Texas Pacifico Incentive Replay

City Council took up a recommended $247,500 economic development incentive for Texas Pacifico Railroad in their February 4 meeting.  Here's the logic presented by Economic Development Director Bob Schneeman:

As the Council is aware, this is an item that came from the COSADC board, the Development Corporation board, recommending an incentive or grant to Texas Pacifico Railroad for moving their headquarters here and for creating jobs here, also for bringing a building that previously had been off the tax rolls in a nonprofit situation back onto the tax rolls where they now have their headquarters.  

Under our guidelines a company moving their headquarters to San Angelo is eligible for up to $10,000 per job, by our guidelines based on jobs created or retained.  COSADC in addition felt that this particular item was something of a relationship builder, that we're looking to support local businesses and that we're trying to establish a longer term, sort of goodwill relationship with Texas Pacifico, who is going to be a very large contributor to our local economy over the years to come, whether that be through oilfield or through moving other goods and services through the city.  

This is an item that was voted on by COSADC and was unanimously approved by the board and so staff brought it to council.  At this time we'll open it for any questions the board may have for me.

Councilwoman Charlotte Farmer spoke first in support of the proposal:

It's a proven fact to me that this firm has created secretarial jobs, payroll jobs, yard jobs, considerable jobs, jobs that weren't there and the people that are there are very thankful that these jobs have been created.  I see participation from us and taking the recommendation of the COSADC board is something that we can do to create goodwill for this company moving their headquarters here.  It certainly has been a long process and has taken awhile to get here.  I'm not for the full incentive amount.  I am against that and would like to see that cut back to only $2,000 per job.  And I'll make the motion, move to make the motion that we approve that amount for those jobs, per the COSADC's recommendation, but only less than what they recommended.

Schneeman, in clarifying the motion, noted for the first time the number of jobs incentivized, thirty three.  Farmer's motion received no second, thus it failed.  Councilman Winkie Wardlaw moved to deny any economic development incentive to the railroad, which Councilman Johnny Silvas seconded.  After no council or public discussion the motion to deny passed 5-1.

Council may have had a highly informative discussion on this item in Executive Session, but the presentation lacked substance for members of the public interested in COSADC's or Texas Pacifico's case for giving/receiving public money.

Take the headquarters move.  The Standard Times reported in October 2011:

The Texas Pacifico headquarters moved recently from Brownwood to new offices at 3814 Sherwood Way in San Angelo, Hammond said. The line employs 18 people, with another eight full-time positions contracted on two full-time maintenance crews.

Texas Pacifico had a headquarters in San Angelo for more than two years, a fact not mentioned by COSADC, Bob Schneeman or Councilwoman Farmer.

Yes, it did make a later move to the old WTU building downtown, 106 South Chadbourne Street.  Ironically, the City used the old WTU building for offices while contractors renovated City Hall, a project also managed by Elizabeth Grindstaff. 

I expressed my concern regarding the timing of former Assistant City Manager Grindstaff's employ with Texas Pacifico and the term of the economic development proposal.  The 33 jobs were for 2013-2014, one year of which has already occurred.  Elizabeth Grindstaff joined Texas Pacifico in October 2012, a mere three months before the start of the proposed economic incentive period.  I also felt Grindstaff had a clear role in the Furniture Fiasco, which she publicly denied to City Council as a Texas Pacifico Vice President.

According to Grindstaff in a May 2012 e-mail the $100,000 in Water Department furniture was needed ASAP to avoid expending "any additional funds on rent and utilities at WTU." Grindstaff and Interim City Manager Michael Dane put off the big furniture presentation in March 2012 and the issue did not come back until City Manager Daniel Valenzuela's first Council meeting in October, where it exploded.

I have long had concerns about the lack of complete information staff brings to council and the public.  This week the public saw not one slide with supporting logic from Bob Schneeman on a Texas Pacifico economic development incentive package.

While this is not the most egregious case I've seen, the public deserves a clear rationale with supporting information on how an employer deserves nearly $250,000 in public funding, especially for deeds long accomplished.

Update 2-10-14:  San Angelo Live did a story on Texas Pacifico's investment in the South Orient Rail Line.  Texas Pacifico has a lease on the track through 2091, so the company will get full value of any money it invests.  Also, track updates have been subsidized with state and federal funds.  The state legislature gave $5 million to the company in its last session, which Texas Pacifico plans to use in San Angelo.

