MedHab's Pay Levels

MedHab plans to crack the sports rehabilitation, corporate loss prevention, diabetic/neuropathy and back prevention/rehab markets with patented high tech medical devices.  In six years MedHab's employment could reach 227 people with a payroll of $6.5 million.

That equates to $28,600 in annual pay per worker, just over $14 per hour.  In 2003 the average wage in Tom Green County was $13.13.  Should MedHab's number include benefits (roughly 25%), hourly pay would drop to $10.50 an hour.  These projected pay levels are for 2018.

It remains to be seen how much "living" can be had at MedHab's wages, assuming stars align for the company to pierce all their targeted markets.

Does MedHab have any projections for Board compensation between 2012 and 2018?  Will Board members get cash compensation, stock units and stock options?  How much will the City's $3.6 million in economic incentives boost MedHab's net worth?  That didn't make the City Council presentation.

Mayor New's Unshared MedHab Affidavit

Leaders charged with governance need to declare the size and nature of financial conflicts of interest.  City staff presented the following slide at the San Angelo City Council meeting on January 3rd.

Staff indicated Mayor Alvin New, a board member and MedHab equity holder, had filed an affidavit.  This information was not shared with the public, thus I assume other City Council members had not seen it.  If he holds "$15,000 of more of the fair market value of the business entity," New has a substantial interest. 

Not mentioned in the meeting is a conflict of interest questionnaire, required of local officials with board seats and substantial holdings. 

Councilman Kendall Hirschfeld said:

"A lot of good things will come from this, I hope."  Hirschfeld spoke in favor of the project "regardless of who the investors are."

Councilman Paul Alexander offered:

"MedHab will cause other employers to come here...  Fertile ground that's inviting."

Councilman Fredd Adams spoke sagely:

"Fortune favors the bold...  Industry follows industry."

Councilman Johnny Silvas quipped:

"Bring 'em in."

Councilwoman Charlotte Farmer noted:

"This is the first project brought in by COSADC, which should make half cent sales tax voters very happy."

How does $3.6 million in City funded incentives compare to the half cent sales tax that funds economic development efforts?  While the city decimates health care benefits and services, it's growing an economic development Taj Majal.

As most City Council members are businessmen, the gate swung open for them to have a financial stake in new city projects.  This council institutionalized conflicts of interest, which appears in violation of the City Charter and their qualifications for office.  The world seems odder by the day, even in Surprisingly Conflicted San Angelo.

MedHab's Ross: Mayor New's Political Supporter

Medhab's Johnny Ross, founder of the fledgling medical device company, supported candidate New in the Fall 2009 Mayor race.  His letter to the Standard Times stated:

As the co-founder of a new medical device company, I am in search of a city to establish an operational plant. Upon meeting New at a business presentation, he immediately volunteered his services to assist MedHab’s efforts working with the city of San Angelo, the Chamber of Commerce, the economic development council and the state.

Although a final decision regarding the plant will not be made until next year, New’s ongoing effort has placed San Angelo in the top two locations.

Leadership and experience are the two most invaluable attributes a candidate can possess. Alvin New possesses these attributes and will make a fine mayor.

At what point did Alvin New become an equity investor in MedHab?  When was he appointed to the board of directors and what is his compensation arrangement?  How might New personally benefit from San Angelo's $3.6 million in incentives for MedHab?  Ethical leadership and forthright experience would have New out front on these questions, not AWOD, in Australia With Out Disclosure.

Note that Johnny Ross' 2010 decision on a plant location leaked into 2012.  Does that imply anything relative to MedHab's employment commitments?

Curious Citizen Brigade Rides

One day after San Angelo City Council amended economic development restrictions and approved $3.6 million in incentives for MedHab, a research posse rode out.  Here's what they found:

1.  Mayor Alvin New is listed as a board member on MedHab's website, not an advisory member as represented.

2.  The deal may need more than a COSADC policy change, as it appears to violate the City Charter which states. 

SECTION 9. QUALIFICATIONS:
A. In addition to the requirements prescribed by law, the following shall be the qualifications for the Members of the City Council:

1. Candidates for the City Council shall have been City residents for the 12 months next preceding the election and Candidates for Single Member District representatives shall have been residents of their respective districts for 6 months next preceding the election.

2. No Member shall be an employee of the city.

3. All candidates must possess the qualifications of a voter.

4. No person shall be eligible for the City Council who, at the time of taking office, is delinquent in payment of a valid tax levy, assessment paving lien or contractual debt or is indebted to the City in any sum of money on judgment.

5. No Member shall have an interest in the profits or emoluments of any contract, job, work or service for the City.

6. No Member shall have an interest in the sale to the City of any supplies, equipment or material.

B. Any Member who shall cease to possess any of the qualifications herein required shall forfeit his office.

C. Any contract in which a Member is or becomes interested may be declared void by the Council.

D. Each person elected to City office, as a condition to being administered the oath of office, shall have filed with the City Clerk a signed, sworn statement indicating that he or she is in compliance with the above stated qualifications and requirements.

E. Each person subject to this provision shall file with the City Clerk a signed, sworn, updated revision of this statement, annually, while in office.

Amended 4/13/76, 5/6/89 and 11/16/07)

Mayor New has a clear interest, currently undisclosed as to the nature of his MedHab investment and compensation arrangements for serving as a board member. 

