New's November 1: Middle of the Arc

San Angelo Mayor Alvin New had a busy November 1, 2011.  He chaired the first City Council meeting of the month, where council addressed employee and retiree health insurance.  Sometime that same day New signed an affidavit indicating his substantial conflict of interest in MedHab LLC, a firm in negotiations with the City of San Angelo for economic development assistance.

Affidavit Mayor New; MEDHAB, LLC 12-159

During the summer budget process City Council prioritized economic development for an $800,000 increase.

Council made sure health insurance stayed low on the priority list in budget deliberations..

After Council budgeted no increase in health insurance, it entertained an exclusive provider arrangement with Community Medical Center, projected to save $483,000 in 2012.  .City Council refused to consider using ERRP funds for the second year in a row.  The projected $480,000 in ERRP money could've kept Shannon as a provider, while the city's health insurance bill remained reasonable.

Council approved the money saving, exclusive provider arrangement on November 15.  It addressed capital items at their next meeting..

Mayor New clearly stated his desire to use health insurance savings for capital budget items.    On December 20 Council decided to use ERRP money in 2012 to "avoid federal strings."  This combination should free up a huge amount of health insurance money.

Watch upcoming budget amendments for financial sleight of hand.  To think that health insurance money could fund the new Business Resource Center, well that's appalling.  It fits with a Council that wiped out local ethics standards for economic development assistance.  Mayor New and MedHab are dual benefactors.

Much of the arc remains to play out on all three issues, health insurance, capital projects and MedHab's $3.6 million incentive.  However, there are enough clues to be concerned about the trajectory..

(To see all MedHab posts click here)