Sales Tax Decline Consistent for FY 2016

The City of San Angelo Development Corporation board met last week and heard staff's hope that the sales tax situation might be improving.

"We did end the year just slightly under budget for sales tax revenue.  However our most recent month over month comparing with last year we were up just slightly at 0.39%.  So we're hopeful going forward that will continue to see that upward trend."

"Slightly under budget for sales tax revenue" was a shortfall of $510,399.  That's nearly one month of sales tax revenue.  September 2016's sales tax revenue came in 12.6% or $88,647 below 2015's.  I'm not sure how that's upward for the month.  Also, one month of data does not make a trend.

The shortfall when comparing the last two years of actual data came in at nearly $1.2 million or 12.5%.  Hope is a good thing, so are knowledge and faith.  I pray our economy stabilizes and expands in a way that helps people living here. 

City Aided Nasworthy Development Progresses

San Angelo's City Council will address a possible zoning change from Ranch and Estate to General Commercial for 30 acres at the old WTU energy plant.  The land is owned by Glen Meadows Baptist Church, having purchased it from Joe and Mark Walraven in January of this year.  

Oddly, City Council rezoned another plot of Lake Nasworthy land in October 2013 for Fleet Equipment Leasing for development of single family residences.

Z 13 -32: Fleet Equipment Leasing, LLP. AN ORDINANCE AMENDING CHAPTER 12, EXHIBIT “A” OF THE CODE OF ORDINANCES, CITY OF SAN ANGELO, TEXAS, WHICH SAID EXHIBIT “A” OF CHAPTER 12 ADOPTS ZONING REGULATIONS, USE DISTRICTS AND A ZONING MAP, IN ACCORDANCE WITH A COMPREHENSIVE PLAN, BY CHANGING THE ZONING AND CLASSIFICATION OF THE FOLLOWING PROPERTY, TO W IT: An unaddressed tract occupying a 25.822 acres tract located south of Red Bluff Road and Hillside Drive; more specifically being 25.822 acres out of 96.314 acres of the Christoph Voight Survey 181, Abstract 3931 and Carl Dammann Survey 180, Abstract 141 in far southwest San Angelo. This property is described on a Preliminary Plat titled “The Canals at Lake Nasworthy” and occupies all of Blocks 6 and 7, changing the zoning classification from a Ranch & Estate (R&E) to a Single -Family Residential (RS -1) D istrict; PROVIDING FOR SEVERABILITY AND PROVIDING A PENALTY 

Fleet Equipment Leasing is owned by the same Walravens who sold the old power plant site to Glen Meadows.

The land rezoned in 2013 is on the back part of Gun Club Road, a popular walking/running site for area citizens. That same October 2013 meeting had City Councilman Rodney Fleming saying:

Councilmember Fleming suggested decreasing the number of pedestrian traffic on this road. He proposed installing pipe fencing in the illegal parking area and removing the park benches and trash receptacles from the area. Mr. Fleming suggested utilizing Lake Nasworthy trust funds to pay for the project.

Public comments were made by Citizens Tad Logan , Rob Ehlers, Marilyn Ross, and Kirby Vanover in support of the project.

Councilmember Fleming suggested moving forward with the prohibition of parking within the area. Responding to a question by Councilmember Farmer, Chief Tim Vasquez stated citations are issued, pedestrians are police d, the area is regular ly patrolled , and he suggested privatizing the road or designate as a one -way road. In conclusion, City Council suggested staff present options at a future meeting possibly utilizing the Lake Nasworthy Trust funds to fund the project .

Executive Director Public Works Ricky Dickson presented a plan to sell city land to facilitate the development of the Canals at Lake Nasworthy in December 2014.

Oddly, this deal was not with Fleet Equipment Leasing, who'd pursued the zoning change, but with Psalms 100 Development LLC, a developer the city selected in July 2014 after an RFP process.

