San Angelo's Economy: Expansion & Layoff

San Angelo's economic contraction occurred shortly after its rapid expansion.  Energy companies dominate the list of layoffs/closings after comprising a good chunk of corporate expansions during 2013-2014.

Half cent sales tax proceeds dropped 8% year over year for November.  Those are a few of the statistics in the Development Corporation's December board packet.

Funding San Angelo's Development Corporation

The City of San Angelo Development Corporation is funded by the half cent sales tax, which had been in decline for five of the last six months.  The first month of the new fiscal year found sales tax collections down over 14%.  COSADC expected sales tax revenues nearly $50,000 higher than occurred.

The oilfield bust came home in November when National Oilwell Varco announced it would leave San Angelo eliminating 120 jobs.  The price for a barrel of oil hits the lowest mark since February 2009.  Oil drilling rig counts continue dropping.

City Council recently asked COSADC Executive Director Roland Pena to explain the addition of a new staff member.  What will happen if sales tax revenues continue to fall far short of budget? 

Update 12-12-15:  November sales tax proceeds for COSADC came in (8.02)% below last year.  The estimated sales tax budget is short $137,077 and the budget called for a slight decline.  Sales tax collections are roughly $175,000 below a year ago.

City Council Enacts Plan for 55% Water Rate Increase

City Council discussed a 55% water rate increase over a five year period, approving an initial 11.5% increase in rates for 2016.  Some Council members seemed unclear as to recent water bill increases, a 48% rise in 2011 to fund the Hickory pipeline and the later addition of stormwater and pumping fees.

Four years ago City Council was clear on their motivation.

Citing a desire to encourage conservation, council decided to generate 75 percent of the revenue needed to make payments by increasing water usage rates by $1.31 per 1,000 gallons and 25 percent of the revenue needed to make payments by increasing the base usage rate by 29 percent.

Citizens responded to council's directive cutting the average usage from 8,000 gallons per month to 4,000.  Assistant City Manager/CFO Michael Dane spoke to this possibility in 2011,

As residents cut back on water use, especially as water usage restrictions have tightened under the city's drought contingency plan, Dane said, sufficient revenue to pay for the debt service payment may not be generated, which would result in the city having to impose even higher rate increases.

"That's a wild card," Dane said of "how strong the water consumer reaction is" to cutbacks and drought.

If citizens cut back usage so dramatically why is the average water bill higher than projected in 2011? 

How did the 2011 water rate increase multiply beyond what staff projected?
 

How might Council's new promises look in five years?

It's hard to have confidence in a group that can't or won't explain why the last round of fee increases hit citizens harder in the pocketbook than promised.  This is our future.

What will bills and usage look like come 2020?  The "Dane prediction" happened once. Could it happen again?

Update 6-24-20:   Many Americans can no longer afford water due to price increases over the last decade. 

City Goes Logomania

San Angelo City Council will consider allowing citizens to vote on new proposed logos to use for city business.  It's not clear if the current logo will be a possible vote.  Citizens kept an elected police chief.  What might they do with a logo?

Update 1-6-16:  The tally is in and the new logo is the city's old logo!

Water Bills Higher Despite Conservation

The City of San Angelo held a water rate forum Tuesday evening.  One slide showed the city's average water bill.

I wondered how the current average bill compared to the last time the City raised water rates in 2011.

Stormwater and Pumping fees were added since 2011.  It's been eighteen months since the city employed pumps at Twin Buttes to move water. The city has numerous buckets through which it moves water monies.

There are discrepancies between more than the last water rate increase and the current average water bill.  The City's Comprehensive Annual Financial Report (CAFR) for the last three years shows more water revenues and less water expenses than the consultant's figures.  These differences should be explained to the interested public.

I found it interesting that citizens cut their water use by 50% since 2011.  What assumptions does this study have for people responding to the conservation incentives highlighted in the session's question and answer period?  If citizens cut water use the last time fees rose dramatically might they do so again? 

San Angelo's Sales Tax Picture

San Angelo received less sales tax money than the prior year in six of the last seven months.  The decline accelerated in October to double digits.  San Angelo's Development Corporation board packets paint a different picture than San Angelo Live's piece based on a Chamber of Commerce interview.  What's a few months among friends?

Update 11-19-15:  The employment picture got bleaker with the loss of 120 jobs from National Oilwell Varco by the end of January 2016.  The multiplier effect cuts both ways. 

Water Rate Increase: Study Data vs CAFR

Raftelis Financial Consultants' water revenue and expense data does not match the water revenue and expense information in the City of San Angelo's award winning Comprehensive Annual Financial Reports(CAFR) for the last three fiscal years, 2012-2014.

The 2012 CAFR shows considerably more revenue for the water fund, some $5 million more than Raftelis' data.

It also reveals a healthy water net income of nearly $8.5 million, way more than would be inferred by looking at Raftelis' two charts.

The 2013 CAFR shows the impact of the drought on water revenues, down $2 million from the prior year.

Water net income fell by half from 2012.

The water revenue situation held stable according to the 2014 CAFR.

 But water net income rebounded to nearly $10 million, the largest net margin of the three years.
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The $5 million gap in 2014 expenses, Raftelis $20 million vs. the CAFR's $15.5 million, raises questions as to why the significant difference?

There is no 2015 CAFR to view as the fiscal year just ended.  The city does not post its preliminary annual financial statements or cover how the city closed out the year with Council.  Thus there is nothing for the public to view.

There are significant differences in the water revenue and expense pictures between Raftelis and the city's award winning audited financial statements. 

“This recognition should give our citizens a high degree of confidence that the City of San Angelo manages their tax dollars efficiently, effectively and transparently,” Finance Director Tina Carriger said. “That is always the aim of the Finance Department and all of the other City operations with which we work.”

I hoped Water Chief Bill Riley would speak to these differences in his November 3rd presentation to council.  He didn't, but maybe he will.

Update 11-19-15:  SanAngeloLive reported few citizens turned out for the initial public meeting to explain water rate increases.