Benedetti Buyback Deal Hits Third Amendment

The City of San Angelo physically returned its Benedetti Phoenix asphalt recycler in October 2019 and has been waiting for payment since.  The City financed the $1.2 million equipment purchase with the intent of street maintenance crews refinishing deteriorated city streets.  

The plan did not materialize and few streets were redone with the equipment.  In 2021 Council approved spending $1.4 million to refinish Rio Concho, four years after a Benedetti refinish.

The initial buyback agreement was created December 2018.  City Council approved the buyback in January 2019.  Beneditti had until October 30, 2020 to refund the city $800,000 or begin paying 10% interest on the outstanding balance.  

The COVID pandemic disrupted the country in March 2020.  The city understandably wanted the $800,000 and executed a series of amendments postponing payment. 

Amendment 1 ..."the parties executed an amendment to extend the payment date until April 30, 2021"

Amendment 2  ...."provide for a payment date of August 31, 2021"

In April 2022 the city and Benedetti appeared close to resolving the issue.  The company thought they had a buyer for the city's returned equipment.  That did not materialize.

City Council approved the latest amendment at its June 6, 2023 meeting.

Amendment 3 

• The total amount to be collected by the CITY from BENEDETTI as the repurchase price of the EQUIPMENT is equal to $800,000 plus $17,500 in costs of issuance for defeasance of the bonds for a total of $817,500; and 

• A quarterly payment in accordance with the Payment Schedule included in this amendment

City Council approved the plan to refund the financing in accord with the payment schedule. 

Finance Director Tina Diershke noted in an e-mail chain:

....we would like to defease the amount necessary from the 2016 Streets CO to recycle the amount due from Benedetti , Inc. and make that amount available for immediate use for street reconstruction and improvements.

Public Works has been working on the buy-back agreement for several years and has finally come to terms with the vendor.

I believe Council already authorized Daniel to negotiate and execute the agreement several years ago, and this would be an amendment to the original agreement.

It would be the third amendment to the original agreement, all agreed upon terms with the vendor.

Director of Operations Patrick Frerich stated in an e-mail:

We’d also like to budget the entire revenue upfront.

Finance Director Diershke replied:

I was thinking we would need the signed agreement in place prior to the budget amendment as a basis for budgeting the revenues and expenditures.

A Benedetti budget amendment may be on City Council's docket in the near future.

The City of San Angelo's Benedetti Phoenix has been a story of unfilled promise after promise.  I can see why staff want to present as little as possible and move on.