Public Information Suffers Technical Issues: TV & New Website

The City of San Angelo has a new website, stunning in design and numbing in use from repeated page load failures.  Oddly, the first page failures I experienced were under City Council.  The link to today's City Council meeting failed.  The news link on "SATV experiencing multiple difficulties" also failed.

I look forward to both the website and Channel 17 being rich sources of information once again.

Update 2-5-14:  "The reason you had problems with the new website last night was that you probably were accessing it at the time it was loading. Vision Internet says that typically takes a few hours. You might try again. Point your browser to www.cosatx.us.  And thanks for helping promote our stunning new site." Anthony Wilson, Public Information Officer, City of San Angelo, Texas

Update 2-6-14:  I obtained a DVD of this week's Council meeting from Anthony.  While there he asked about my experience with the website.  I said I searched "reclaimed water" and nothing came up.

I told Anthony a similar search several days ago produced dozens of documents.  Anthony said the new website uses Google search and it could be weeks before it populated searches to the level of the previous website.   I'll keep searching "reclaimed water" and let you know when the website is back to its prior level of performance.

Elizabeth Grindstaff's Short Cooling Off Period with City

Assistant City Manager Elizabeth Grindstaff's last day with the city was October 2, 2012.  She left to become Vice President for Texas Pacifico, our regional rail hauler.  Within four months City Council appointed Grindstaff to the Airport Advisory Board. 

City Council will consider whether to approve nearly $250,000 in economic development funds for Texas Pacifico for up to 33 jobs created for the period 2013-2014.  If Council acts on the Development Corporation's recommendation, the city could be funding Texas Pacifico jobs created a mere three months after Grindstaff left city employment.  City Council members need to be off Council for six months prior to being eligible for economic development funding.

Given Elizabeth Grindstaff's clear role in the Furniture Fiasco, I'm puzzled by the rush of love shown after she quit City Hall.  This is why City Manager Daniel Valenzuela should release the results of his internal investigation into the ordering and installation of over $100,000 in Water Department furniture without required approvals.

I believe truth and reconciliation are in order for Elizabeth Grindstaff's or Will Wilde's employers to garner city business or taxpayer funded incentives.  Yet, that prospect looms this Tuesday for Grindstaff and Texas Pacifico.

Update 2-5-14:  City Council denied the Development Corporation's request for nearly $250,000 for 33 jobs. As the meeting is yet to be televised, I must rely on the Standard Times report.

Update 2-27-14:  Grindstaff filed to run for City Council in Single Member District #5.  If she wins she'll sit next to the Councilwoman who appointed Grindstaff to the Airport Board.  

Reclaimed Water Study: Alan Plummer Associates Flashback

San Angelo's City Council will consider hiring a consultant to provide advice on reclaimed water use.  The Standard Times reported:

The city will consider hiring experts to explore uses for San Angelo’s wastewater.

“We always look for alternatives when it comes to water, whether there’s a long-term drought or not,” said Kevin Krueger, the city’s assistant director of Water Utilities. “We want to make sure we look at the big picture of wastewater usage.”

On Tuesday, the City Council will consider authorizing staff to negotiate a contract with Alan Plummer Associates Inc. — a regional water consultant — for a reclaimed water alternatives study for San Angelo.

The study will explore nonpotable and potable reuse, offer a summary of state regulations and identify potential projects.

If this feels like a deja vu, consider City Council minutes from March 7, 2006:

Water Utilities Director Will Wilde presented background information and reported staff had received a final report on the Reclaimed Water Feasibility Study (submitted by Allen Plummer Associates, Inc. and part of Supplemental minutes). He stated the consultants were charged with looking at the various options available to the City, had identified potential customers for the reclaimed water, suggested options for direct use, and identified treatment updates to accommodate the reclaimed water. Mr. Wilde advised studies continue on various new chemicals, reuse of effluent water, underground aquifer treatment, and reverse osmosis treatment process with associated cost varying up to $50-60 million.

Mayor Lown directed staff to develop a condensed executive summary listing the various water projects, a status report of each project, funding mechanisms available to the city, and a timeline for completion.

Water Chief Will Wilde had one use in mind for reclaimed water, cheap irrigation water for his hobby cotton farm.  He executed that strategy in December 2007.

Given Will Wilde hired Alan Plummer Associates in 2006, might Alan Plummer return the favor and subcontract work to Wilde Engineering in 2014?  Alan Plummer's bid represented a team of consultants.  Will the broader team be identified at City Council this Tuesday?  Remember, it's Surprising San Angelo.

