Tuesday, April 30, 2013

San Angelo's Reporting on the Business of Reporting

What did Scripps newpapers not report last December from the UBS Investors Media Conference?  They didn't cover their new paywall plan.  Poynter did:

Newspapers are on the fringe of this year’s annual UBS investors media conference in New York. Still, the meeting has provided a window on growing momentum in the industry for paid digital subscription plans.

E.W. Scripps is late to the paywall party,  announcing just two week ago that after a beta test this year in Memphis, it will roll out paid digital in its 13 other newspaper markets in 2013.

CEO Rich Boehne told me that he has become such a believer that he wants to introduce a version of paid digital content at Scripps’ dozen-plus local television stations as well.  He is not sure of the format yet, but said “we want to give it a try.” That will put Scripps among the first to experiment with paid digital on a broadcast news site.

In his presentation Tuesday, Boehne amplified that he expects the next 12 to 18 months will see most high quality local digital news moving to paid.
Scripps is after a "more balanced revenue pie and an improved bottom line for newspapers."  CEO Rich Boehne said “If you are going to launch a paywall, the content better be good.”  BizJournals reported in November 2012:

Scripps (NYSE: SSP) described it as key to restoring revenue growth in its shrinking newspaper division in a recent conference call with analysts.
The Columbia Journalism Review reported on the growing paywall trend:  Regarding the Standard Times' pricing model, they stated:

And in general, the more you’re asking for, the more coercive you need to be. At a buck or two a month, loyal readers are happy to support you. At $15 or $20 per month, you need to break out the sticks as well as the carrots.
Local citizens should expect sticks and carrots from the Standard Times.  The story concluded:

But all of the paywalls and consultants in the world won’t change the fact that the amount of information freely available on the internet continues to grow very fast, and that the number of people willing to pay for any kind of news online is always going to be a small fraction of the total online news-reading population. As Lacy says, there’s an exciting future for online news—even if the prospects for legacy-burdened newspapers are dim. The paywalls might help with newspapers’ finances. But they’re certainly not going to help make them any more relevant.
San Angelo is but one paper in Scripps system.  I don't expect our Publisher to address this issue in other than the most general terms.  Who should we look to for reporting on the business of reporting?

San Angelo's Newspaper Paradox

San Angelo's Standard Times put more content behind a pay wall, following moves by the New York Times and a number of fellow E.W. Scripps  newspapers.  A letter from the paper's Publisher outlined the move in general terms.

Likely a number of readers came across the new policy in attempting to access content.  Take Angelo State University's putting more courses online.  That story sat behind the new paywall.

Nonpaying citizens accessing free content on GoSanAngelo are referred to as potential customers by the paper's Editor Tim Archuleta.

Potential customers are still able to visit gosanangelo.com for some articles and important headlines. Items such as weather, traffic, AP wire, public safety stories, community listings, calendars and advertising remain available on the site without a subscription.
I'm not sure who goes to the paper's website to find ads.  Surely Scripps projected the impact of this move based on their experience in other markets.  However, it's called Surprising San Angelo for a reason.

Will subscribers pay a premium price for content relative to other Scripps' papers, including one 90 miles up the road?

Other Scripps papers in Texas have the same pricing plan as Abilene:

Time will tell if the paywall profit model works in San Angelo.  

Sunday, April 28, 2013

Citizens Vote When There's Smoke

San Angelo's highest voter turnout in twenty years came in 2010 with a special election on a No Smoking Ordinance and removing the sunset on the 1/2 cent sales tax. 

There hasn't been an election since then.  How might citizens turn out under these circumstances?  Will they have forgotten how to exercise their right to choose political leaders?  Or will they turn out in droves for the chance to send new blood into Council chambers? 

If memory serves me correctly J.W. Lown surprised San Angelo insider Jim Hughes in 2003.  That happened with 13% of citizens voting, just under the average pictured of 16%.  If it happens once a decade, an election upset is due. 

