Saturday, January 25, 2014

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


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.



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)

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