San Angelo's Economy: Expansion & Layoff

San Angelo's economic contraction occurred shortly after its rapid expansion.  Energy companies dominate the list of layoffs/closings after comprising a good chunk of corporate expansions during 2013-2014.

Half cent sales tax proceeds dropped 8% year over year for November.  Those are a few of the statistics in the Development Corporation's December board packet.

Funding San Angelo's Development Corporation

The City of San Angelo Development Corporation is funded by the half cent sales tax, which had been in decline for five of the last six months.  The first month of the new fiscal year found sales tax collections down over 14%.  COSADC expected sales tax revenues nearly $50,000 higher than occurred.

The oilfield bust came home in November when National Oilwell Varco announced it would leave San Angelo eliminating 120 jobs.  The price for a barrel of oil hits the lowest mark since February 2009.  Oil drilling rig counts continue dropping.

City Council recently asked COSADC Executive Director Roland Pena to explain the addition of a new staff member.  What will happen if sales tax revenues continue to fall far short of budget? 

Update 12-12-15:  November sales tax proceeds for COSADC came in (8.02)% below last year.  The estimated sales tax budget is short $137,077 and the budget called for a slight decline.  Sales tax collections are roughly $175,000 below a year ago.

City Council Enacts Plan for 55% Water Rate Increase

City Council discussed a 55% water rate increase over a five year period, approving an initial 11.5% increase in rates for 2016.  Some Council members seemed unclear as to recent water bill increases, a 48% rise in 2011 to fund the Hickory pipeline and the later addition of stormwater and pumping fees.

Four years ago City Council was clear on their motivation.

Citing a desire to encourage conservation, council decided to generate 75 percent of the revenue needed to make payments by increasing water usage rates by $1.31 per 1,000 gallons and 25 percent of the revenue needed to make payments by increasing the base usage rate by 29 percent.

Citizens responded to council's directive cutting the average usage from 8,000 gallons per month to 4,000.  Assistant City Manager/CFO Michael Dane spoke to this possibility in 2011,

As residents cut back on water use, especially as water usage restrictions have tightened under the city's drought contingency plan, Dane said, sufficient revenue to pay for the debt service payment may not be generated, which would result in the city having to impose even higher rate increases.

"That's a wild card," Dane said of "how strong the water consumer reaction is" to cutbacks and drought.

If citizens cut back usage so dramatically why is the average water bill higher than projected in 2011? 

How did the 2011 water rate increase multiply beyond what staff projected?
 

How might Council's new promises look in five years?

It's hard to have confidence in a group that can't or won't explain why the last round of fee increases hit citizens harder in the pocketbook than promised.  This is our future.

What will bills and usage look like come 2020?  The "Dane prediction" happened once. Could it happen again?

Update 6-24-20:   Many Americans can no longer afford water due to price increases over the last decade.