Monday, June 30, 2014

Unauthorized Billing Characterized as Bidder Animosity

The Standard Times news team boiled legitimate concerns about Republic Services' unjust enrichment from commercial customers as animosity from a sore loser.  In contrast the paper's editorial staff called for a delay in approving the new trash/landfill contract so long term, unauthorized billing concerns could be properly investigated and addressed.

City Manager Daniel Valenzuela anticipates contract approval tomorrow.  Daniel believes Republic can investigate itself and will do the right thing. 

There is no evidence the city ever audited Republic's bills to insure they were in compliance with the contract and city ordinance.  

The city lacked contractually required documents on complaints made to Republic for the last five years.  The contract specified this information would be submitted annually.  

I expect tomorrow's council meeting to be like Daniel's first, which included the unauthorized purchase of over $100,000 in furniture for the Water Department.   That act violated city purchasing policies and state law.

Valenzuela promised a thorough investigation which did not include interviewing two of the major players in the Furniture Fiasco, Interim City Manager Michael Dane and former Assistant City Manager Elizabeth Grindstaff.  Both will be in council chambers tomorrow for the trash/landfill contract decision.  City Councilwoman Grindstaff will vote on the matter.

Nearly two years ago Council decided they were in a tough spot and needed to approve the furniture purchase to help the local vendor,as the furniture had been delivered and installed. Similar charity has the city, which owns the commercial waste franchise, allowing Republic to investigate itself and refund overcharges, seemingly without penalty.

The City failed to ensure Republic Services lived up to their expiring contract, yet they deserve a new ten year deal?

Both waste collection and the landfill are city's franchise to govern.  Staff proved their unwillingness or inability to hold Republic to their obligations, therefore City Council should.

That may be a different level of animosity, seen in City Councilman Rodney Fleming's interaction with Valenzuela two meetings prior.  Might that have been over Republic's long term overcharging of commercial customers?  Some think so.

Fireworks could come early this year.  Look for them in Council Chambers on July 1, especially if overcharged commercial customers turn out in droves.  They may wish to do business with someone who didn't overcharge them over a fourteen year period.  And they may not trust the city that allowed that to happen.

Saturday, June 28, 2014

City to Hold "Unauthorized Trash Fee" Cleanup

San Angelo's City Council will cleanup years worth of unauthorized commercial collections by trash hauler Republic Services-Trashaway.  They will do so by executing a series of moves.

First, Republic has the opportunity to identify "incorrect charges" that occurred over a decade and refund those amounts to commercial customers.  It's the city's responsibility under the contract to ensure Republic lived up to its promises and legal obligations.  Estimates of Republic's unauthorized commercial charges are as high as $9 million. 

Second, City Council will entertain a ten year contract with Republic for the city's trash hauling franchise.  Using the example in the draft contract Republic's fees will go from $10.30 to $14.47 for basic residential service, an increase of $4.17 per month.  This 40.4% increase doesn't include City Sales Tax, currently 85 cents on top of the $10.30.

Third, Council will likely award Republic a contract to operate the landfill for its remaining life.  Republic leases the landfill and operates it as a regional profit making venture.  The company's profit grew by putting more trash in our regional landfill, consistently reducing its projected life.  Last meeting Council approved construction of a new landfill Cell 11A at a cost of $445,000.  Republic will purchase Cell 11A's airspace, not to exceed $1.3 million.  The annual landfill lease payment is roughly $575,000 a year for ten years.

Fourth, the City's legal department stands behind the first three moves.  Items 2 and 3 were approved by Legal on 6-27-14.  A common risk management move is to act like nothing is untoward and admit nothing publicly.  This is why the city has an unwritten internal investigation that will not be shared.  This morning a Standard Times editorial found this lack of transparency odious.

Fifth, after approving new contracts for trash collection and landfill operation Council will wipe out the old fee ordinances, including dropping the language "commercial rates" for "non-residential service charges."

The City of San Angelo bears responsibility for its proceeds from unapproved fees, 4% of any total.  The City awarded the franchise to Republic, later providing little to no oversight in key areas.  Language and actions along the way indicated the City's determination to retain Republic.

The final move in that strategy should come Tuesday with a well coordinated Republic cleanup.  The only thing that might get in the way is the will of overcharged commercial, I mean non-residential customers.  It should be an interesting meeting.

Update 6-30-14:  San Angelo Live pegged the monthly trash collection price increase at 48%.  With property valuations soaring and a water rate increase on the way, citizen's pocketbooks could take a hit on multiple fronts.

Update 7-1-14:   The cleanup is complete with all five strategies executed by City Council in a 4-3 vote.