Update 2-4-14:  Alan Plummer Associate's partners on this study include Enprotec/Hibbs-Todd and LBG-Guyton Associates.  If a Wilde were to work on the project it would have to be a secondary subcontractor role.  That would be one level deeper than Blake Wilde's work on the Hickory pipeline.  It appears no Wilde's will be on the reclaimed water team.

Update 2-5-14:  City Council approved negotiations with Alan Plummer on the reclaimed water study.   The Standard Times stated the reclaimed water irrigation deal Wilde sealed requires parties give a year's notice before backing out.

TTU Up for Reaccreditation: Sending SACSCOC Feral Cat Documentation?

The Daily Toreador reported:

Every 10 years, Texas Tech undergoes an accreditation process by the Southern Association of Colleges and Schools Commission on Colleges (SACSCOC). The Office of Planning and Assessment is responsible for creating documentation to send to SACSCOC in order to be accredited.

Catherine Parsoneault, associate vice provost for planning and assessment, acts as the liaison for the university and SACSCOC.

“The goal of accreditation is for institutions of higher education to meet a standard of quality and to demonstrate continuous improvement,” she said.

I have a suggestion as to a document worth SACSCOC time and highly reflective of TTU's commitment to a standard of quality and continuous improvement.  I'd love to hear reviewers assessment of Tech's response to ethical concerns shared three times with administration.  The full document is below:

Ttu ethics point complaints 1 3 from jepysdad

If anyone believes Tech's responses qualify as less than a competent investigation or continuous stonewalling, feel free to report your concerns to SACSCOC via the instructions and form embedded in their Complaint Procedures document.

For those who like immediate access see the SACS complaint information below:


Sacs complaintpolicy from jepysdad

It seems the more complaints filed could be beneficial:

Should a number of individual complaints suggest a pattern of concern which may evidence a significant lack of compliance with the Principle that was not evident from any one individual complaint, the Commission may renew its consideration of the matter for whatever action may be appropriate. 

 I filed three complaints through EthicsPoint and felt a pattern of concern.  One, no "investigation" addressed the concerns I shared which included failed promises, abusive management behavior, outright lying and appropriation of property that did not belong to the university.  Two, the investigator offered promises of future collaboration that Tech repeatedly did not act upon.  This behavior was repetitive and egregious in my mind.  And three, Tech administrators repeatedly refused to respond to members of the public making complaints via e-mail.

Oddly, these investigations were conducted by a certified public accountant, a profession committed to impartial investigation and truth telling.  This highly decorated CPA did neither.   

She also serves as a frequent speaker for ACUA, TSCPA, Society of Corporate Compliance and Ethics, Texas Association of College & University Auditors, and other groups on topics ranging from fraud to ethics.

If anyone has a concern about Tech's top down, heavy handed treatment of staff or students over a seven month period, now would be the time to file a SACSCOC complaint.  The ball is in the court of those with status to file.  

City Council to Face the Grindstaff Conundrum

San Angelo Development Corporation approved an economic incentive for Texas Pacifico Transportation Ltd. for 33 jobs at $7,500 per job for the year 2013-2014.  The only Texas Pacifico representative to speak at the January 21 meeting was Vice President Elizabeth Grindstaff, a former Assistant City Manager.

Texas Pacifico's business is booming according to Progressive Railroading, which reported in July 2013:

Since frac sand and crude oil now account for 60 percent and 20 percent of total traffic, respectively, Texas Pacifico's volume figures to keep booming right along with the basin.

"I get a call a day. It's the sand people and the oil people and the pipe people and the hydrochloric acid people — pretty much the people involved in every aspect of drilling," says Federico Díaz-Page, the short line's executive vice president.

The inquiries about rail-served sites for crude or frac sand operations poured in so frequently last year, Díaz-Page in October 2012 hired Elizabeth Miller Grindstaff as vice president of sales and marketing. Formerly San Angelo's assistant city manager, Grindstaff now fields the calls and handles business development.

"We're not really out there selling. We're in reactive mode," she says. "My role is to react to the interest shown, to answer the questions and to find the real estate that suits customers."

As reflected in the motion this action will need City Council approval.  The last time Elizabeth Grindstaff spoke before Council she defended her role in the unauthorized purchase of over $100,000 in furniture for the City's Water Department.