3.  The board list filed with the Texas Comptrollers' Office shows ten members.  Oddly, one is a business, Deaton Engineering, while another looks like a stuck typewriter key, NNNN.  NNNN's address is the same as Lisa Eady Investments, 502 S. KOENIGHEIM, SUITE 1A.  Only the MedHab listing had the zip code as 76904, when it's really 76903.

4.  MedHab is already getting aid from the Ft. Worth Tech Accelerator and has a development agreement with Rice University in addition to their connections with ASU. In addition to their office in Ft Worth, their home is in Mansfield, TX and they have another office in Tyler. Pretty spread out for such a young start up.

The U.S. Patent and Trademark Office website showed only one patent assigned to them. It was approved in June.  There were no pending patents or patents assigned to MedHab or their listed inventors. I hope they have the licenses they will need to other patents and intellectual property needed to manufacture these devices. Hard to make even a simple pair of shoes anymore without infringing on someones patent, trade secret, or other IP.

ConchoInfo, GoSanAngelo's Old Yeller and State of the Division found these tidbits.  Join the ride and post what you find out here.

Mayor New on Board of Firm Approved for $3.6 million Incentive

San Angelo City Council approved an incentive package for MedHab, a medical rehab device maker.  The $3.6 million in incentives requires MedHab to add 227 jobs in the next six years.  Council voted 5-1 for the package.  Mayor Alvin New was not in attendance, as he is out of town.

Alvin New sits on MedHab's Board of Directors.  MedHab's website stated:

Board of Directors - Alvin New

Former Principal, Town & Country Food Stores

Alvin was born in Brownfield, Texas in 1963. He graduated from Pecos High School in 1981 and Angelo State University with BBA in management in 1984. He married Patricia Neal in 1983; they have two daughters, Victoria, 15, and Elizabeth, 13.

Alvin worked as a sales clerk at a Town and Country Food Store on Pulliam Street while attending ASU. He stayed with the company after graduation and worked his way up to a vice president when officers of the company purchased the business from Steve Stephens in 1999. Alvin was one of six equal partners in the leveraged buyout. The six partners named Alvin executive vice president over operations and marketing, and later president and CEO.

Alvin and the management team improved Town and Country’s size and profits, leading to a surprise offer from Susser Holdings to buy the company at a price shareholders could not refuse. The company sold in 2007, and Alvin helped in the transition before leaving the company in 2008.

Alvin was elected the Mayor of San Angelo in December 2009. He currently serves in that capacity.

Many companies compensate board members with stock and options.  Mayor New's holdings and director compensation arrangement should be disclosed to the public.

The City of San Angelo approved a substantial investment in MedHab through job incentive money, paying for renovations, helping with capital equipment costs, paying a portion of a building lease, 100% tax abatement, dirt cheap space and refunding a portion of code compliance fees.

City Council voted to drop the following requirement for MedHab to get the award:

The guidelines say no member of the City Council or COSADC board of directors "shall be eligible for assistance from the COSADC during his/her tenure or for six months thereafter."

Does this mean public service can now be private service?  Council effectively voted such.

Mayor New is out of town, however I assume he knew these items would be on the agenda.  Council cleared the way for New to financially benefit.

Disclosing financial conflicts of interest and recusal from voting are basics for anyone serving on a nonprofit board, much less elected officials.  The Mayor effectively recused with his absence.  The public awaits full disclosure.

ERRP: Sad State of Council Minutes

Surprising San Angelo's leaders lowered the transparency bar again.  One might expect an important motion specifying the exact use of $343,000 in Early Retiree Reinsurance Program (ERRP) funding to make the minutes.  It didn't.

A vote was taken on the motion on the floor. AYE: New, Alexander, Silvas, Adams, Hirschfeld, and Farmer.  NAY: Council member Morrison. Motion carried 5-1.

It was hard watching the replay of the council meeting, with staffers gathered around the computer, trying to get the right words on the screen.  All that work and the epistle wasn't shared with the public?

Council acted like ERRP funds were iffy, until the check arrived from Uncle Sam in December.  City Council rushed to spend the money in a jiffy, to avoid "federal strings."  In their excitement Council broke the only ERRP string, that federal funds not displace, i.e. lower, current local commitments.

Good thing it's all on tape, beginning in November 2010.  It'll make quite the movie.

Limbaugh's Havre Not: ASU

Angelo State University's first Vice President for Strategic Planning happened to be its last.  ASU finally spoke to Vice President James Limbaugh's leaving in a press release. 

Administrative changes will be implemented at Angelo State University in the wake of the departure of Dr. James M. Limbaugh, vice president for strategy, planning and policy, to become chancellor at Montana State-Northern in Havre, Mont., effective Jan. 1. As the vacant vice presidential position will not be re-filled, those offices and individuals who reported to that vice presidential position will be reassigned to other vice presidents.  

ASU blew up their strategic plan as a result of state budget cuts.  Oddly while facing the loss of millions of dollars, the university added a fifth Vice President and announced a study evaluating a move to Division I athletics.  Many people thought "What the hey?"

Santa did not bring a replacement for Limbaugh or Division I status.  The holidays found ASU announcing a drop to four Vice Presidents (December 20) and shooting to be competitive in Division II (December 21).

Limbaugh had strategic planning and institutional effectiveness, most of which moved under new Vice President Brian May.  How will ASU do in the New Year accreditation wise?  The foundation needed to already be laid.

Organizational jumbling, after traumatic budget cuts, can't be helpful.  The possibility of probation exists.  Is the probability growing?  There's only so much a good editor can do.  Accreditation, havre or havre not...