City's Agreement with MedHab Nears Expiration

The City of San Angelo's economic development agreement with MedHab LLC will expire January 1, 2019.  City Council approved the $3.6 million incentive package on January 3, 2012 and the approved the contract seven months later.  The city had high hopes for significant job creation which can be seen in estimated impact of 75 new jobs (with up to 227 total).

The City projected an annual economic impact of $9.9 million.

The 2014 Annual Report for the Development Corporation stated:

Under that agreement, MedHab LLC will locate its production operation in San Angelo, create between 75 and 227 full-time qualifying positions, and relocate its offices to the Incubator Annex at 2009 W. Beauregard Ave., which was accomplished in December 2012.

To date MedHab has not had the projected impact on San Angelo employment.  The company accepted three years of free rent but has not accessed any other incentive provided in the contract.

Several months ago both the Development Corporation and City Council took up MedHab in executive session.  City officials shared nothing in regard to those discussions.  What happens on January 1, 2019?  Does MedHab, with its promising fall detection device for seniors, walk away from the City of San Angelo? 

Mayor Gunter Snubbed by Finance Staff

On October 20, 2018 Mayor Brenda Gunter asked city staff to present information on how the city performed in its just closed fiscal year.  Finance Director Tina Dierschke expressed reluctance to present unaudited numbers in her reply.  Four days later Dierschke did just that for the city's Development Corporation.

"Good morning, Board.  I'm going to present your year end unaudited financial statements to you this morning."--Tina Dierschke, Finance Director

It's not clear why city staff ignored the Mayor's request for November 6th and 20th City Council meetings, but they have. 

Update 12-8-18:   Staff will present preliminary financial results for fiscal year ended 9-30-18 at the upcoming City Council meeting on 12-11-18.

Mayor Asks, City Staff Ignores

Mayor Brenda Gunter made a clear request of San Angelo city staff during the October 16, 2018 Council meeting.  It was not recorded in the minutes or acted upon for the November 6, 2018 City Council meeting.

Mayor Gunter asked staff to present the financial results from the just closed fiscal year.  This item is not on the November 6th agenda as requested.  The Mayor made a clear request the minutes fail to document in that section or under future agenda items.

The Water Enterprise Fund Balance rose to $10.3 million as of 9-30-18.  That's 158 days of budgeted water revenue.  The city said its target is 75 days.  Other water fund balances total $20.5 million.  That does not include the Lake Nasworthy fund of $14 million.  With massive runoff the last two months the City's water supply is the healthiest I've ever seen. 

The Solid Waste Fund Balance rose to $4.3 million.  Council will deal with the solid waste contract in Executive Session.  Republic Services requested to walk back its recycling commitments.

Council makes strategic budget decisions and should hear the results of their actions prior to the completion of the fiscal audit.  I applaud Mayor Gunter's request for timely feedback.  Time will show if staff intend to deliver. 

Update 11-16-18:  Once again city staff ignored the Mayor's request (as reflected in the November 20 City Council agenda.)

City Staff to Bring New Water Conservation Incentives to Council

San Angelo's City Council held existing water conservation credits in place until staff can bring new water conservation incentive program(s) to Council.  I wasn't sure the program was ill conceived and researched City Council history on the credits.  The City's Slideshare repository produced the following.

In April 2011 City Council heard a presentation on the impact of the 2006 Water Conservation Credits.

The City had two water rate increases, one in 2007 and another in 2011, during the evaluation period below.

Citizens conserved greatly between 2011 and 2015, reducing daily water usage by 37%.  The 10% conservation credit was in place during this period of significant conservation.

Two thoughts entered my mind as the 10-2-2018 discussion ensued.  First, hadn't prior City Council's asked staff to bring updated water conservation incentives for consideration?  The Alvin New, Kendall Hirschfeld and Paul Alexander era had leaders high on water conservation and pursuing new options.  A number of faces changed since Councilman Kendall Hirschfeld asked staff to do this very thing.  In May 2013 Hirschfeld called for advancing:

 "user conservation efforts via incentives for improvements such as rainwater collection, drought-tolerant landscaping, and high-flow toilet replacement, as examples".