Consideration of authorizing the City Manager to enter into a Real Estate Sales Contract and a Development Agreement with Psalm 100 Development, LLC in substantially the attached forms for the sale and development of two tracts of land totaling 5.297 acres (1.682 acres and 3.615 acres) out of Christoph Vought Survey 181, Abstract 3931, and as part of the consideration accept from Psalm 100 Development 5.623 acres of land out of Christoph Vought Survey 181, Abstract 3931; and authorizing the Mayor or City Manager to execute an easement and right-of-way to Psalm 100 Development, LLC for public access improvements, and to execute such other documents as may be necessary or convenient to the stated purposes.

City Council looked to Councilman Rodney Fleming for guidance.

Councilman Fleming, a professional realtor, did not recuse himself as someone who might personally benefit in the future from said development.  Psalm 100 developed The Palms, which received a final plat from the City in March 2015.

Lots sell from $38,000 to $132,000.  Rodney Fleming's City Council service ended in May of 2016.

Russell Gully's Psalms 100 Development LLC has until 2019 to get the Canals at Lake Nasworthy read for market under its development agreement with the city.  Glen Meadows might want to work faster on their parcel. City Council's background packet for 11-1-16 includes Planning Commission testimony.

Mr. Russell Gully, SKG Engineering, representing Glen Meadows Baptist Church, approached the podium, identified himself, and proceeded to address the Commission. Mr. Gully posited that the Commission should approve the Zone Change as requested opining that churches are more of a “Special Opportunity” than an “Interpretive Center,” as called for in the Lake Nasworthy Master Plan. Mr. Gully continued to opine that a church-affiliated school could only operate within the General Commercial zone. Mr. Gully provided the Commission with some color renderings of proposed buildings.

Mr. Wesley Mikeska, an officer of Glen Meadows Baptist Church, approached the podium, identified himself, and proceeded to address the Commission. He indicated that about 20-25 acres would be sufficient for their development, but the church intended to sell off any surplus land to a suitable buyer at its discretion.

The Planning Commission's WTU zoning change is not what City staff recommended.  It will be interesting to hear what history is shared and Council's discussion and public comment on the item.. 

San Angelo Citizens Conserved Water as City Council Requested

The City of San Angelo's 2015 annual financial report includes a table on the second to last page showing average daily water use history.  It's pictured above:

The impact of the 47.5% water rate increase in September 2011 can clearly be seen as citizens reduced usage.  Citizens went from using 14 million gallons per day in 2011 to 8.8 million gallons per day in 2015.  That's a 37% drop in average daily water usage, exactly what City Council said it wanted.

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 doing what Council wanted "blew a hole" in the water budget.  So City Council hired Raftelis at a cost of $107,000 to make the case for fixing the budget hole.  That resulted in a five year plan where rates will rise another 55%.

Council increased rates again in January 2016 by an initial 11.5% of the planned 55%.  The impact of that increase is yet to be seen.

Update 4-4-2017:  Water use for 2016 increased to 10.04 million gallons a day.  The increase occurred after the first 11.5% increase in water rates.  An additional 11.5% increase hit on 1-1-2017.  

San Angelo Water: Two of Eight Samples Had Hexavalent Chromium

The City of San Angelo's water system had 2 out of 8 water samples test positive for hexavalent chromium, the chemical in drinking water that harmed people in Hinkly, California.  The movie Erin Brokovich turned hexavalent chromium into a frightening household word.

San Angelo's two positive samples came in at .035 and .038 parts per billion (ppb).  Although they sound like minuscule amounts the California public health target level is .02 ppb.  The two samples with hexavalent chromium came in at 75 to 90% higher than this goal.    

One other county in our area had five out of eight water samples test positive for hexavalent chromium, Menard County.  The city of Menard's average of .0238 ppb exceeded the .02 public health goal.

The city draws water from Lake Ivie, the Concho River and the Hickory Aquifer.  When the City of San Angelo developed the Hickory Wellfield radioactive radium was the primary concern.  It's not clear the source of hexavalent chromium in the two San Angelo water samples, but that would be interesting to know. 

City Council to Discuss Hickory Water Well Driller Alsay Again

Alsay Corporation first appeared on the City Council agenda on August 6, 2013 when the company was approved to drill six additional wells in the Hickory Aquifer for $7.57 million.  It reappeared this summer and Alsay's been a regular on Council's executive session agenda ever since.  Council has not shared their deliberations from any closed agenda discussions.