Friday, June 27, 2014

Republic Freed to Review "Incorrect Fees"

The Standard Times and San Angelo Live reported that Republic Services issued a press release on "corrections to billing statements affecting commercial customers."  The City of San Angelo granted Republic an exclusive franchise for commercial waste hauling under a 2004 contract.  The City failed to review Republic's compliance with city ordinance specifying approved fees and aspects of the contract, including annual submission of complaints to city staff.

This investigation is the City's to conduct.  Republic's sole role should be a willing provider of complete information.  As the city has a 4% liability for any overcharges, it also could want this to disappear.

City Council serves in a governance role and should ensure a third party investigation is conducted.  That investigation should go beyond a review of accounts and amounts to be refunded.  It needs to explore internal documents related to unapproved fees, at Republic and within city staff.  Ricky Dickson supervised trash collection and the landfill in his former role as Operations Director.  He and other key staff should be interviewed, as should Republic Services' leaders.

Once the investigation is complete and made public, Council will be in a position to make an appropriate decision about a long term landfill operation-trash collection contract.  The City has been "hands off" the Republic contract for far too long.  Allowing Republic to conduct the investigation and determine refunds would be yet another abdication of responsibility.

Open and honest leadership isn't easy.  It means seeking an outside opinion when governance isn't in a position to assess as the city itself has a portion of any liability and staff have proven their ineffectiveness.  Any accounting should be forensic in nature.  City Council should engage the investigating firm and directly hear its report, later sharing that with the public.

Republic Services current language is that of minimization.  Their statement frequently cites "incorrect fees."  Other words that could apply, based on investigation results, include unauthorized, unapproved, illegal or fraudulent. 

"we apologize for any inconvenience that this situation may have caused for our commercial customers"

How is long term financial harm an inconvenience?

The issue came to light in April and Republic hadn't stopped charging these fees as of their last billing cycle.  The press release failed to mention the company's current stance on fees not approved by City Council and not in compliance with city ordinances.  Will they continue to be billed or has Republic stopped them?

City Council's allowing Republic to take the lead and investigate itself is a failure of leadership.  Like the Furniture Fiasco it doesn't pass the smell test.  That hapless investigation should not be a model for this grave issue.  The stakes are much higher, $9 million vs. $100,000.  In both cases parties exceeded their legal authority.  A prior council tried to bury the first.  I hope this one does better.

Thursday, June 26, 2014

City Budget to Squeeze Area Citizens?

Budget Director Morgan Chegwidden's City Council presentation on June 17th utilized Council priorities from the strategic planning session at Fort Chadbourne.  They include: 

  • Water infrastructure and long term water supply
  • Streets: renewed infrastructure
  • Salaries: adjustment to market
  • Improved development process
  • Police station: replace with new or refurbished

Morgan's presentation included original 2013-14 budget projections and proposed 2014-2015.  The city did not incorporate the city's 2013-14 year-to-date experience.  To the extent there are a number of major changes, like employee health insurance, this presentation could hide significant swings, positive and negative.

Taxes are projected to rise by 8% sales tax and 4.7% property taxes.  Tom Green County- property valuations are up an average of 14% for residential and 28% commercial.  Tom Green County property valuations increased from $3.8 billion to $4.8 billion, an increase of $1 billion. That's a whopping 26.3% increase in property valuations.

Water revenue is budgeted flat from 2013-2014.  Water Chief Ricky Dickson recently said he was 53% of his revenue budget when he normally would be at 57%.  That means revenue is behind nearly $800,000.

Finance Director Tina Bunnell City said fund 260 is at a negative $2.4 million in expenditures with encumbrances, but the water sales season is starting.  Assistant City Manager/Chief Financial Officer Michael Dane stated If the City keeps Drought Level 2 status it will need to raise rates significantly to hit the current revenue projection.

Personnel for police is down nearly $270,000.  Personnel expenses are expected to be lower due to turnover, higher paid employees leaving, and positions sitting unfilled for extended periods of time.  The personnel budget did not include wage or benefit increases.

The finance department projects it will have $1.5 million available to address council priorities:

  • Water – $3,000,000 operating, capital need depends on pace
  • Streets -- $7,500,000, additional capital need depends on pace
  • Employee salaries -- $1,862,283
  • Meet and Confer -- to be determined
  • Improved development process -- to be determined
  • Police station -- $5,000,000
  • Services lacking adequate staff or expenses
  • Health insurance -- 12-14% increase $750,000 

The $1.8 million salary increase is 5% raise across the board.  Staff finally mentioned health insurance and project a 12-14% increase or $750,000.  Council discussed having a separate budget work session.  The first state imposed budget deadline is August 5th. 

Water fees will return to City Council's agenda on July 1 as will the Water Advisory Board.  City Councilwoman Elizabeth Griindstaff asked that the landlord mediation function, formerly provided by Angelo State University, be explored.  She said there is a need for this service in the community.

Economic forces point to citizens paying more and more.  Rents are much higher, such that citizens need access to mediation.  Water bills will rise substantially just to meet current revenue expectations.   Property valuations, the basis for county-city-school system taxes, are soaring.