Mayoral Forum at Chicken Farm

The Chicken Farm Art Center hosted a Mayoral Forum Wednesday evening.  Concerns expressed included water, the appropriate use of hotel occupancy tax money, children's advocacy, and the information city staff provides for Council and the public.  Later in the session a worry emerged on how the oil boom would distort our beloved community on so many fronts.

Organizer Allie Devereaux kindly allowed me to ask a question:

When there's an issue of public concern and city managers state they'll conduct an internal investigation, like the Furniture Fiasco or a rash of incomprehensible water bills, what is your position on sharing the results of that investigation with the public?

Essentially all three said they'd not gotten answers to the examples cited and each said they would share the results of any investigations with the public. Councilman Dwain Morrison emphatically stated he wants an investigation of the water department.  "If there's $2 million annually in the water fund that could be used to fix our streets and we're not giving money back to the citizens, something's terribly wrong."  Councilman Paul Alexander said he voted for the investigation, while Councilman Kendall Hirshfeld did not. 

The water fund came to the city's rescue in 2011.  Compare these two characterizations:

1.  "Capital projects Funding - excess fund balance was transferred to a capital projects fund to assist paying for needed improvements.". - in presentation by Assistant City Manager Michael Dane at April 16, 2013 Council meeting.

2.  "In fiscal 2011, the city supplemented its general fund with a $3.5 million one-time transfer from the water and sewer utility, which helped boost general fund reserves back to 21% of spending and within the city's policy level." Source:  City of San Angelo debt rating by Fitch Ratings March 2013

These are clearly two different representations.  Which do you find more informative?

I did get a bonus question, later in the session.  I asked about regional water use in light of fracking, given Eagle Ford Shale wells use 3.5 million gallons of water per well and the increased regional water burden was 5-7%.  I stated as an avid windsurfer, I'd like there to be water in area lakes on which to sailboard.

Dwain Morrison talked about the aquifer in North San Angelo declining, with the prospect of people losing their well water.  He spoke of huge tanks north of town where there are no restrictions on ranchers selling water to oil companies.  He noted the rains would come, but he didn't know when and he's worried about people in San Angelo running out of water.

Paul Alexander spoke of seepage loss through Lake Nasworthy's dam and evaporation loss at Twin Buttes. He continued with his theory of raising the North Pool five feet.  That didn't materialize last summer and there's no evidence of increase this year after 10 days of pumping.

Councilman Hirschfeld said regional water use belonged to Rep. Drew Darby and the State of Texas.  The City of San Angelo has no control over water use outside city limits.

Two other issues simmered during the meeting.  One dealt with the minimalist approach paid city staff seems to take with Council.  It's not clear if staff is intentionally keeping information away from council or if staff actually don't know what's going on.   Ignorance is only a tad more reassuring than mendacity.   Both are deeply disturbing.

The second dealt with a financial time bomb, one council is not talking about.  While this issue wasn't expressly identified, one bomb is the city pension fund.  , According to Fitch (the city's bond rating agency).

The city's actual payments to the pension plan have been about $1 million less than the actuarial required contribution in the last two reported years, so actual spending was somewhat below this level. 

Add the need to pre-fund retiree health insurance and a huge bill will come due in the next Mayor's term.  My prediction is San Angelo will sell their water franchise to fund these two items.  I wouldn't be surprised to see our local patriarchs as equity owners in such a venture.  Might two Mayors in a row have a significant stake in an entity doing business with/receiving funds from the City?  The bomb could also be the expense of operationalizing San Angelo's next water supply, i.e. post Hickory Aquifer. 

I would like to compliment all three candidates on their genuine responses and positive interactions with their competitors.   If Councilman Paul Alexander inspires you, imagine that energy focused citywide.  If you like Mayor Alvin New, Kendall Hirschfeld will fill his Italian leather shoes nicely.  If you loved Mayor J.W. Lown, Dwain Morrison promised to beat his record of public appearances as Mayor.   I encourage everyone to vote their heart and mind. 

Update 6-16-13:  Councilman Morrison won the runoff race, beating Councilman Hirschfeld.   J.W. staged an upset win and Morrison followed.  It looks like the people will be heard. 

