Thursday, July 24, 2014

Water Rate Structure Study RFQ

The City of San Angelo is soliciting proposals for a study on its water rate structure.  The city wishes to:

Identify and engage the most qualified consulting firm to assist the City in achieving sustainable water and water reclamation rate structures that: adequately fund:

1) operations (water, sewer, stormwater)
2) debt service (now and in the future)
3) capital improvements (West Texas Water Partnership, Reclaimed water study)
4) meet debt service ratio and bond covenant requirements (current and projected)
5) ensure that each service is operating on a self sustaining basis  (Water currently subsidizes general fund)

Expected time to project completion is 90-180 days from the date of contract approval.

Consultants have the opportunity to highlight their qualifications to conduct such an analysis.  Proposals are due in a month.  As I read the study several thoughts came to mind:

1)  The Reclaimed Water study, approved in May, may take as long as a year to complete.  How can these consultants take that study into account if it isn't finished?

2)  How will the city give guidance to consultants on future water projects, likely to be very costly?  The Hickory project was $120 million.

3)  How will the city prioritize replacement of water and sewer pipes and what is the impact of prior underspending on infrastructure maintenance and replacement?  Replacement of old iron mains in North San Angelo are projected to cost over $100 million.

4)  Will the consultants look at the city's water rights to Lake Spence and assess the cost of reestablishing a functioning pipeline?

Council waited years for staff to bring back conservation incentives.  A local committee offered free consultation on water conservation and ways to encourage citizens to continue doing their part.  I expected city staff and this committee to bring back water conservation and rate recommendations.  Instead the city may hire another consultant.

Reading between the lines, it looks like another hired gun.  The RFQ stated:

Develop strategies for implementing significant rate changes in order to reduce the adverse impact on specific customer classes.
The City raised rates in 2007 and 2011.  The average user's bill in 2010 was up 74%.  The city raised rates another 47.5% in 2011.  Another significant rate change is on the way.  Consultants will likely provide political cover. 

Friday, July 18, 2014

MedHab's Promise: Twenty Eight Jobs Short

Flashback to January 2012 when San Angelo's City Council voted to approve a $3.6 million incentive package for MedHab, a medical device maker.  The incentive was to ensure San Angelo served as MedHab's production site.

San Angelo Live ran the latest update:

MedHab CEO Johnny Ross said the main components for the product are currently manufactured in South Dakota and Rhode Island, but hopes to move some of those operations to San Angelo at some point in the future.

January 2012 had MedHab raring to go.

Donna Osborne, the city's economic development coordinator, said if it takes the deal, the company plans to start operations in San Angelo in March, creating 11 jobs in the first year and 23 the following year.
Actual performance has been more sparse, according to Ross.

So far we have created six jobs here in San Angelo.

That's 28 short from a man who advised ASU students "Don't miss your milestones."  A city official said at the January 3, 2012 meeting.  "We are confident they will hit their job creation goal." It's not even close.

FDA approval repeatedly lay just around the corner for MedHab.  It started as "later in 2012" before leaking to numerous future dates.   

San Angelo Live reported its current status:

Ross said FDA approval would open the door to sales of the product in doctor’s offices and hospitals worldwide, and he hopes to have a green-light for StepRite to launch in January of next year (2015).

San Angelo Live fulfilled a Development Corporation request for what's going on with MedHab.   This saves face for the parties involved as initial promises vs. actual performance don't need to be discussed.

Councilman Self's Stinging Defense of Johnny Silvas

One year ago City Councilman Marty Self became the focus of an ethics concern due to a local blogger, Christian Reporter News.  As a result of this experience Self felt the need to challenge a San Angelo Live story which raised concerns about fellow Councilman Johnny Silvas' playing golf with a Republic leader in close proximity to the trash/landfill decision.

Self portrayed the golf outing as a one time event where Silvas showed community leadership by attending a nonprofit fundraiser. 

Would Marty have spoken so eloquently in Silvas' defense if he knew Johnny repeatedly played golf with Republic representatives, both in town and around the state?

Councilman Silvas would have no legal-ethical concerns if he reported any golf outings and associated expenses paid for by Republic.

§ 36.10. Non-Applicable
Section 36.08 (Gift to Public Servant) does not apply to food, lodging, transportation, or entertainment accepted as a guest and, if the donee is required by law to report those items, reported by the donee in accordance with that law. 
I'll venture that no public record exists of Councilman Silvas' Republic golf outings and associated gifts.

Several council members voiced strong support for Silvas and outrage for anyone who'd run such a story.  Yet, Johnny never spoke.  He didn't say who paid for that golf outing, much less the many others Silvas has enjoyed from Republic.

Citizens can look at one golf outing and accept Johnny's silence as innocence.  Others can ask why council offered up nothing but indignation.  The facts, as it stands now, are mostly missing.  That's not unusual in San Angelo's 2014 Trash Saga.