Watch the coming budget workshop.  Can citizens bear 25% increases across the board?

Update 6-29-14:  The Standard Times reported on rapidly rising property appraisals, the basis for local taxes.  

Wednesday, June 25, 2014

City Landfill/Trash Contract: Serious Questions Need Answering

It's less than a week until San Angelo's City Council will hear the recommended contract with Republic Services/Trashaway.  Council plans to undertake the issue on July 1.

Some citizens expressed anger at Texas Disposal Systems (TDS) for identifying overcharging by Republic for commercial customers since 2000.  Yes, TDS was the only other bidder for the city's trash hauling/landfill operation franchise (that in itself is a concern).  Rather than shoot the messenger citizens should be grateful that someone identified Republic's repeated billing of unauthorized fees per the contract and city ordinance.

It's critical this issue be appropriately investigated prior to signing a long term contract with Republic. 

San Angelo Live reported:

City staff said that they were investigating the suspect charges, and have been since about the middle of April.

City of San Angelo Internal Auditor Steve Mahaffey called this morning to offer more information on the audit of the existing trash contract. He said that all questions have not been answered in the investigation yet, but is anticipating more information to flow from his office. "My ultimate goal is to provide transparency to all of our citizens, including commercial businesses affected by this," he said. "At this point, I have given a brief verbal update on the status of the investigation to the audit committee and to the City Management; there is no official written report at this time."

"I have reviewed several commercial bills, including those provided by Mr. Gregory with his concerns. I have reviewed years' worth of council minutes, watched videos of Council meetings, as well as reviewed agendas, minutes and accompanying background information pertaining to them," Mahaffey said.

I believe it's imperative to review more than several commercial bills.  Because the city received 4% of the unapproved charges, it benefited from the overcharge and retains liability for this portion of excessive fees paid by commercial customers.  At this point an outside audit investigation is warranted.

Mahaffey told the Standard-Times that the audit report would not be made public. 

How does an unshared audit meet the goal of transparency to citizens?  It clearly does not.

City leaders want to put this concern to bed as quickly as possible, thus key events are scheduled for this week.

City Councilwoman Charlotte Farmer said that the audit committee reviewed the findings of the audit of the commercial charges and there will be a press conference held by Republic sometime this week to announce the findings and the resolution. 

Press conference by Republic?  It's the city's franchise to manage.  City leaders are responsible for informing the public of what they found. 

This is the same Charlotte Farmer that motioned for the city to deny another trash hauler's right to use city streets.  After that motion was defeated, Farmer declared a conflict of interest due to having a relative in the trash business.  I never heard her disclose that this conflict had evaporated before motioning to renew Republic's contract for five years, serving on the Trash/Landfill RFP Review Committee or the Audit Committee that heard the Republic investigation unwritten report results. 

Through the thirty six year arrangement with Republic, the city has been responsible for contract oversight.  It's failure to ensure compliance with commercial billing cost area businesses millions ($).  A recent public information request revealed Republic had not submitted complaints to the city for the last five years, as required by contract.

Such discoveries undermine public confidence in city staff's ability to manage a critically important contract for our community.  Vendors had to attest to their ethics and good legal standing in the RFP.  I didn't expect the incumbent company to be at risk of legal proceedings for work they'd already done for the city.  But that is the case.

It seems prudent to extend the Republic contract for six months, have an outside audit investigation, hear those results and corresponding legal considerations and based on those findings consider whether to rebid the trash/landfill contract.  Moving forward with many questions unanswered feels like a rush to renew.  Unfortunately, that would fit with both language and actions by Council and staff the last ten months.

It's time to take a step back, not rush forward.  San Angelo, it's your turn to speak on this issue.

Update 6-26-14:  The Standard Times and San Angelo Live each weighed in. The situation escalated with a class action lawsuit announcement, seeking $9 million in actual damages, which can be trebled if Republic was fraudulent or used deceptive trade practices.

Update 6-28-14:  A Standard Times editorial reached the same conclusion, put the decision on hold until investigation results are revealed.

Update 9-19-18:  Winning bidder Republic Services wants to back away from its recycling contractual commitments.   City staff and Republic will host public meetings on possible changes.  Apparently city leaders don't view Republic's contractual commitments as something to hold the company to .

Sunday, June 22, 2014

American Eagle Clips Early Flight

American Airlines commitment to San Angelo has been shaky this weekend.  For the third straight day customers on the early flight got a call their flight had been cancelled.  This sent them to the back of the line, trying to get an empty seat on crowded planes.

Is the problem with American's desire to serve our region or with Eagle contractor ExpressJet?  I flew with an American Eagle pilot who questioned American's commitment to its Eagle franchise.  Is our stunning lack of service due to the planned switch from American Eagle to American Envoy?  Where is San Angelo in this phased transition? 

