Tuesday, January 29, 2019

December 2018 Accounting Documents for the City of San Angelo

Posted here as the City of San Angelo removed Bluebook accounting documents from its webpage:

The City also removed its monthly revenue and expenditure report.  Below is December 2018 Revenue and Expenditure Report for anyone interested:

Monday, January 28, 2019

Four Years Since Public Works Chief Last Presented to City Council

Executive Director of Public Works Ricky Dickson had three regular agenda presentations to San Angelo City Council since his promotion in November 2014.  Those presentations occurred in December 2014.

Executive Director Dickson hasn't presented to City Council in a regular meeting in four years, which seems odd given the city's emphasis on water, the series of changes in the Republic trash contract and the need to fix San Angelo's horrible streets.

Dickson did talk to Council in a March 2016 Strategic Planning session about buying a building for the Water Billing department.   Dickson has referred to Water Billing staff as "the girls" in the past.  They are now in the old First Financial Bank building downtown, renamed City Hall Annex.   His comments were not a presentation, but a head's up.

While Dickson did not appear before City Council he was busy overseeing a Public  Works Department that hired his son in April 2016.  It took an internal uprising in August 2017 to prevent the city from employing his son-in-law in a newly created project manager role.  Several courageous people spoke up and prevented this from occurring.

Dickson is in the best position to explain why city streets have gone to heck as he had a major role in street maintenance during his nearly three decades with the city.  What key decisions were made over the years that contributed to the city's vast under-investment in street upkeep?  That presentation should be made to City Council and soon.   

Update 3-16-22:  Brandon remains employed by the City of San Angelo after his father's retirement. 

Update 5-23-23:  The city budgeted $14.3 million to upgrade the Standard Times building for Public Works and other departments.  Staff will move from the former First Financial Bank building (City Hall Annex) into the Standard Times space.  At that point the cost to upgrade the former bank building for a police station will be identified.

Monday, January 21, 2019

Development Corporation 2017 Compliance Audit

City of San Angelo Internal Auditor presented a summary of his compliance audit to the Development Corporation Board on December 19, 2018.  That document is shown above.

There was remarkably little information in the presentation so I asked city staff for additional information.  I received the following summary:


The audit revealed on page two that MedHab's agreement would expire 1-1-2019 and there has been no action on OneEnergy Renewables Mesquite Solar farm on city land.  Page three showed the Development Corporation spent nearly $50,000 on studies of the former City Dump just uphill from hotel row on the Houston Harte frontage road.

The Development Corporation Board will address MedHab and Hirschfeld/Martifer in Executive Session on 1-23-19.  The agenda has a $300,000 in additional BREP funding for Principal LED.  The audit showed Principal LED received $516,123 as of 2-17-17.   Blank are the Summary/History and Financial Impact sections of the report to the Board on additional BREP funding for Principal LED.  This information seems important to understand the total funding picture from public coffers.

Update 6-16-19:  The City of San Angelo created a slick video on its economic support for Principal LED.  It lacks basic details about the agreement.

Saturday, January 19, 2019

City Council to Consider Benedetti Machine Buyback Provision

The City failed to execute its vision of resurfacing San Angelo's rapidly deteriorating roads with an internal crew.  City Council will entertain returning the Hot in Place Asphalt Recycler (HIPAR) machine at its January 22nd meeting.

Council approved spending $1.2 million to buy the equipment and later approved higher pay for the crew operating the Benedetti Phoenix. 

The staff memo stated:

After 18 months of utilizing the HIPAR process on various roadways throughout San Angelo, Staff has concluded that the operation does not meet an acceptable rate of efficiency on San Angelo's roadways.
City documents indicate city crews operated the machine a mere four months for the period October 20217 to October 2018.  The city had the equipment for 18 months but did not operate it for most of that period.

The city projected resurfacing 60,000 square yards with the equipment.  It did but a fraction of that.

The vendor expressed his desire for the City of San Angelo to be a model for his company's road resurfacing equipment and is likely disappointed to learn of the city's plan to exercise the buyback provision.

As for the "acceptable rate of efficiency" how much of the responsibility belongs with the equipment and how much to the operating crew?  That can be difficult to discern.