Wednesday, July 16, 2014

Citizens Speak to City Council's Hand on Trash Situation

Councilwoman Charlotte Farmer asked where were you a year ago?  I smelled something afoot and asked questions in August 2013.

I've written plenty on this topic during this period.  Many members of the public have made their wishes known.  Council finished an obviously tainted process in the face of citizens speaking out.

Ironically, more people participated in the poll and two petitions (1,097) than voted in the SMD #1 City Council race just months ago (1,073).    

The franchisor re-upped with a franchisee that ripped off thousands of commercial customers over a decade.  City staff ran a non-documented investigation to cover for a bid process that favored the incumbent from the get go.

It leads me to believe the only answers the public may get over time will be discovery from the looming court case. 

Citizens spoke broadly, loudly and clearly.  They may need to repeat themselves come election time.

Tuesday, July 15, 2014

Health Insurance Projected to Go Up $2 million

The health insurance slide flashed briefly on the screen in City Council chambers during today's budget presentation.  The projected $2 million increase, which is a 32.5% rise, did not stay up for long.  HR's Lisa Marley needed to update Council on the city's pay competitiveness.  The city is well behind local pay scales and historically behind other cities.

In a prior budget workshop city staff recommended council pick up $750,000 of the health insurance increase (which is now $2 million).  That would have the city paying 37.5% of the increase and employees picking up 62.5%.

Health insurance bids have been in for a month.  City staff acted on trash/landfill bids within ten days of receipt.  The picture, however ugly, is likely clear.  The question is who will pay what, after receiving what size pay raise?

The size of the health insurance fund is considerably less than previously projected.  There's much less of a kitty to lessen the impact of a dramatic one year increase.

The elephant is in the room and as usual, nobody's talking.  

Monday, July 14, 2014

Council to Hear about Health Insurance

Health insurance is finally front and center in budget documents for City Council's consideration.  It made the custom spreadsheet used in Council's recent budget workshop but the meeting adjourned before they reached that point.  It was the source of a huge variance to budget in the city's last annual financial report, but auditors and CFO Michael Dane failed to point out the negative change.  I look forward to hearing the presentation and discussion, should it occur.

Sunday, July 13, 2014

Council to Dot "O" in Trash Ordinance

Everyone expects trash to stink but many San Angelo citizens don't like the smell of City Council's awarding a ten year contract to a vendor that overcharged businesses for over a decade.  A Standard Times poll found readers voting nearly nine to one against council's move.

Former City Councilman Paul Alexander believes the process needs to start over and launched a petition toward that end.

It has but days to work.  City Council will approve the trash fee ordinance this Tuesday.  It's item #8 on the Consent Agenda.

For the first time I saw what Councilman Vardeman referenced in the trash discussion when he said council members had been accused of being on the take by "a blogger."  It wasn't just a blogger, but a member of the public who served on City Council for three years.  The petition language states:

#5 Republic Services officials have in fact offered at least some council members a perk or perks. Some members have refused, but at least one member has publicly been seen with a Republic official playing golf on the same team just days before the final vote to accept the Republic contract with the City. While no member may have been asked to vote one way or another, there is an implied obligation to vote in favor of Republic when accepting perks.  It is a fact that the same council member did speak very positively in support of Republic and voted to approve the contract.  This is not ethical and we do not approve of this practice. 

I stand by my original suggestion that the new contract be put on hold, the city hire an outside firm to investigate this long term overcharge (under city leaders Will Wilde, Ricky Dickson and Shane Kelton) and share the results of that investigation with the public.  What communications occurred between these gentlemen and Trashaway-Republic on unauthorized charges?

Will Wilde's ability to act unilaterally culminated in the unauthorized purchase and installation of over $100,000 in water department furniture without required approvals.  Had he done something similar with Trashaway-Republic on unauthorized fees prior Ricky Dickson's taking over in 2004?

Recently City Council reversed their designated drought level, undertaken in part by advice from Water Chief Ricky Dickson.  Ricky told council he interpreted one section of the drought ordinance as Council "can do whatever y;all want."  The City Attorney did not countermand Dickson's legal prognostication.

Council did what they wanted and reversed it the next meeting, stating they needed to undo an illegal action.   How did Ricky advise Republic on fees under the city trash ordinance?  Was he as cavalier with trash fees as he recently showed with the city's drought ordinance?

A separate track would have the city auditor ask the seven companies who failed to submit a bid why they made their decision.  How many don't want a new $400 million over ten years contract?  Given they all likely desire one, why did they not submit a bid?  What structural aspects of the bid documents favored the incumbent Republic?  

After these investigations council would have appropriate information to act on prior bids submitted or consider undertaking a new RFP process.  The City's rush to approve awarding Republic two contacts, with trash up to twenty year term and the landfill potentially over one hundred years, will be inscribed in ordinance on Tuesday.  Council will dot the "O", which many see as offensive from an ethical standpoint.

Update 7-14-14:  San Angelo Live has information on one City Councilman's  interactions with Republic Services between RFP submission and the final vote on July 1.