesday, December 11, 2018

City Removes Financial Report Documents from Website

The City's Finance Department received recognition at City Council for Excellence in Financial Reporting on 12-11-18.  The proclamation stated the award:

"demonstrates “a constructive spirit of full disclosure to clearly communicate its financial story.”

Our citizens want assurances their city government manages their tax dollars with the utmost efficiency, effectiveness and transparency. Earning this honor five years in a row gives the public a high level of assurance that is indeed the case.  Interested taxpayers are invited and encouraged to go to the City’s website to  read our award-winning audit report.

Oddly, the week before this recognition the Finance Department removed monthly financial report documents from its website.  The City no longer has any 2018 or 2017 Bluebook documents available for the public to access.

Older documents from 2015-2016 remain accessible to the public.  I wrote Mayor Brenda Gunter and blind copied every member of City Council.  Not one council person responded after being informed of this move away from openness and transparency.

The documents remain inaccessible on the city's website.

While not on the city's website the 2018 Bluebook accounting documents are available here. (added to this post on 12-26-18)

Saturday, December 08, 2018

City Seeks Bids for 2019 Street Sealcoating

The City set a December 11, 2018 deadline for contractors to submit bids for 2019 street sealcoating.  The only bidder to attend the pre-bid conference was CSA Materials, a division of ReeceAlbert.  The city provided contractors a map of the targeted streets, which can be seen above.

September and October rains took their toll on city streets.  Many San Angelo city streets are beyond rehabilitation via sealcoating due to base failure.  Public Works staff told former City Councilman Marty Self the city would not throw money away sealcoating streets that needed greater restoration work.  If Mr. Self drove through the targeted neighborhoods what would he find? 

Saturday, December 01, 2018

Benedetti Phoenix Buyback Date Looms

City Manager Daniel Valenzuela provided information on the city's road repair portfolio in his 2017 State of the City address.  Valenzuela highlighted the city's Benedetti Phoenix which enables city crews to rehabilitate certain San Angelo streets.  :

Asphalt Recycler Picks up Steam: Once proficient on the operation of the new recycling machinery, the crews will move to N. Chadbourne from 29th Street to 43rd Street. Chadbourne Street from Loop 306 to 29th will be reconstructed in 2018-2019 and the asphalt recycler will extend the pleasurable driving experience to 43rd Street. From there, the City will systematically work its way across town with a focus on the roadways identified as needing mill-and-overlay in the 2015 street assessment.
A related e-mail from Assistant Operations Director Patrick Freyrich stated:

Asphalt Recycling: The new Benedetti Phoenix asphalt recycler that Council approved in November 2016 arrived in San Angelo in July 2017 and City crews began the training process on Rio Concho Drive shortly thereafter. Through research and discussions with engineers and users across multiple countries, asphalt recycling provides an option to improve the condition of our street surfaces as well as provide a smoother, more pleasant drive for the traveling public. At just a fraction of the per-square-yard cost of the alternative mill-and-overly or reconstruction options, asphalt recycling could allow the City to improve roadways that may not have been repaired beyond seal coating every eight years. Our crews have been working hard learning the proper operation and techniques that meet our expectations. The learning curve has been greater than anticipated, but we are being meticulous about ensuring we get a great final product and still expect the asphalt recycling project to meet our expectations. In addition to saving bond money that can be reassigned to other reconstruction projects, this process is expected to provide a better ride for travelers and a roadway that is protected from further deterioration.
In the first week of operation city staff experienced at least one fireball and two members of the HIPAR crew quit.  City documents reported:

Our first accident happened on Day 3. As the crew was performing the end-of-day cleaning, diesel was sprayed on the plant that was still too hot from the day’s operation and ignition occurred. The fireball engulfed an employee that was cleaning the screed augers, but thankfully no serious injuries occurred.

At the beginning of Day 5, two of the original crew (screed operator and hand operator) opted to leave the HIPAR crew. The reason given by both was due to the amount of smoke from the operation. 
We had substantial flame-ups that came from, it was later discovered, our end-of-day shutdown procedures. Apparently, at the end of the day, diesel was liberally sprayed on the Recycler components to rid them of asphalt. This resulted in a lot of diesel running onto the roadway and soaking in. As such, when the Preheater and Recycler crossed those areas the residual diesel ignited and flames engulfed the machines. The hand crew worked hard to cover the enflamed areas with sand, but it was a losing battle. The end-of-day cleaning changed from using diesel as a cutting agent to scraping the bulk of the asphalt off by hand and lightly misting the augers, mill, and plant with diesel to break down any remaining asphalt.
During Spring 2018 budget sessions City Council discussed staffing issues with the Benedetti Phoenix and implemented pay changes intended to retain trained staff.  The city took another crack at utilizing the equipment. Crews worked on Era Street from May-July.

City documents show their specialized street crew used the Benedetti Phoenix only four of the last thirteen months.  Statistics indicate the city did only 0.6 lane miles far less than projected breakeven amount.

The manufacturer expressed their desire for San Angelo to be a showcase site for the impact of their equipment.  Certainly the need is here given the city's poor track record in street maintenance.  Citizens feel decades of under investment every time we get behind the wheel.

City Council will undertake whether to keep the asphalt recycling equipment or ask the manufacturer to buy it back.  That decision needs to be made in December 2018.

The public deserves to hear from responsible parties City Manager Daniel Valenzuela and Executive Director of Public Works Ricky Dickson on this item.

Update 1-13-19:  City staff plan to provide Council an update on the Benedetti machine.  They made this commitment at the 1-8-19 City Council meeting.

Update 1-19-19:  Staff recommends City Council exercise the buyback provision in their upcoming meeting.