Grindstaff had already moved on to Texas Pacifico when she publicly stated:

The furniture budget Council approved for the project was over $200,000....   At some time "they" decided to change the furniture in their suite....  At no time did Mr. Wilde and I have a discussion over new furniture for the Water Department.  Another city employee worked with Will on this.

Grindstaff led the City Hall renovation project, the basement of which the new Water Department Furniture was to fill.  On May 12, 2012 Grindstaff sent an e-mail to Mr. Wilde:

Subject:  City Hall Furniture

Will,

The guy at West Office Supply says that y'all have not ordered your furniture yet.  Is there an issue that I can help you with?  The order needs to be placed ASAP so we don't expend any additional funds on rent and utilities at WTU.

Please let me know ASAP.

Thanks,

Liz

Does that fit with Grindstaff's public testimony of no discussion over new furniture?  Hardly. 

The Furniture Fiasco gobsmacked new City Manager Daniel Valenzuela in his first City Council meeting.  Grindstaff and Interim City Manager Michael Dane clearly had significant roles in the city's public humiliation.  For that, Dane got promoted to Assistant City Manager.

Now the City may give nearly $250,000 to Grindstaff's employer to "bring jobs" to San Angelo.  Guess what, they were already coming:

Since early 2012, the short line's number of employees has ballooned from eight to 80.  

Recruitment has been problematic, too. The short line is competing for candidates with local oil and sand companies, which can offer a starting wage of $21 to $23 per hour compared with TXPF's $17, says Arias.

Recruiting will be more of a challenge next year because the short line will need 300 to 350 more workers — or four-fold the current number of employees — after the Presidio-Ojinaga bridge is replaced, he says.

The San Angelo Development Corporation approved an economic incentive for a booming company that turned its first profit of $1.5 million in 2012, the same year Texas Pacifico hired Elizabeth Grindstaff.  A quick look at their volume reveals:

2010  -  1,000 carloads
2011  -  4,000 carloads
2012  -12,000 carloads ($1.5 million profit)
2013  -30,000 carloads
2014  -40,000 to 50,000 carloads (projected)

Their ownership is:

Texas Pacifico is owned by Grupo México S.A. de C.V., a Mexican mining conglomerate that also controls 74 percent of Ferrocarril Mexicano S.A. de C.V. (Ferromex), the other 26 percent of which is owned by Union Pacific Railroad.

Does this sound like a company that needs $250,000 from San Angelo citizens?  Add that a major player in Texas Pacifico is one who had a clear role in a matter that caused council serious integrity concerns.  I hope Grindstaff reappears before council for the first time since the city's Furniture Fiasco.  Someone needs to make a public case for Texas Pacifico to get city economic development dollars.

Update 1-31-14:  Economic Development Coordinator Bob Schneeman is charged with selling the nearly $250,000.  How many jobs did Texas Pacifico add in 2013 that could get taxpayer money?   How much profit did the railroad earn in 2013, the first year for which they want incentive money?  We'll find out near the end of the meeting:

15. Consideration and possible action regarding an economic incentive agreement with Texas Pacifico Railroad - (Presentation by Economic Development Coordinator Bob Schneeman)

Retiree Health: Communication Flashback

City Councilman Don Vardeman, himself a city retiree, asked about providing wellness incentives to city retirees.  Human Resources Lisa Marley gave several excuses as to why the city has not offered discounts to Community Health Club to retirees.  One of those is communication:

Councilman Vardeman:  How do you get that information out to them?

Human Resources Director Marley:  If they come into the clinic discount cards are present for them to pick up and use.  We don't have a database to contact our retirees at this point.  We've been working to establish that, but not all retirees have e-mail addresses.  We don't have a real good method of getting that word out.

Councilman Vardeman:  Personally, as a retiree, I didn't realize I could even use the clinic. 

Flashback to summer 2011 when clinic use and retiree communication was the hot topic.  Note the political speech and commitment to develop a system 

Marley:  At no time did I conclude that retirees were not informed of this change.

Marley: Human Resources does not have a master list of emails for retirees, neither does it have an accurate listing of mailing addresses for retirees.  Any mass mailings to retirees result in one-third being returned for bad addresses.  I have spoken this week to an employee who is going to approach the Retiree Association to either get a complete list of emails or identify someone who can be the contact with HR for these types of notices in the future.

Over thirty months later and little has changed, except the number of retirees covered by the city.  That keeps dropping.  In 2011 the city provided coverage for 276 early retirees.  It expects to cover 215 in the current year, a decline of 60 people or 22%.  How many will be left when the communication system is finally developed?