Tuesday, April 23, 2013

COSA's Immunization Fee to Rise Nearly 50%

The City of San Angelo's new immunization fee will increase nearly 50% on June 1st.  The current fee paid under the Texas Vaccine for Children program is $14.85 for one immunization and $15 for more than one.  The new fee will be $22.06 for one or more immunizations.  The $7.21 increase is a 48.5% rise.

In the last budget cycle Council drastically cut the availability of Immunization services, contributing to our area's worse than normal flu outbreak.

In 2008-2009 the City Health Department provided over 7.600 immunizations.  They project to administer a mere 2,300 this year.  That's a 70% decline.

City leaders turned immunizations, the most basic and cost effective of public health services, into a scarce service.  Their next step is to make immunizations more expensive.  In which City Council meeting was this approved?

Update 4-25-13:  Council implicitly approved a price increase with its 2012-13 budget.  Here's my take last fall:  "City Council expects the health department to make 50% of the revenue it budgeted last year for injections, STD clinic and immunizations.  The amount isn't significant, but I find it odd an 80% reduction in availability should only reduce revenue 50%.  I'd expect revenue to drop more than 80% as the public writes off the city for any form of primary or preventive health care services."

Monday, April 22, 2013

Mayor New: Hero or Goat on Water?

The Abilene Reporter-News reported on a Texas Legislative hearing on Climate Change.  Our mayor testified during this session.

San Angelo Mayor Alvin New testified about the hardships related to the evaporation loss of surface water in reservoirs under the influence of increasing heat. His city of 95,000 is 100 percent dependent on that surface water until a project is completed to bring water from a distant aquifer into the drinking water supply of San Angelo.

Livestock has suffered, and herds are being decimated. New noted that because of the scarcity of available cattle in the area, a packing plant recently had shut down, affecting 200 jobs; although the operation was bought by an out-of-town company that intends to reopen it.

“These things do have actual, boots-on-the-ground consequences,” New said.
Step back to the City's pumping of the South Pool during last summer's brutal heat.  Water Chief Will Wilde sold the pumping job with predictions of no loss for evaporation or seepage.   Neither the Mayor nor Council challenged the plan's lofty assumptions. They later learned the significant losses from seepage and evaporation

This was information new Water Chief Ricky Dickson seemed to think wasn't in existence.  One might expect the new guy to peruse Council presentations on water topics in the last year.  Council members treat Dickson with kid gloves, at least that's my take.

New will be judged by his Jeckyll-Hyde approach to conservation-selling water for money.  After Hickory comes on line, he'll be judged by the radioactivity readings.

Sunday, April 21, 2013

Backdrop fo Councilman Morrison's Question on Water Rebates

Nearly six years ago Fitch Ratings had this to say about the City of San Angelo's general obligation bonds:

Fitch noted in a statement issued through Business Wire that next week about $45 million worth of the now-upgraded San Angelo general obligation bonds and certificates of obligation are scheduled to go on sale through an offering led by RBC Capital Markets. The proceeds will be used on the city’s ailing water and sewer systems and other public works projects.

“The rating upgrade to AA reflects the city’s sound financial profile and steady economic growth, as well as recent capital and debt-related developments at the city, including the initial adoption of a formal capital improvement plan and utility rate hikes that are expected to provide more than $5 million annual for system improvements and should minimize future borrowings,” Fitch said.

The city recently enacted substantial increases in water and sewer rates.
Since then the City issued $148 million in water related debt, which required another round of utility rate hikes.   So much for minimizing future borrowings. 

 Water revenue soared with the 2011 rate increases.

This is the backdrop for Councilman Morrison's asking about the Water Operating Fund and why there never seems to be money available to return to citizens.  At the last Council meeting Assistant City Manager/Chief Financial Officer Michael Dane cited seasonality in water revenues, yet he never showed any data or graphs.  He did cite his concerns over the expected March fund balance.being a mere $122,000.  This raised questions in my mind, which I researched using the last three City Operating budgets.