Citizens deserve answers.  We need to know where to book reliable flights for business or personal travel.  People shouldn't have to drive to Midland or Abilene to get out.

Friday, June 20, 2014

San Angelo's Air Service Unreliable

Anyone expecting to fly out of San Angelo early Friday morning was sorely disappointed when the 6:25 am flight was cancelled.  Woe to those booked on the same flight the next day.  It too has been cancelled.  How many people lost valuable vacation time?  How many had to scramble to hold hotel and rental car reservations?  How many people had to drive to Midland or Abilene to get out?

Air fares are expensive and service in this case is nil.  American's merger with USAir offered many promises.  For the weekend beginning June 20th the new American looks like a bust from West Texas.

Thursday, June 19, 2014

Yes, San Angelo: You Saved, Now You Must Pay

When it comes to giving San Angelo citizens have done their part.  City leaders asked us to conserve water and we honored their request.

The total number of gallons pumped in 2013 was 4.3 billion gallons, down from 4.53 billion in 2012 and 5.75 billion in 2011.

Average daily usage in San Angelo last year was 13 million gallons compared to 14 million in 2012 and 17 million in 2011.

The average per person usage in 2013 was 132 gallons compared to 150 in 2012 and 177 the year before that.
City Council increased the base water fee by 29% in 2011 and raised usage by $1.31 per 1,000 gallons.  This formula provided 25% of additional funds through the base rate increase and 75% through higher usage fees. 

Instead of holding water use steady or increasing it, we heard our leaders.  Citizens cut water use by 25% from 2011 to 2013. 

Residential users accounted for 69 percent of the water consumed last year compared to 15 percent by commercial users, 7 percent by industry, 6 percent by institutional users (the City, county, school district, Angelo State University, Goodfellow Air Force Base, etc.), and 3 percent by wholesale users.

For the city to raise water funds it plans to hit nearly every user, even low volume customers.  Council discussed having the increase hit people using as little as 3,000 gallons per month.  Citizens saved.  Now they must pay

Monday, June 16, 2014

Water Prices to Increase Again

After postponing discussion on a water rate increase on June 3rd San Angelo's City Council made it a strategic priority to raise water rates for most users.  Past increases include:

2007 - Average increase of $13.22 per month
2011 - Average increase of $14.75 per month
2014 - Average increase of ?
Consider this position in which citizens again find themselves:

Finance Director Michael Dane explained to council the risk factor involved in relying more on an increase to the usage rate to generate the necessary revenue. 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.
Welcome to San Angelo's deja vu.  The goal of any 2014 increase is to get the city back on track water revenue wise.  Revenue in the last fiscal year came up millions short. 

Here's the cycle, which has repeated several times.  The City raises water rates.  Citizens respond by reducing water use, causing water revenue to come in under budget.  As the city views water as a major revenue source, even having it subsidize the general fund, rates must be raised again.

Yes San Angelo, you did what our leaders requested by conserving water.  Now most of you must pay.

Note:  Water bill increases don't include stormwater fees (which range from $3 to $5 for residential customers) added in 2010 or the Water Pumping fee.  It will be interesting to see if the pumping fee goes away, given no pumps remain at the North or South Pool of Twin Buttes.

Update 7-2-14:  Neither Council nor staff knew the recent history of water rate increases.  They thought the last rate increase was in 2008.  It's sad when a blogger has more accurate information for council than staff.

Promoting Sunshine on Strategic Planning Event

City Council meets tomorrow to approve minutes of their June 3rd council meeting and a June 10 strategic planning session held at Fort Chadbourne.  Neither set of minutes are yet available on the city's website.  Also not available is any video of the June 10th meeting.

Here's my interchange with Public Information Officer Anthony Wilson:

SOD:  Will the city post video from this week's City Council planning work session?  6-13-14 @ 8:53 am

Wilson:   No

SOD:  If not, can I get a copy?  6-13-14 @ 8:55 am

Wilson:  There is no video of the meeting

SOD:  That's a change in practice from the last several years.  Who decided not to record the event?  6-13-14 @ 8:58 am

Wilson:  Public Information is equipped to record board, commission and Council meetings in the Council chambers. We are not equipped to film such a meeting in a remote location.

SOD:  I'd appreciate copies of the materials council received, documents used during the session and minutes showing priorities, decisions and actions as a result of the day long planning session.  I expect these are electronic and can be attached to an e-mail.  6-13-14 @ 10:12 am

Wilson:   I’ve forwarded your request to the City Clerk.