Kendall Hirschfeld served on a private citizen group that proposed water conservation strategies to City Council in June 2014.  Hirshfeld was appointed to a re-constituted Water Advisory Board in 2016 where he echoed his call for a comprehensive water conservation program with incentives for citizens.  Despite the calls for new, updated conservation incentives city staff never delivered.

It's 2018 and staff, albeit different due to turnover, are still working on a water conservation incentive package. City staff's recommendation to cut the 10% conservation credit for low water use until they had time to bring back a more comprehensive updated program looked lazy in light of this history of waiting.

My second thought centered on the increase in water rebates from $150,000 in 2006 to $400,000 for 2018.  As water rates have gone through the roof since 2006, most of the huge increase in conservation credits occurred solely because of city induced water rate increases.

The City enacted water rate increases in 2007, 2011, 2016, 2017 and 2018.  Another water increase is coming January 1, 2019.

2007 - Average increase of $13.22 per month
2011 - Average increase of $14.75 per month
2011-2016 - Additional fees of $5.42 per month added.
2016 - Average increase of $5.88 per month
2017 - Average increase of $6.56 per month.
2018 -Average increase of $7.32 per month

Two more rate increases are planned for 2019 and 2020.  Combined they total $7.96 per month.

Math shows rate increases to be the sole cause of increased conservation credits since 2011 for the 3,000 gallon a month user.  It's not fair for the city to act like conservation credits rose rapidly outside their repeated jacking up of rates.

It looked like another $400,000 grab from citizen pocketbooks, but fortunately City Council put that on hold.  We'll see how the proposed conservation incentives compare to the current program.  That is if staff present cost projections in a regular agenda item.   

Update:  The City adopted the 2019 Water Conservation Plan.  The document is dated September 3, 2019.

Ruffini Parking Lot Nearly $200,000 More Expensive than 2018 CIP Budget

Staff presented San Angelo's City Council with an October surprise, a $279,000 parking lot for the Ruffini Chapel and Station 618 Senior Center.  The background information made no mention of the history of the project under a prior City Council.

The December 6, 2016 City Council background packet stated:

"This project, to construct the parking area, is funded and moving forward."

The December 2016 agenda item was for an amendment to the Old Town Conservancy agreement allowing for construction of the chapel. 

"There is no cost to the City for approving the amendment to the agreement. In fact, approving this item will add funding from the Conservancy for development of the City property.In terms of development of the City property, $175,000 was allocated to abate and demolish the old building (which has been accomplished) and to develop the parking lot. At present, about $90,000 remains for development.

Staff also omitted the $85,000 capital improvement budget for Station 618 parking lot (CIP 2018-2023) approved by this Council in February 2018.  Assistant City Manager Rick Weise left out these key details in representing the project to Council.

Staff informed the public via a Standard Times article by Parks Chief Carl White.  His piece on 9-27-18 stated:

The property upon which it sits was acquired by the City about 20 years ago for construction of a parking lot. That budgeted parking lot project, pending successful bid and Council approval, is planned to begin in the late summer or early fall. 

Neither the newspaper piece or staff's presentation gave an explanation as to the scope of project changes that drove it from $85,000 to nearly $280,000. 

Weise did say they could reduce the project some by eliminating a few decorative planters such that it would give them more parking spaces.  Don't planners used site specifications/requirements, like the number of parking spaces required for optimal/peak use, to design a project?

Apparently the requirement is spending excess city dollars without detailing the history of a nearly $300,000 project and why it changed so dramatically in such a short period of time. 

City Rams Through Wastewater Reuse

The City of San Angelo discussed future water supply in Executive Session on 9-18-18.  Only Council members heard the presentation by hired consultant Scott Hibbs.  With no discussion of the facts or their deliberations Councilman Tommy Thompson made a motion for the city to apply for permits that would allow for discharging treated wastewater into the Concho River for a short distance then pulling that water back out of the river for citizen use.   There was no public comment.

