Benedetti Buyback Hits City Council Again

San Angelo's City Council will revisit a decision it made over four years ago.  Council decided in January 2019 to exercise the buyback agreement in its contract with Benedetti.  

The June 6, 2023 background packet states:

The City is negotiating an agreement with Benedetti, Inc. in order to execute the buyback provision of the original agreement. The repurchase price will result in $800,000 in proceeds to the City plus an additional $17,500 for expected issue costs associated with this redemption of the 2016 Streets CO. Since the agreement with Benedetti is a multi-year agreement, the City must redeem $800,000 of the original CO to avoid potential Federal tax violations associated with a tax-exempt bond which could potentially affect the City's future ability to issue debt. Essentially, the City will be paying off, or calling, a portion of the bonds at an earlier date than originally planned. The City has this funding available in the Debt Service Fund’s fund balance so that it may be placed into escrow for payments at the relevant call dates. The amount placed into escrow will also include approx. $45,366 to cover the costs of interest associated with the bonds at the date of defeasance.

This defeasance will allow the proceeds from the repurchase to be deposited and budgeted, as received, into the Street Infrastructure Fund.

The City will receive $800,000 in proceeds over a period of four years plus an additional $17,500 to cover issue costs. Beyond the costs of issuance, which are being recovered, there is no additional cost to the City that wasn't previously obligated.

City Council approved the purchase of the Benedetti machine to resurface San Angelo's beleaguered roads in December 2016.  Councilman Tom Thompson asked for an update on the machine in March 2018.  City staff provided a memo in response.  Ten months later the city was asking for its money back.

So it took two years for the City to decide the equipment wasn't working and twice that to garner a refund?  

Update 6-6-23:   City Council approved the item as presented.