SOD:   One might expect this information to be available to the public via the city's website. I've been able to watch the last several strategic planning workshops on the City's YouTube channel, thus no need for the documents I requested. If it wasn't taped, it seems the public should have access to information used in the session and any conclusions, decisions, priorities, etc. established as a result. Any chance of posting the documents on the city's website?  6-13-14 @ 6:09 pm

Wilson:   I've forwarded your request to the City Clerk, who would have any such materials and is responsible for posting City Council-related documents on the Council's web page.

Prior strategic planning sessions revealed critical strategies, like City Councilman Kendall Hirschfeld's challenge to hold employee/retiree health insurance cost steady when area employers experienced 30% premium increases.  I found about that priority by watching the taped City Council planning session.  That can't happen this year.

I recognize the complexity of video taping an event with multiple speakers at a site like Fort Chadbourne, but the Public Information Office seems to do just fine with other remote recordings.

It seems within the department's capability to audio tape the event.  Surely one or two digital audio recorders (roughly $100 apiece) could've done the trick.

Mayor Morrison promised sunshine into Council's affairs.  I'm hoping more will peak through on the strategic planning session.  It used to make good theater.

Sunday, June 15, 2014

San Angelo: Where Streets Have No Maintenance

A Standard Times' editorial discouraged the use of half-cent sales tax funds, a rapidly increasing pot, for street repairs.

Only a small portion of the money has ever gone to economic development
What's the impact of economic development monies the last fifteen years?  How much has been awarded since 1999 and what's the return on those dollars?  We know federal, state and local economic development funds went to Martifer-Hirschfeld with few promises coming to life.

City Council had the Hirshfeld incentive on its agenda for April 15, 2014, but moved the item to Executive Session.  After asking for the update on Hirschfeld's performance on this incentive, the City petitioned the Texas Attorney General to keep this information nonpublic.

Back to the editorial:

Few companies relocate to San Angelo just because their leaders have heard what a wonderful city it is. It takes money to spread the word about what the city has to offer and to put together incentive packages that make moving here worthwhile.
Texas Pacifico Railroad moved from Brownwood to San Angelo in 2011 without an economic development package.  It's expanded greatly due to demand for its products and services, serving growing businesses in our region.

Interestingly, earlier this year City Council turned down an economic development grant award to Texas Pacifico for moving its headquarters, despite a strong recommendation from the Development Corporation.

Texas Pacifico has a clear role in economic development and new City Councilwoman Elizabeth Grindstaff, a Texas Pacifico Vice President, recently shared her recommendation to not divert a portion of economic development funds toward streets.

The Standard Times editorial compares San Angelo to other cities spending:

San Angelo always has underfunded economic development compared to the amount other cities invest. Too many people regard it as an afterthought, something to pay for if there’s money left over after funding everything else.

The City rarely funded everything else.  Ask city workers how prior commitments to pay at competitive levels turned out?  Police and fire fighters find themselves in a deja vu on city pay.  First it was City Manager Tom Adams, then Harold Dominguez and now Daniel Valenzuela.  Each has promised to pay competitively sometime in the future. 

City leaders underfunded public infrastructure, streets and water lines for the last fifteen years.  That's why City Council faces huge bills, $100 million for new water mains in North San Angelo and $155 million for streets.

The city has other huge bills on the horizon, expanding water resources through a regional partnership, funding the city's huge pension liability and likely a nasty surprise for employee/retiree health insurance given the large number of high dollar health claims.

Sometimes a vibrant economy happens without effort and money, and San Angelo is experiencing that with the oil boom. But everyone knows that won’t last. What will last is an ongoing process for generating more economic activity — but we have to pay for it.

San Angelo's vibrant economy is happening due to the location of geological formations bearing oil and natural gas.  With new people moving to town rents have risen dramatically.  A recent spate of rains kept us from cramming more people into a town ready to run out of water.

Economic development is akin to rain.  City leaders should want a healthy level of it.  Our economy is growing now and predictions are for healthy drilling activity for a decade or more.  That means rain is here and falling.  How do you feel when you see your neighbor's sprinkler system going in a storm?  That's one way to look at increasing economic development funds during our oil boom.

Economic development, at whatever level, should help San Angelo achieve our vision.  What are city leaders trying to achieve?

By the year 2027, San Angelo will measurably be the most desirable mid-sized city in Texas.

That vision is buried in the City's Comprehensive Plan on page 48.  It was amended in early 2011.  The vision is front and center in the City's Annual Operating Budget for 2013-14, but I don't think I've heard a leader state it on a regular basis.  The vision entails "growth," which is why the paper believes a continued increase in economic development funds is essential.

The vision intersects with San AngeIo's historical underinvestment in its people and infrastructure.   Therefore, I expect city leaders will ask what departments are essential and what level of services are appropriate and affordable.

COSADC farms out much of their work to the Chamber of Commerce.  They recently paid for an outside firm's software to conduct economic development impact analyses and proposed to hire a realtor to push land sales in the city's Industrial Park. When given the choice to make or buy, i.e. conduct the work internally or contract it out, new Economic Development Director Tony Pena chose to buy it. 

