Saturday, November 18, 2017

Water Fund Dries Up: No Rebates Again for Citizens

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A cold, dry wind blew $2.2 million from the City of San Angelo's main water fund.  It went from nearly $5.8 million as of September 30th to $3.6 million, according to city finance staff.

The Water Operations Fund estimated fund balance (after estimated year-end adjustments and carryovers) as of September 30, 2017, is $3,585,477 (unaudited).
The memo to City Council refers to a fund that does not exist in accounting documents.


What does exist is the Water Enterprise Fund.  As of 9-30-17 it showed:


The first question is what happened to the $2.2 million?  Staff should clearly explain any adjustments or carryovers to Council and the public.

The goal for the water operations fund is 75 days of expense budget, or $4,781,532.
The goal is to have 75 days cash to meet operating expenses, which came in at $18.8 million for 2016-2017.  The city's water enterprise budget was $4.5 million higher than it actually spent.

Council could consider a different analysis using the City's Bluebook numbers, one that would produce a small rebate for customers.


This is an accounting discussion that involves operational definitions, what numbers mean and how they are figured. City Council's tacking this item will be informative for citizens.

The water rebate comes after two other water related items, raising the deposit for an account by 186% to $100 for most new users and charging 18% interest on late bills.  These are items G and H on the regular agenda.  The water rebate is item L, the last item on the regular agenda.

Most citizens don't have time to show up to council to share their thoughts, especially for items at the end of the regular agenda.  Should any of these issues be important to you please contact your city council person.

Update 11-24-17:  Members of City Council asked no questions on this topic.  Their silence can be viewed here starting at 1:51:25..

Wednesday, November 08, 2017

Council Voted to Increase Water Deposit 186%


San Angelo City Council voted unanimously to raise the water deposit from $35 to $100 for the water meter used by 82% of its customers.  The increased deposit would only apply to new customers.  It would not impact existing users, according to city staff.

Citizens endured repeated large increases in water bills for the past decade, as rates increased multiple times and new fees were added.  Staff said the logic in charging larger deposits was to reduce deadbeat customers.  Yet, the city sends only 2.2% of its annual water revenue to collections each year.


Staff did not share that the city's water fund of $5.7 million is way over its $3.1 million budget.  Citizens funded $2.6 million or 84% more than the city planned.

Five years ago Council entertained a water rebate in its first meeting in November.  This Council nearly tripled the water deposit for most new customers.

The twisted part of the presentation involved using other aspects of the utility bill, sewer, trash and stormwater to push for the higher deposit.


Between the four operating funds the city has over $21.5 million in fund balance as of 9-30-17.  None of this was shared with City Council before it voted to raise the deposit significantly.  Fiscal year end numbers were available as they were shared with the Development Corporation on October 25th.

One has to dig to get the wider story from City Hall.  I'm not sure our current council likes to get their hands dirty.  Thanks to them new water customers will write much bigger deposit checks come January 1.

Sunday, November 05, 2017

Year End Financials Late to City Council


City of San Angelo Finance Director Tina Diershke presented year end financial statements to the Development Corporation on 10-25-17.  Staff will not have that information for City Council on Tuesday, even thought their meeting comes nearly two weeks after the Development Corporation.

Why might this be important?  Citizens expressed concerns about expensive water and trash bills to elected officials.  Several councilpersons seemed interest in current fund balances for those funds during at least one budget meeting.  City staff avoided direct questions and offered nearly year old budget projections vs. actual year to date figures.

November is the time City Council entertains a water bill rebate.  It won't be November 7th. 

Saturday, November 04, 2017

Citizen Water Rebate Not on Council Agenda for 11-7-17


Five years ago City Council discussed a customer water rebate during their first meeting in November (11-6-12).  That topic is not on the agenda for the November 7, 2017 Council meeting.  With one month left in the fiscal year the city held $4.6 million in the main Water fund.  That should be up significantly given September water revenue was nearly $2.6 million. 