San Angelo Live reported operational problems drilling the last Hickory well (in their March 2016 piece).

The last well received delays due to the well driller having operational problems. Now awaiting the well to be completed, the project is estimated to be finished in June or July of this year.  

The City's website states "Six new wells were completed in June 2016." Hints of performance issues reside in the following description from the city's Hickory Aquifer webpage:

• Wellfield expansion: The total pumping capacity of the wellfield was increased from 6.5 MGD to 10.8 MGD by the drilling and installation of six additional wells and supporting infrastructure. This project was substantially completed in June 2016. This portion of the project was covered under two contracts for a total amount of $17.3 million.

• Engineering: Close-out documents are being prepared for the wellfield expansion projects. Approximately $15.9 million of the original $19.38 million contract amount has been paid to date.

Roughly $3.4 million of the contract amount has not been paid per the city's website.  The closed session agenda item cites "pending or contemplated litigation."  So far concerns have not surfaced, but maybe they will.

Council to Take Up Development Corporation Items

San Angelo's City Council will consider three items from its Development Corporation in the consent agenda for its October 4, 2016 meeting.

First, the City of San Angelo must spend $2.4 million to make $1.2 million off an Industrial Park land sale.  City Council documents state:

On Wednesday September 28th with a vote of 5-0 the COSADC Board accepted AEP Texas North Company's offer for 52+/- acres of land in Phase 2 of the Industrial Park at a purchase price of $1,196,000 or approximately $23,000 per acre and authorizing the Board President to negotiate and execute a real estate sales contract in substantially the same form as attached.

The proposed sales contract will require that COSADC provide all utilities to the property line and jointly with the buyer address all City of San Angelo storm water requirements to allow development of the property. The preliminary engineer’s cost estimate is approximately $2.4 M to minimally extend Gateway to a new cul de sac, minimally extend utilities to serve the project and provide all storm-water improvements for Phase 2 of the Park.

Second, Council will consider approving the agreement between the city and the development corporation for staff services:

Consider ratifying COSADC's approval of the City of San Angelo Agreement for Provision of Administrative Services for FY 2016 and FY 2017 in the amount of $471,273.59 for FY 2016 and $513,677 for FY 2017

Oddly the agreement never mentions a critical COSADC bylaw requirement, the production of an annual report.  The city's website does not host an annual report from any year for the development corporation.  One exits for 2011.  The 2012 report was given in October 2013.

The city conducted a compliance audit for fiscal year 2013.  That arrived in November 2014 but the city refused to post the document.  However, it is available here.  It paid local accounting firm Armstrong Backus $1,175 for a contract compliance audit.  The COSADC board approved the disbursement in its February 2016 meeting.

There's been no presentation of an annual report or compliance audit since 2014.  In February 2015 City Councilwoman Charlotte Farmer asked the Sales Tax compliance audit be made public, possibly at a future meeting.  

Third, COSADC will recommend to City Council concerns air service marketing.  The Development Corporation approved the hiring of KSA Engineers for up to $63,000 for air service marketing and recruitment services.   KSA's website had this to say about an earlier effort to add an airline at Mathis Field.

Over the past few years, the San Angelo Regional Airport has undergone significant improvements and more are on the way, including efforts to attract additional airline services and major renovations of the terminal. We are currently working to address a number of air service issues, such as the lack of jet service, need for airline choice and passenger frustration over canceled or delayed flights. These issues are prompting some people to drive to their destination or to other cities’ airports, and that is a serious concern for us and the community as a whole.  June 2, 2011

In August 2014 San Angelo Live reported on KSA's involvement in airport service development for nearly $80,000.  That was in the midst of the oil boom. 

Anyone wanting to watch how the Development Corporation handled these items can do so here.  I found it interesting that several items were taken from public presentation to executive session, meaning the public did not get to hear staff recommendations or hear officials questions, concerns or discussion on the items.  We'll see if this is a one time event or becomes a pattern.