Did you know the Water Operating Expense budget was revised $800,000 higher last year and City Council said nothing?  My guess is they didn't know about it.

Who knew Water Utilities Administration transfers out roughly $2.5 million a year?  To where?  Was this Will Wilde's kitty to do with as he pleased?

The City's various Water buckets have transfers in and transfers out.  Another transfer out is from the Water Operating Fund, the source of possible citizen rebates.  Last fiscal year it stood at $5.4 million and is a projected $6.1 million for the current year.  Those transfers did not exist in the past and were not mentioned by Dane when he cited the paltry $122,000. 

The public saw ex-Water Chief Will Wilde retire under a firestorm of ethical concerns.  Water revenue grew by orders of magnitude under Will's tenure.  Financial malfeasance occurs when someone has unilateral control over money, i.e. there are no checks and balances.

Mayor Alvin New and three other council members see the annual financial audit as an endorsement that no wrongdoing has occurred.  Yet, most financial crimes aren't exposed by an annual accounting audit.  They're revealed by a whistle blower or the perpetrator's hubris, which led to a mistake.  Wilde had hubris in spades, as evidenced by the Furniture Fiasco and his son being fired for poor performance by the City, then working on the Hickory Pipeline for handsome contract wages.

Citizens didn't get the results of the promised Furniture Fiasco investigation.  At the last Council meeting Councilman Alexander stated there were no results from the investigation into huge, seemingly illogical water bills.  The outcome of the Mayoral and City Council election will determine if these concerns are addressed or not.  It it's Mayor Morrison, City Manager Daniel Valenzuela and CFO Michael Dane have more research in store.

Saturday, April 20, 2013

MedHab & North Texas

Texas Congressman Sam Johnson met with MedHab CEO Johnny Ross in early March. Rep. Johnson posted on his Facebook page, saying:

Thank you for all that you do in helping make Texas, particularly North Texas bigger and better!
MedHab is in the midst of its third private capital raise.  Might the State of Texas supply more nondebt, nonequity capital, i.e. subsidy, to MedHab?  The City of San Angelo will serve as MedHab's production site for its FDA approved medical device   Production for the novelty sporting device will occur elsewhere.   Will that be in Rep. San Johnon's district?  

We might find out when San Angelo City Council gets their MedHab update, requested by Councilman Johnny Silvas at the last meeting.  Ironically, Mayor Alvin New could've turned on his microphone and quickly done so, given he sits on MedHab's Board of Directors.  Citizens will dutifully wait for the update.  I hope it occurs before Mayor New steps down.   

The next City Council meeting is May 14, the day before MedHab's shot at presenting to Cowtown Angel Investors.  Johnny Ross has a vision to sell, but he also has commitments to fulfill.  An update is the least Ross can do, given MedHab's robust economic incentive package.

Update 4-21-13:  Mayor Alvin New stated he did not want another City Council meeting prior to the election.   I wonder how the MedHab update factored in this desire.

Sunday, April 14, 2013

Pumps Back at South Pool

Gajeske's pumps are back in place at Twin Buttes South Pool.  The City has restricted access to the public.  It remains to be seen if the Responsible User program will be implemented at the South Pool as suggested in public meetings.  City Council will consider the Twin Buttes Recreation Master Plan at an upcoming meeting.

Twin Buttes lake levels are similar to last summer when the City began pumping the South Pool.  City leaders indicated they took 9 feet out of the South Pool.  It didn't seem like that much, given the North Pool never rose a foot, much less the five feet promised by officials. 

The picture above is last year's setup.  Three pumps returned, but this year there's only one Silent King.  Last year there were two.  Rumors have the city installing more pumps, which I find hard to believe.  The City pumped nine feet between August 1 and October 14.  If they add more the South Pool could be a puddle by mid Summer.

It'll be interesting to hear what's presented at City Council on Tuesday.  There may be a new Drought level and report on pumping plans.

Update 4-16-13:  Two of the three pumps are running as of yesterday, according to Water Chief Ricky Dickson

Saturday, April 13, 2013

New Water Chief's Debut Meeting

Interim Water Utilities Director Ricky Dickson offered the following information in the February 21, 2013 City Council packet.

