San Angelo's City Council called a meeting for Wednesday, March 11 at 9:00 am to deal with the city's development agreement with Martife-Hirrschfeld Energy Systems. This comes thirty minutes after the Development Corporation meets in the same room on the same topic. Both the COSADC Board and City Council will address the city's agreement with Hirschfeld Energy in Executive Session.
The City's contract with Hirschfeld has been the subject of numerous executive sessions since October 2013. The City stated at that tine:
COSADC and Legal staff are currently working with the company to determine the long range employment goals for the company and a schedule for repayment of any funds due.Sixteen months later the city is still working with the company to resolve the matter. A tag team Executive Session indicates closure may be near. It could also portend a sale of Hirschfeld Energy by the company or its private equity owners, Insight Equity.
Insight Equity acquired a controlling interest in Hirschfeld Holdings LP on April 27, 2006.The public may wonder why Hirschfeld's owners need local taxpayer subsidies:
From 2006-2009 Hirschfeld paid out nearly $100 million to owners via partner distributions. In 2009 they floated debt, part of which funded partner payouts.
Should Insight Equity be ready to cash in on Hirschfeld any buyer would want clarity on the company's economic development obligations.
Council and the COSADC board have been quiet on this issue for some time. The Development Corporation is yet to produce a 2013 Annual Report, even as the due date nears for giving the 2014 Annual Report. COSADC bylaws state:
The Board shall make an annual report to the City Council outlining the following:
1. A review of the programs and accomplishments of the Board in implementing the Development Projects
2. The activities of the board for the budget year addressed.in the annual report together with any proposed change in the activity.
The annual required report shall be made to the City Council by May 1st of each year.
There is no record on the city's website of a 2013 COSADC Annual Report to City Council, which was due by May 1, 2014. This language is not in any City Council agendas or minutes, nor does the search show a specific presentation on this topic. However, I did find where Council accepted the Annual Report of the Records Management Program on February 4, 2014..
COSADC's website links to the 2012 Annual Report. Did the City and the Development Corporation hold up all updates nearly two years because of one poor performer?
Hopefully the Hirschfeld story will become clear to those puzzled by the city's failure to communicate with the public on all economic development agreements.
Update 3-11-15: The City of San Angelo is suing Hirschfeld Energy for failure to fulfill their economic development agreement.
Update 2-1-17: Lo and behold the Development Corporation produced three annual reports for the board to approved in their January 2017 meeting. With no discussion the board approved reports for 2013, 2014 and 2015. They're waiting on a picture for the 2016 report.