So far, San Angelo economic development packages have generally avoided tax abatement.  Should that change one has to wonder how the city will get money for streets from growth (increased taxes) if those increased taxes are waived?

Nearly everything is looking for a funding source, so economic development should be nervous.  It's about to get interesting in City budget discussions.

Saturday, June 14, 2014

The Will (or Lack Thereof) to Use Reclaimed Water

San Angelo's City Council is slated to approve engaging Alan Plummer Associates Inc (APAI) to conduct an updated Reclaimed Water Feasibility study .  It returns to Council's June 17th agenda after the City of San Angelo Development Corporation (COSADC) approved funding for the study.

Alan Plummer Associates also performed the initial study in 2006.  Their report had a singular suggestion:

"The recommended alternative is one that includes augmentation of Twin Buttes Reservoir with reclaimed water." Alan Plummer Associates Inc. February 2, 2006

The recommended solution didn't happen. It's not clear anyone ever heard that recommendation from the lips of Water Chief Will Wilde.

City Council minutes from the March 7, 2006 don't include the report's recommended alternative.  Minutes show:

Water Utilities Director Will Wilde presented background information and reported staff had received a final report on the Reclaimed Water Feasibility Study (submitted by Allen Plummer Associates, Inc. and part of Supplemental minutes). He stated the consultants were charged with looking at the various options available to the City, had identified potential customers for the reclaimed water, suggested options for direct use, and identified treatment updates to accommodate the reclaimed water. Mr. Wilde advised studies continue on various new chemicals, reuse of effluent water, underground aquifer treatment, and reverse osmosis treatment process with associated cost varying up to $50-60 million.

Mayor J.W. Lown directed staff to develop a condensed executive summary listing the various water projects, a status report of each project, funding mechanisms available to the city, and a timeline for completion.
Mayor Lown's request fell flat.  Here's Wilde's position on reclaimed water in 2011:

According to San Angelo’s water manager Will Wilde, the city is nowhere near actively pursuing the use of wastewater for municipal use.
In May 2012 the City of San Angelo Development Corporation Board physically saw Will wave the 2006 study.  It took six years for the study to resurface.

The board explored using treated water for irrigating the Texas Bank Sports Complex. Will Wilde did his usual routine, feigned interest, shared his expertise, then ignored the COSADC board's request.

Over a six year period Water Chief Will Wilde successfully blocked the 2006 Reclaimed Water Feasibility Study, keeping it out of sight for most of that time.  When directed by Mayor Lown or the COSADC board Will ignored their requests.  Wilde successfully blocked reclaimed water use for anything other than irrigation:

The Tom Green County Water Control and Improvement District #1’s water supply is made up of a combination of storage water from Twin Buttes Reservoir when available, reuse water from the City of San Angelo, and 100% of tail water is reused within the District. All of our water is used for agricultural purposes. Reclaimed water and stored water are used to provide irrigation service to approximately 118 farms and 15,000 acres.

Will Wilde owns one of the 118 farms receiving the city's reclaimed water.  That's a fact worth keeping in mind for anyone curious as to the city's lack of progress in this arena.

Newly elected City Councilwoman Elizabeth Grindstaff expressed puzzlement on reclaimed water in running for council.

We have communities using effluent water, reclaimed water.  And why the city has not looked at that seriously for the last ten to fifteen years, I don't understand why.  I would love to hear that having worked in other cities where reclaimed water was an important component of the water portfolio. 
Grindstaff knows why because she saw it first hand as Assistant City Manager.  She is seen below talking with Will at the May 9, 2012 COSADC board meeting.  Grindstaff stayed for the entire meeting, reclaimed water use and all.

These two would clash again in another city debacle, the unauthorized purchase of over $100,000 in water department furniture, also known as the Furniture Fiasco

For those interested in the 2006 study it can be found below:

There's a new study coming.  Let's hope city leaders do better with this one. 

City Achieves Finance Gold or Lead?

The Standard Times reported:

The city received the Gold Leadership Circle Award from the state comptroller’s office for its efforts to give local taxpayers a transparent view of how their tax money is spent, according to a city news release sent out Friday.
The state agency tracks the financial transparency of local governments statewide, including annual budgets, financial reports and check registers.

Consider the City's health internal service fund (employee/retiree health insurance) balance at the end of FY 2012, which becomes the beginning balance for 2013.  The Gold level finance department had this ending balance for FY 2012/beginning balance for 2013 at $1,571,629.

The City's Comprehensive Annual Financial Report (CAFR) for FY 2013 shows a beginning balance of $1,100,401. That's a difference of -$471,228.

This was not covered in the May 20th CAFR presentation to Council.  There's more that needs explaining as the city did a poor job of projecting health insurance revenues and costs in FY 2013.  The City started off projecting a breakeven year, then revised that to a negative $343,287.  The CAFR said the loss came in at $622,404. 