Neptune N Sight IQ Software
Financial Impact:  No hardware required by City
Presentation:  None

At the time I found this grossly inadequate, given vendors don't generally demo their software for free. However, Council deferred this item.  I presumed when it returned to the agenda, there would be more meat to the proposal (similar to the City's "new website" presentation). 

On March 21 Dickson lost the Interim designation, becoming San Angelo's Water Utilities Director.  Neptune N Sight IQ Software returned to Council's agenda for April 2, 2013. The information was the exact same, as was Dickson's title on screen:

Neptune N Sight IQ Software
Financial Impact:  No hardware required by City
Presentation:  None
Dickson joked that Neptune had a several hour demonstration, that could run until 2:30 pm.  After a simple demonstration of the web product's ability to show a water user's history, Ricky finally revealed the project's cost to the city, roughly $15,000 a year in perpetuity.

Councilman Dwain Morrison raised the issue of promised functionality, which can be seen in the City's press release on the new electronic water meters from October 2010:

Workers are installing an electronic register on the water meters, which sends readings to a radio interface unit in the meter box. Those readings are then transmitted through a data-collection system to the Utilities Billing Office. With the new system, meter readings are obtained daily for each account. The daily readings include the amount of water used each hour during the previous day, which will assist the City and residents in researching unusual water usage patterns that may result from leaks or malfunctioning sprinkler systems. 

It was surreal watching City Council members state the cause of the unusually high water meter readings had not been investigated, thus they don't know if the problem is solved.  Wasn't this the very purpose of the automated water meters? 

Johnny Silvas asked if Neptune was part of the contract when the city made the purchase on June 1. 2010.  Here's Ricky's response:

I believe the software was part of the program for the utility, or our usage.  I cannot speak of, if the customer portal portion was part of that agreement.

So our new Water Utilities Director, who previously had responsibility for overseeing the installation of the new water meters, has no idea if this was or wasn't included in the original contract?

As for installation, the original press release stated all meters would be fitted by 2014.   This date has been pushed back to sometime during 2015.  Dickson stated the installation was 63% complete.

There was one question I wish had been asked.  What percent of the AMR's are functioning on a daily basis, i.e. where readings are sent and received by the system?  What's the failure to connect and record rate?  What does the water department do in situations where the meter cannot deliver the promised information?

For those paying attention, City Council approved two $15,000 annual fees for citizens to get their water consumption history, one via an automated phone system and the other via the internet.  The City will spend $30,000 annually to help out the "customer service ladies," who Dickson stated answer 4,000 calls a month.  That's up from 1,750 a month as stated in the city's RFP.

Water purchasers will get an automated phone answering system that takes credit/debit cards, much like an online retailer.

A study of online retailers' phone systems revealed:
The study reveals that 71% of shoppers become extremely frustrated while waiting, and 67% will hang up without resolving their issues. People want a high touch, human experience when they’ve got problems.

It remains to be seen if water department problems are resolved or if customer service actually improves.  At least the customer service ladies will get help.

Update 5-27-14:  The new system starts Monday June 2, 2014.

Wednesday, April 10, 2013

MedHab to Pitch to Cowtown Angels?

MedHab is a finalist for Tech Fort Worth's annual Impact Awards, which will afford will the "opportunity to pitch to angel investors from Cowtown Angels, the North Texas Angel Network and other investors on June 20."

MedHab has patented technology in the medical device field, affording medical care prescribers (Orthopedic Surgeon and/or physical therapist) the ability to customize the rehabilitation protocol to meet each patient’s needs. StepRite® is a wearable device that has the capability to measure body weight, pressure, gait, flexibility and thermal sensing of lower extremities using pressure sensing and accelerometer technology.

MedHab was an Impact Awards finalist in 2011.  That was two company logos ago.  What new will MedHab share on FDA approval and Medicare/Medicaid approval for payment?  Those answers would shed light on actual production beginning, which might shed light on actual jobs coming to San Angelo, as promised.