Half Cent Sales Tax Drop Continues for COSADC

San Angelo's half cent sales tax proceeds declined to the lowest level in three years in January 2016.  One has to go back to January 2013 to find a lower number than the $605,393 the Development Corporation collected last month.  Sales tax proceeds for the current fiscal year are down an average of 13.25%.  That's significant.  February will be a bellwether month with the rodeo in town.  Hopefully it put more life in our local economy.

San Angelo's Search for Water Narriowed by City Staff

City Council discussed the following agenda during their February 2nd meeting:

Consider approval to negotiate a contract with Alan Plummer Associates, Inc. and Enprotec / Hibbs & Todd, Inc. for the Direct Potable Reuse Project ‐ (Presentation by Water Utilities Director Bill Riley)

Less than two months ago Council approved a water rate increase that would produce capital needed to develop future water projects.  It seems Water Utilities Director Bill Riley, Executive Director Public Works Ricky Dickson and City Manager Daniel Valenzuela forgot Council's direction during the water rate discussion to not target $136 million in capital funding to any specific project.  Council voted in the rate increase on 12-15-15

Thus the three showed up determined to push reclaiming the city's sewer water and treating it to a condition that would allow it to be consumed.  The video is a fascinating watch and somewhat reminiscent of former Water Chief Will Wilde's "management of the former Water Advisory Board.  What choice does a board have when staff present only one option. 

Twists and turns in the discussion include Riley's speaking to the inoperable Lake Spence pipeline publicly for the first time, Ricky Dickson's forceful statement's that sewer reclamation is the only viable project, Water Advisory Board member Chuck Brown's testimony as to a number of other options, Former City Councilman and WAB member Kendall Hirschfeld's stating staff provided the board one option and former City Manager Stephen Brown advising staff to be thorough, honest and transparent.  The meeting even had family intrigue as Stephen Brown is Chuck's father.

Council directed staff to work with the Water Advisory Board to bring back prioritized options with both capital and operating costs.  The Board last met on 10-27-15.  We'll see if staff listened to Council this time.

Lake Spence Requires $20 -25 Million Rehab

Finally the public heard the truth about the unusable state of the Lake Spence pipeline.  Former Water Chief Will Wilde offered such information in 2009 to push the Water Board to develop the Hickory Aquifer.

Seven years later Wilde's eventual replacement said it would take $25 million to rehab the Spence pipeline and install an intake barge.  Upper Colorado River Authority head Chuck Brown put the price tag at $20 million.

Who's been responsible for maintaining the pipeline? 

Water Utilities Maintenance provides maintenance, preventative maintenance and construction to all water and wastewater treatment plants, water pump stations, water storage tanks, wastewater liftstations, more than 150 grinder pumps, the Sewer Farm pump station, Nasworthy Dam, Nasworthy irrigation canal, Twin Buttes Dam, and the Spence pipeline, water tanks and pump stations.

 It's the same folks who stated in their 2015 Consumer Confidence Report:

WHERE DOES OUR WATER COME FROM?

San Angelo currently has six surface water sources: Twin Buttes Reservoir, O.C. Fisher Lake, Lake Nasworthy, O.H. Ivie Reservoir, E.V. Spence Reservoir, and the South Concho River.

Spence has not been maintained to a usable level for quite some time.  It would be interesting to hear the history of its failure and a clear assessment/plan for restoration.  Ironically, that information exists in a 2012 study by Freese and Nichols for the Upper Colorado River Authority.

To determine the required raw water system improvements, FNI first examined the existing E.V. Spence Reservoir raw water supply infrastructure, which is owned by the City of San Angelo. The system was originally designed in 1968 for 20 MGD of flow from the E.V. Spence Reservoir to the City of San Angelo.

The existing E.V. Spence Reservoir raw water supply infrastructure, as seen on Figure 3.1, has been out of service since the early 1990s due to multiple failures on the 36” pipeline.

Current Water Chief Bill Riley called restoring the Spence pipeline a very long term project.  City leaders were united in pushing one project to the exclusion of all others.  I'll explore how the city went from raising our rates to total alignment between City Manager Daniel Valenzuela, Executive Public Works Director Ricky Dickson and Water Chief Bill Riley.  My guess is it will be a rapid ride. 

New Airline to San Angelo: Boutique Air?

San Angelo's Standard Times reported:

San Angelo city officials have reached a tentative agreement with a second airline to set up operations at the city's recently remodeled airport. The new airline could be operating by next year if efforts progress smoothly, officials say.