Rather than the expected $1.23 million in the health insurance fund, the City of San Angelo has a mere $469,306 for the current fiscal year.  Human Resource Director Lisa Marley told Council two different stories within a month on projected health insurance costs.  Savings evaporated, such that Council voted to use remaining ERRP funds of $201,000 and much of the City's weeks old Rainy Day Fund to spare employees an increase.

The City issued a Request for Proposal for health insurance, amongst other employee benefits.  Bidding closed at 2:00 pm Friday, June 13th.  

Health insurance should've been a major theme in the recent City Council Strategic Planning Session.  That and the city's looming pension liabilities.  From media reports there's no indication either subject made the list.  There's a dearth of information from city officials on the session, but that's the subject for another post.

Former City Councilman Kendall Hirschfeld indicated at a publicly aired strategic planning session that staff were to keep health insurance costs static.  His message in June 2011 essentially was "Don't bring us a health insurance increase.  I want it flat or preferably lower." 

The current council's preference could be seen by there not taking up the topic at all.  A transparent finance department should have informed Council of the City's deteriorating health insurance fund balance.  City staff seems to prefer waiting for an item to achieve crisis levels before informing council.  It's more like lead than gold.

Update:  San Angelo Live also did a piece on the Gold Leadership Circle Award

Update 6-19-12:  A presentation to City Council on 6-17 identified a Health Insurance increase of 12-14% or $750,000 as not being in the draft budget.

Tuesday, June 10, 2014

Trashaway-Republic Contract Renewal: Failed Checklist

One might expect city staff to go through key contract provisions with Trashaway-Republic Services and assess their performance over the last ten years.  It's clear that didn't happen with at least two sections of the contract, commercial client billing and submission of customer complaints to the city.  This means City Council had only part of the picture when it acted on April Fool's:

On April 1, the council unanimously approved the recommendation of a committee to grant, pending negotiations, the city’s waste collection contract to Republic Services for 10 years.
City staff abdicated their responsibility to ensure commercial clients were charged allowable fees and not a penny more.  They also failed to compel Trashaway-Republic to provide the contractually required listing of customer complaints for the last five years.

These omissions blow a hole in staff's assertion they conducted a thorough analysis.  Assessing contract compliance for the current provider would be a key step in any credible evaluation process.

I appreciate the call for transparency, but it's darned embarrassing when the light of day reveals the city is clueless, unaware.  Republic is in the midst of a charm offensive as it tries to survive its first serious challenge in thirty five years.

This item was due to return to City Council May 6th.  There's no hide nor hair of it yet.

Update 6-15-14:  Target date for this to go to Council is July 1.

Sunday, June 08, 2014

Selling City of San Angelo's Industrial Park

The City of San Angelo Development Corporation approved its contract with the Chamber of Commerce for $225,000  Exhibit A - Scope of Service specified in item III:

As part of its marketing efforts on behalf of COSADC, the Provider will maintain up-to date information for business prospects. Included will be a cost of living index, specialized brochures advertising land and buildings, general community information necessary for the site selection process, and a current website relative to the community and COSADC assistance and activities.
The very next item was a Request for Qualifications for a Realtor to market land in the City's Industrial Park.  Economic Development Director Roland Pena said he'd seen this work well in other communities.  When asked if he was seeking a local real estate agent or someone with a regional/national commercial capability, Pena waffled, deferring to purchasing staff for guidance.  He started with local, then expressed an openness to anyone who could bring in the business.  I expected him to share something about the arrangements he'd seen in other communities.

The follow-up question dealt with how this proposed service might compare with what the Chamber already does for COSADC.  Pena referred to the city's Industrial Park land as out of sight, out of mind.  It will be interesting to see the City's Request for Qualifications and hear future discussion on this topic. 

Thursday, June 05, 2014

MedHab Update Coming Soon?

City of San Angelo Development Corporation Board closed it's May 28, 2014 meeting with a request for a MedHab update.  More than one board member resonated with COSADC Board President Scott Tankersley's request.  Tankersley said, "I'm curious as to what's going on, where they are?"  I look forward to hearing a public answer to his question.

Update 7-5-14:  There was no MedHab update in the June 25th COSADC meeting.  As far as the public goes Tankersley's questions remain unanswered. 

Wednesday, June 04, 2014

Trashaway-Republic Contract Performance: No Adults in Room

One has to wonder what the city did between 2004 and 2014 to monitor Trashaway-Republic's compliance with its City of San Angelo contract.  The public learned there was no authorization for special charges Trashaway-Republic charged commercial clients.  In addition the city conducted no billing audits to ensure Trashaway complied with contract terms regarding allowable charges.

