Development Corporation Recommends Lip Chip LLC Incentive

The City of San Angelo Development Corporation will recommend a $29,700 economic development incentive for Lip Chip LLC.  The company plans to build a plant outside city limits.  The item will go to City Council for approval.

In closed session the Development Corporation board discussed a real estate bid.  In July the city took bids from developers for land adjacent to the new Railport.  This is the third time the city sought bids for this land.  After closed session the board had no report for the public.

The Development Corporation locked in a $2 million incentive for Angelo State University's pilot training program.  No one from the public spoke during the public hearing on this item.  The money will go toward a new facility.  

Assistant City Manager Michael Dane said City Council chose not to set strategic priorities for the coming fiscal year.  He recommended the Development Corporation Board set some strategic priorities as they would help staff focus.

The board endorsed the following three strategic priorities.

Transportation (planes, trains and automobiles)

Business Recruitment/Business Retention and Expansion

Quality of Life

In prior years City Council identified water and economic development as key priorities.  Top staff positions in both areas have been vacant for over a year.  

Maybe a key strategy should be leadership recruitment and retention.  It would help the city achieve its other important aims.

Update 10-13-23:  City Council will take a second vote on the Lip Chip incentive in their 10-17-23 meeting.  

The State of Texas requires “Community Support” for any project in which they will participate.

There are multiple ways for Lip Chip to get state funding.  It's not clear if Lip Chip will receive any federal funds.

Update 4-15-24:  Concho Valley Homepage ran a story on Lip Chip.  It cited the advantages of ready access to needed paperwork for rodeos and races.  It's San Angelo Rodeo time!

City Moves Back Animal Shelter Completion

 

"Emergency repairs" for the San Angelo Animal Shelter are expected to be complete in April 2024.  Staff presented $2 million in short term financing, mostly for Shelter repairs, to City Council in February.  

The City approved engineering design services in May.  Construction Manager Al Torres said the design work would take 45-60 days and then the project could be put out to bid. 

Construction financing normally parallels the project's completion, however the city paid back the note on August 15, 2023.  The city paid over $93,000 in fees and interest and staff stated there were no relevant documents when asked for Shelter renovation invoices paid from the $2 million borrowing.

As of today, the city is yet to bid out Animal Shelter renovations.  City Council meets again next Tuesday.  Their agenda may or may not shed light on the status of this project.  

Update 10-11-23:  The Animal Shelter Advisory Committee meets next week.   City Council last learned of a projected January 2024 completion date for Animal Shelter renovations.  Staff are yet to update Council of the new target date.

Update 11-3-23:  The City is yet to seek bids for Animal Shelter renovations.  In previous discussions with City Council staff suggested it would take six months to complete the urgently needed renovations (February 2023 Council approved $2 million in borrowings, primarily for Animal Shelter updates.  The City received the funds in March).

Update 12-5-23:  The city is yet to bid those "emergency" shelter updates.  It's purchasing website has no information for potential bidders for shelter renovations.

Update 2-23-24:  City Council approved a zoning change to allow the former fire training facility to be utilized as a temporary Animal Shelter while the current building is renovated.  Planning staff suggested a 3-5 year time frame for renovations while Assistant City Manager Rick Weise said it would be less than that.

Update 3-7-24:  The latest schedule information is:

....the bid phase is delayed to May 2024 with estimated construction completion in November 2024.

City Council Funds $2 million for One Nonprofit, Rejects $69,000 for Another, Opens $25,000 Door for Third

San Angelo City Council approved $2 million in  Development Corporation funds for Angelo State University but denied a $69,000 request for TIRZ funding for a north-side nonprofit.  In closed session Council opened the door for the Railway Museum, another local nonprofit, to receive $25,000 in Hotel Occupancy Tax funds.  The Railway Museum's board chair is Suzanna Valenzuela, wife of San Angelo City Manager Daniel Valenzuela.

In the presentation Assistant City Manager Michael Dane referred to Angelo State University as "not a traditional taxpaying entity."  The $2 million in Development Corporation funds would go toward facilities for ASU's Pilot Training Program.  

TIRZ Board Chair Jon Mark Hogg regretted rising to speak on behalf of the Martin Luther King Avenue nonprofit, Gethsemane Missionary Baptist Church.   He felt he inadvertently hurt the applicant's chances of approval.  Mayor Gunter raised her concern of the TIRZ board not endorsing Chadbourne Street "street-scaping" North of the freeway.  Council Tom Thompson raised the specter of nonprofits coming out of the woodwork to apply for TIRZ funds should this one be approved.  Thompson voted no for this reason.  Neither the Mayor's or Thompson's concern dealt with the merits of the project as submitted by the applicant.

Over the last year this City Council has gotten cross-ways with the Development Corporation Board and TIRZ board.  Several years ago Council put the Railway Museum Board in its place.  One could view it as progress that two out of three received Council approval today. 

The City Attorney almost directed City Manager Daniel Valenzuela to work out an agreement with the Railway Museum where his wife is Board Chair.  She corrected herself and steered the job to Assistant City Manager Michael Dane.  Dane is taking on multiple roles as Interim Economic Development Director as the search to date has been unsuccessful.

Two nonprofits went at least one step forward, while one received its second rejection from this City Council.  The TIRZ board and development staff want "qualified organizations" to apply for funding.  A minority of City Council members are not helping them.

Update 9-26-23:  The Development Corporation will consider a $29,700 economic development incentive for Lip Chip LLC.  Their facility will be outside San Angelo city limits.

Update 9-28-23:  The Development Corporation approved the $29,700 incentive for Lip Chip LLC and the item will go to City Council for approval.