The Water Advisory Board learned of this on 9-24-18, nearly a week after Council acted.  Consultant Scott Hibbs updated the water board as to City Council's planned strategy.  This may explain the poor attendance as four members missed the meeting.  It's hard to see any advising from this board if City Council already acted.  Educated and talented people don't like to be used as a rubber stamp. 

The Water Board did hear from members of the public concerned about the city pursuing groundwater south of San Angelo.  One did ask about the city's arrangement with the Tom Green County Water Control and Improvement District #1 (TGCWCID).  Water Chief Allison Strube said City Council would address the irrigation contract with TGCWCID but hopes the city could send effluent water to the district during times when the city does not need treated water for citizen use.

The City's broken pipeline to Lake Spence will remain unusable.  There are no plans to fix the intake or pipeline for the city to garner 3,000 acre feet annually.  City staff may wish to remove Lake Spence from the water supply web page after Council passed on a workable Spence strategy.

On 10-2 the city published a video on Council's strategy staring two hired guns, the lead consultant and the city's water rights attorney.  This video mentioned the city's current use of wastewater one time.

For all the discussion of process the video failed to mention City Council decided the top water supply strategy behind closed doors without any public comment.  Continuing the lack of disclosure theme was Water Chief Allison Strube who said the city wanted the water fund balance to be "closer to 75 days cash on hand or greater."

She failed to mention the gusher of funds currently in that account, nearly $9.4 million as of 8-31-18.  That's double the amount needed for citizen water rebates cited by staff in November 2017.

How does all this nondisclosure happen under the leadership of City Manager Daniel Valenzuela and Executive Director of Public Works Ricky Dickson?  Why does City Council allow it?

Update 10-14-18:  Another level of nondisclosure arose with SanAngeloLive's piece by Yantis Green on the change.  Green is the former Executive Director of the Tom Green County Water Control and Improvement District #1.  He left the position after embezzling over $60,000 in public funds.  Author Yantis Green provided no disclosure as his history with the TCGWCID. 

Update 3-23-19:  San Angelo Live Editor in Chief Yantis Green defended his professional ethics as a journalist since 1988.

City Staff Want to Eliminate Water Conservation Credit

City staff recommend the cancellation of the 10% conservation credit for water customer users who consume 3,000 gallons or less on a monthly basis.  Not on the October 2, 2018 City Council agenda is staff's botched billing of the conservation discount since 2009.

Staff recommends the 10% conservation discount be removed.

Water Chief Allison Strube indicated in the decade long over-billing press release:

“Many of the customers who earn the discount currently are not actively seeking to do so,” Strube said. “They manage to earn the credit simply by circumstance, such as the case with a realtor briefly needing water service for an inspection or a single person living alone in a home. We want to create a robust conservation program that encourages our customers to actively take steps to save water.”

Horse hockey!  Our household regularly uses 3,000 gallons per month due to conservation.  We have low flow shower heads and water sparing toilets.  We have not operated our sprinkler system since our last major drought when Council worked hard to bring Hickory Water online.

At the time City Councilman Kendall Hirschfeld suggested the city not charge citizens the monthly base fee if they turned off their sprinkler meter.   That was never implemented.  Our contribution to conservation is low water use in the home and no sprinkler use in the yard.  For this we pay $100 a month in the smattering of water associated fees.  That's $33.33 per thousand gallons used.

The city wants to take away the 10% discount we received or were supposed to receive.  I haven't seen how much the city owes for not applying the discount since 2009.

Rather than come clean with Council on their decade long billing errors, city staff will propose taking away the conservation credit, the only means currently in place for citizens to get a portion of their ever increasing bill returned to them.

The Water Enterprise Fund Balance stands at $9.37 million as of 8-31-18, nearly twice the level the city cited as needed for a citizen rebate in November 2018.  Council dropped the regular review of the water fund balance for possible rebate.

There is no urgency to drop the conservation credit while staff look for other programs to incentivize conservation.  City Council should retain the credits until a substitute program can be designed, shared with the public and be evaluated for potential impact.

Update 9-30-18:  SanAngeloLive ran a piece on the proposed change.

Update 10-3-18:  City Council did not eliminate the conservation credit as proposed by staff.  They may in the near future when staff has another incentive program to offer in its place.