Wednesday, November 01, 2017

Water Chief Riley to Retire


The City of San Angelo announced:

Water Utilities Director Bill Riley is retiring from the City of San Angelo, effective Dec. 8.  Riley joined the City in December 2014.
The City spent huge amounts on various consultants during Riley's term as Water Chief.

Prior to joining the City, Riley served as president and general partner of Water Resources Management, LLC, a consulting firm that assisted water utilities with developing strategies for a broad spectrum of operational, management, financial and resource challenges. From 1991-2000, he served as the water/wastewater utilities manager in College Station, where he began his career in 1983. From 2000-02, Riley managed the water and wastewater consulting practice of Reed, Stowe & Yanke, providing financial, management and operations guidance to public sector clients.
Executive Director of Public Works Ricky Dickson waived the licensed engineer requirement to hire Riley.  I can't recall the last time Dickson made a public presentation to the Water Board or City Council.  Might he do so on Riley's replacement?

Saturday, October 28, 2017

Development Corp Gets $6 million Bill from City


Finance Director Tina Diershke presented a bill of $2,380,000 to the Development Corporation board on Wednesday.  She explained, "When we did the bond refunding in 2012 for some reason it was not properly allocated to the Development Corporation." Nor was it budgeted for the Development Corporation's debt service.  Dierschke said the bill would be $1.4 million per year for the next three years.

The timing is ironic for two reasons.  First, the news comes as the city nears the end of the first month in its new fiscal year.  The second irony is the board approved a $578,000 annual agreement for city services.  The agreement states the city will:

Provide financial analysis and projections on available funds, sales tax trends, bonding capacity, and voter-approved project, as requested by COSADC Board.

Determine allocation of cost of services for COSADC budget as part of the indirect costs contract with consultant or other comparable means, . 

Assist COSADC staff in the preparation of the annual COSADC budget

Audit COSADC agreements, administrative files and financial records for compliance with relevant requirements and regulations. 
The Development Corporation board pays an annual fee for city management services.  Management owes this board a reason for the $6 million miss which lingered over five years of fiscal audits and city budgets.

Consider the language from the City's 2013-2014 budget:

General Debt Service Fund
This fund is used to repay the principal and interest on debt. For fiscal year 2014, $.08 of the property tax rate is designated for this fund. This year, approximately 54% of total revenue collected comes from both current and delinquent property tax collections and 46% reflects transfers from the Development Corporation to service the debt for type B sales tax community development capital projects. The remaining revenue is interest. Debt requirements change from year to year and activity in this fund will vary accordingly.
The city went through four more budget cycles with catching the error.  It had five external audits that also missed the error.

The City of San Angelo’s Finance Department has for the fourth straight year earned the Certificate of Achievement for Excellence in Financial Reporting for its 2016 comprehensive annual financial report.
The Development Corporation Board will take up a budget amendment to fix for the five year budget/audit error.  A number of board members were less than happy with the surprise development.

This is a quality of service issue as the error could have been caught during budget preparation or the annual audit. At least ten error catching opportunities were missed over the last five years.  The Development Corporation paid the city over $1.3 million for administrative support services for the last three of the five years.

In their last meeting the Development Corporation approved buying the city's illegal dump site for future economic development and endorsed a city services agreement that is 23% higher than two years ago.  For one meeting it looked as if the Development Corporation got dumped on by the city.

City leaders owe this board a clear and thorough investigation/analysis, not a strong suit for City Manager Daniel Valenzuela 

Monday, October 23, 2017

City Bill for Development Corp Balloons


The City of San Angelo Development Corporation will consider approving an agreement with the City of San Angelo for administrative services.  The proposed amount for FY 2018 is nearly $580,000.  That's up over $100,000 in two short years.

$578,088 - 2018
$513,677 - 2017
$471,273 - 2016
That's a 23% increase over the 2016 rate.  The Development Corporation board will undertake this item nearly one month into FY 2018.

The City of San Angelo operates under the speed of billing.