Update 10-3-23:  City Council approved $50,000 in hotel occupancy tax funds for the San Angelo Museum of Fine Arts.

Council to Consider "Rolling Debt Program"

San Angelo's City Council will consider borrowing millions more to finance short term projects.  The background packet states:

At the General Fund budget workshop on August 29, 2023, the City Council asked staff to bring a discussion item to present options and explain processes and impacts related to a rolling debt program that would provide funds for equipment replacement, public safety equipment, and other small City capital projects or needs. Vince Viaille, Managing Director of Specialized Public Finance, Inc., will be presenting the program and discussing options with the City Council at this meeting. 

Note that the city already borrowed and repaid nearly $2 million, mostly for Animal Shelter renovations that are yet to be bid out.  Issuance fees and interest totaled $93,000.  

Staff left blank the "financial impact" section of the rolling debt program memo in the background packet.

City staff said no invoices existed for shelter renovations paid from that $2 million borrowing.  Council should explore how that initial short-term borrowing was used before committing to future debt issuance.

They have that opportunity tomorrow as a second short term debt instrument of $1.875 million will be presented.

City Council generally avoids cash flow considerations in their annual strategic planning/budget process.  The city's various fund balances are not discussed.  Some are substantial, having grown from higher property assessments, a multi-year increase in water related fees and other fee increases.

Staff have long taken a minimalist approach with City Council and the wider public.  

It took a public information request to get actual costs for the (Series 2023A) notes Council approved.  Issuance fees are $49,000, bond counsel fees $3,500 and interest costs $41,327 (as the city shortened the term of the note to August 15, 2023).  Those total $93,827, a significant amount that could fund may a low cost spay/neuter surgery program.

I believe those same forces are in play with the series of short term debt instruments.  

To date City Council has expressed little curiosity as to the need for the short term notes, the cost of issuance plus interest expense and whether existing fund balances/cash flow can cover the costs of the various projects.  That could change tomorrow.  Then again, it may not.

Update 9-19-23:  City Council endorsed the idea of a rolling debt program as a way of occupying 2 cents of the 11.4 cents tax rate for its interest and sinking fund.  Council did not ask about cash flow projections but seemed excited that the city could buy more things within a budget period with this "short-term financing for short-term projects."

City Gives Up on Filling Economic Development Director

San Angelo's city leaders "pressed pause" on their search for a new Economic Development Director.  Over a year ago former Director Guy Andrews resigned.  At the time Assistant City Manager Michael Dane expressed optimism that a replacement could be found quickly.  Two rounds of headhunter led searches produced no viable candidates. 

Economic Development is a top three priority for City Council.  The Development Corporation pays the city huge dollars annually for support services, which includes the Economic Development Director.   

That contract was an issue for Guy Andrews and former board member John Bariou.  Both questioned the fairness of the arrangement and its impact on the independence of the Development Corporation.  City staff staunchly defended what they bring to the table, so it's disappointing for staff not to deliver on hiring a quality candidate.  Dane even said the position might not need a full time person.  How many faces do these guys have?

Money was mentioned as a stumbling block but sometimes it's "you can't pay me enough to do that job."  Any candidate could watch City Council and Development Corporation meetings and see a lack of alignment.

The Development Corporation held two budget workshops that likely addressed the various splits.  Those have not been shared with the public outside written minutes.  At least one workshop meeting had an audio recording.  

Pressing pause in an audio recordings  mean less visibility for the public, which includes possible future Economic Development Director candidates.  Much is said in the space between words.

City Council and their appointed COSADC board need to work through a number of issues.  Until then hiring a new Economic Development Director will be challenging.

Update:  The July 26th Workshop minutes state:

The board would like to align strategic priorities with City Council.

The public should be able to hear this discussion.

The Development Corporation approved a lease extension with Centurion Planning and Design as the firm's new space is not yet ready.  This is interesting as Guy Andrews works for Centurion.

Update 9-26-23:  The meeting minutes state "Per Michael Dane, the hiring of the Economic Development Director position is on pause."

Update 4-27-24:  The COSADC board received an update on the city's not filling the Economic Development Director slot.  The report came from interim Economic Development Director and Assistant City Manager Michael Dane.  Dane said city management has no plans to fill the job at this time.  He did recommend a study of how other cities have organized and staffed their economic development function.  Board member Joe Spano asked Tina for information on the economic impact of not filling the position.  Dane answered for Tina in general terms.  He said savings have been used to fund projects.

Shelter Pet Labor Day

 

Volunteers at San Angelo's Animal Shelter are provided by Concho Valley PAWS and can only assist shelter pets during PAWS operating hours.  PAWS announced their Labor Day closure. 

San Angelo pets face a different kind of labor, that associated with pregnancy.  PAWS stopped issuing low cost spay/neuter vouchers over four of the last nine months, but plans to restart the program in September.

Vouchers were not available for December 2022 and January 2023 and stopped again the last two months, July and August. 

PAWS is the Animal Shelter's veterinary service provider and available shelter statistics do not include the number of shelter pets spayed/neutered under this arrangement. 

SNIP Voucher restarting is yet to make PAWS website but is shown on their Facebook page.

San Angelo and Concho Valley residents interested in "being the change" will have an option to accomplish that goal.  

As the late Bob Barker said, "Have your pets spayed or neutered."

Update 9-4-23:  PAWS volunteers gave feedback to Shelter Chief Morgan regarding dog walking in the afternoon's of our record blistering summer heat.  It's not good for the dogs or the volunteers, many of whom are elderly. 

Update 9-10-23:  A PAWS volunteer gave public comment at Thursday's City Council meeting.  It was not an endorsement of shelter leadership or City Council's burying their heads in the sand regarding the harm from the shelter following Pets Alive policies.