Add another omission to the list, the required reporting of complaints to City officials by Trashaway-Republic.  The contract language states:


Contractor agrees to respond within a reasonable time to any complaint from the City or any citizen regarding services.  Contractor shall maintain a written log of the source, date and nature of such complaint, the resolution thereof, and shall provide to City a written report of such complaints at least twice annually 

Texas Disposal Systems, Trashaway-Republic's competitor, sought access to the complaint lists for the last five years. 

On May 22, TDS submitted an open records request to the City of San Angelo asking for copies of the Contractor reports required under section 2.1.5 of the contract.  The City responded with the attached letter, which states the City does not possess the records and that the documents are not in existence at this time.  

This is the department our current water chief ran for eight of the last ten years?  No billing audits, no complaint logs (as required by contract), what else did the City not do.  I find it amazing how the city abdicated its responsibilities to Trashaway-Republic.  It's as if there were no adults in the room, just boys, the good 'ole variety.

(The letters referred to above are embedded in the Slideshare document at the top of this post.)

Monday, June 02, 2014

City Minimizes Water Resources

The Standard Times under reported the impact of San Angelo's Memorial Day runoff.  It's much more than "several months supply":

In light of the Memorial Day Weekend rains that delivered several months of additional water supply to San Angelo, the council will have to address the city’s management of this water.

City ordinance requires the council to implement a drought level by resolution, once the water utilities director informs it of which threshold San Angelo falls within.

Before the replenishing rains, San Angelo was inching closer to drought level 3, which is triggered when the city has less than 12 months of available water supply. Drought level 3 prohibits all outdoor watering.

Drought level 2 is triggered when the city has less than 18 months of water.

Drought level 1 is triggered when the city has less than 24 months of water.

The city currently remains in drought level 2, which permits outdoor watering once every two weeks. The council will determine which level to implement at Tuesday’s meeting.

Last week Ricky Dickson, director of Water Utilities, was awaiting final inflows to area lakes to determine how much they caught from the Memorial Day weekend deluge, but he said it was likely San Angelo would end up with more than 18 months of water when the final figures came in.

Dickson will have the most current information about water supply for the council at Tuesday’s meeting.

In September 2012, when a similar weekend rainfall pulled San Angelo back from going into drought level 3, many members of the public were opposed to going back into drought level 1. 

The council at the time had its hands tied because the ordinance required the city to revert to a less restrictive drought stage because of the number of months it had in water supply.

On Tuesday the council is to discuss and take action on the drought level.
“The Water Conservation and Drought Contingency Plan is designed to encourage water conservation at all times,” a city memo states, “and to establish a procedure for identifying, classifying and handling a water supply shortage.”

Here's the tale of the tape on our current water supplies (based on data from San Angelo Live pre and post rain event):
Lake Nasworthy - up 93% or 4,667 acre feet
Twin Buttes - up 390% or 12,782 acre feet (this could be higher 
            depending on the inclusion/exclusion of South Pool volume)  
O.C. Fisher - up 2,551 acre feet
That's an additional 20,000 acre feet in San Angelo lakes.  It doesn't include increases in Lake Ivie, Spence or Hickory water

The city uses about 15,000 acre-feet -- or 4.9 billion gallons -- of water per year.

Do the math.  The city was ready to enter 12 months or less of water when it received 16 months of water in local lakes.  That gets us to 28 months, without a drop from Ivey (gained 55,000 acre feet), Spence (which we pay for rights to but is physically undeliverable) or Hickory (4.5 months of water).  Current water totals show the City under no drought restrictions under current law.

The City speaks out of both sides of its mouth on water.  It looks at water as a huge revenue source and has for the last several drought cycles.  Increasing prices at this time will raise revenue for the city.

In contrast the City wants to increase watering at area parks and charge itself less.  Yes, parks need to maintain their plant material, but so do homeowners.

Various City City Councils requested staff bring a comprehensive conservation package, yet none arrived.  We quit watering the yard eight months ago.  It was the right thing to do for an active user of area lakes.

Our next decision is bring back the Bermuda grass or xeriscape.  I'll look to see what City Council has for citizens trying to do right in their June 3rd meeting.  If the past is a predictor of the future, it won't be much.  I've seen a number of price increases to where the comprehensive utility bill is $80 to $100 with monthly water usage of 3,000 - 5,000 gallons.

Whatever the city does to citizens by raising fees or imposing restrictions, it needs to do to itself.  Leadership by example may be a rare event these days.  However, it is important.

Update 6-3-14:  The City's schizophrenia regarding water showed when it kept drought restrictions at Level 2 while approving once a week watering.  Water Chief Ricky Dickson said the city had over 30 months of water, three years worth if Hickory water is included.  Council will revisit the issue in July.  The Standard Times reported Twin Buttes' gain as 21,508 acre feet.  This is either a typo or incredible news that includes gains from adding South Pool volumes.