The agreement will be taken to City Council for consideration in March or early April, Luis Elguezabal, the airport's director said on Monday.

"We have spoken to an airline that is interested in serving San Angelo and would provide direct flights to Houston," Elguezabal said. "I can't release the name of the airline yet because it needs to go before City Council first and the company must also receive approval from the Federal Aviation Administration."

Last summer the Development Corporation provided an update which mentioned recruiting Boutique Airlines to provide flights to Houston.  The city has a federal grant with potential incentive money for a new airline.  Stay tuned for the name of the airline and the deal they need to provide service to our region.

City Multiplies Engineering Award: 200% Increase

San Angelo's City Council will hear a proposal to increase the maximum amount it plans to spend on street engineering by $2 million.  Council approved a $1 million indefinite quantity, indefinite delivery contract for engineering services in September 2015.  Staff proposed increasing that to $3 million. 

MedHab Gets Texas Higher Education Grants

Four years ago San Angelo's City Council voted for a $3.6 million economic development package for MedHab LLC.  The money would go toward creating up to 227 jobs.

The Standard Times reported on January 3, 2012:

According to a city memo, its first product will hit the market in Australia in June, "with a launch in the U.S. as soon as they receive final FDA (Food and Drug Administration) approval."

Four years later MedHab remains firmly in the research phase while it continues to raise capital.

Instead of 227 jobs in San Angelo Medhab has 15 company wide.  The company's main address is 1120 South Freeway, Fort Worth.  Data on the number of employees came from a Small Business Innovation Research spreadsheet dated 1-1-2016.  The SBIR website states:

The Small Business Innovation Research (SBIR) program is a highly competitive program that encourages domestic small businesses to engage in Federal Research/Research and Development (R/R&D) that has the potential for commercialization. Through a competitive awards-based program, SBIR enables small businesses to explore their technological potential and provides the incentive to profit from its commercialization. 

Four years ago San Angelo's City Council was sold a "nearly ready" to market product.  Nearly turned out to be a very long time.

City to Outsource Delinquent Water Collections Yet Again

San Angelo's City Council will entertain yet another proposal to help the Water Department ladies with collections.  The background packet for Tuesday's meeting states:

The proposed amendment will modify City Ordinance to allow the utility to turn over delinquent accounts to a third party collection agency and place the burden of the collection fee (20% of unpaid balance) on the collection account instead of the Water Utilities department. The collection agency will also be reporting these owed monies to the credit reporting agencies (i.e. Equifax, etc.)

The City had a similar provider until 2010 when the business folded. The City absorbed all collection cost with the previous provider. Currently, all collections for the Municipal Statement are performed by the Customer Service and Municipal Court departments. There is currently over $2.3 million in collections.

Council approved two other items to help water billing, a customer portal for residents to view their water use (April 2013) and an automated phone payment system (October 2012).  I have not seen any feedback on the impact of these two prior actions by council.

Oddly, staff projected little impact from utilizing a collection agency again.

Financial Impact:
Over $2.3 million currently in collections as handled by Customer Service and Municipal Court.

Placing the collection fee (20% of unpaid balance) on the customer relieves the Water Utilities department of this financial burden.

Who entertains contracting out a service and not projecting results?  How much of the $2.3 million is in water utility bills?  How much did the prior vendor collect percentage-wise from deliquent water accounts?  At what age did the city turn over accounts to the collection agency?  Hopefully, more information will be forthcoming at the Council meeting on Tuesday.

Mayor Morrison historically opposed the $25 late fee charged to citizens as usurious given the average water bill for 2015 was just over $50.  That's nearly a 50% penalty.  I wonder how he'll find an additional 20% collection penalty paid by the citizen user.

A charge will be added to a customer’s account for each delinquent, closed account at the time the account is turned over by the Water Utilities Department to a third party engaged by the City for collection of such accounts in a sum equal to twenty percent (20%) of the total sum payable on the account.

If the account is eight months overdue it could have $200 in late fees.  The simple act of turning that account over to collections would result in an additional $40 penalty solely from late fee charges.  

It will be interesting to hear Council's and the Mayor's take on this item..

Update 1-6-16:  Council denied the 20% add on to the water bill for delinquent accounts but nodded for staff to bring back a contract for a collection agency on over $2.7 million in delinquent water bills.

Update 4-4-17:  City Council briefly considered reducing the $25 late fee but stuck to the current practice of socking it to citizens because the city needs the revenue.