The city's position will be heard at Council.  The agenda had a letter from Assistant Operations Director Patrick Frerich and indicates Operations Director Shane Kelton will make the presentation.  There are no slides from Kelton in the background packet.

Will any Council members inquire as to how the city performed relative to its original cost projections?  The projected costs can be seen in staff's slide.  What were the actual costs?    

Also, the vendor might have something to say about the situation and how things progressed to the city's exercising the buyback provision.  This information may be useful as Council considers alternatives for addressing street disasters in our community.

The City of Fredericksburg, Texas prides itself on having zero potholes and they reconstruct minor streets with internal crews.  Their Public Works Director was once our City Engineer.  Council may want to cast a wider net for advice in dealing with our crumbling street infrastructure.

Update 1-22-19:  San Angelo Live ran a story on the city asking the vendor for a refund as the composition of city streets wasn't conducive to the machine's operation.

Update 1-25-19:  Operations Director Shane Kelton informed City Council many cities in the Northeast are using the Benedetti machine successfully but the City of San Angelo Street Department could not perform as well. Only Akron, Ohio appears in a promotional video for Benedetti.


Update 6-2-23:  The Benedetti buyback will hit City Council's agenda for 6-6-23.

Sunday, January 13, 2019

Water Department to Use New Collection Agency

City Council approved a new collection agency for past due water, sewer and trash service bills on 1-8-19.  Online Collection Services from Winterville, North Carolina is the new collection vendor.

Three years ago City Council approved use of a collection agency to collect past due water bills.  An RFP document provided background information:

The City of San Angelo Water Utility Department is soliciting RFPs for debt collection services for unpaid water, waste water, trash and storm water past due bills. This service is currently being provided through an amended legal services contract that was originally awarded through municipal court to collect on traffic violations. The original contract because it falls under legal services did not go through any formal RFP process. 
City staff was unable to answer the following questions from Council:

1.  What percentage of the uncollected amounts are commercial vs. residential?  "I don't that particular number."
2.  How many accounts does this represent?    "I don't have that number exactly....18,000 sticks in my to mind."
3.  In the last three years how much money did the first company collect?  "I'd have to go back and look at documents on that.  I have seen that but I don't recall."
4.  How long is the contract for?  "They are basically going to be one year terms, the first term may be two years."

Staff highlighted the new firm's capabilities vs. the current vendor:

"This company does have some fairly aggressive means in that they actually do credit bureau reporting, which is something we have not had the opportunity to do in the past."

"We have been not able to do the credit bureau reporting."
Flashback to January 2016 and the justification memo written by then Assistant Water Utilties Director Alison Strube:
The 1-5-2016 memo states:
The proposed amendment will modify City Ordinance to allow the utility to turn over delinquent accounts to a third party collection agency and place the burden of the collection fee (20% of unpaid balance) on the collection account instead of the Water Utilities department. The collection agency will also be reporting these owed monies to the credit reporting agencies (i.e. Equifax, etc.)
The City's purchasing department provided additional information to potential bidders via an addendum:

The document included a lengthy narrative to answer a number of vendor questions.  It stated:
In recent fact finding inquiries with other entities the City Water Utility department feels it may be able to get a collection service company that could provide a better return rate while at the same time receiving a higher success/recovery rate percentage

The current amount of outstanding debt being carried by the City Water Utility Department is approximately 3.6 million dollars and held under 12,700 accounts extending back to 2009 and possibly earlier. Although the collection agency does not have to be located in Texas or in San Angelo established municipal utility experience with collection in the state of Texas is paramount. Prior to placing accounts in collection the Utility makes several attempts over a 60 day period to notify account holders by phone, email, US mail and door tags. 

Selected candidates will be given a percentage of both new and existing accounts for collecting. The Utility would expect collection service providers to at a minimum provide monthly updates including accounts that have been collected, dollar values, and accounts that have been reported / filed with credit bureaus.
Only Councilwoman Lucy Gonzales served in January 2016 when the first collection agency was approved.  She did her part by asking good questions. City staff need to step up their game by preparing and providing good answers.