Showdown in San Angelo: New Land Based Version?

San Angelo's City Council will consider leasing 100 acres in its Industrial Park to Lucas Oil for $1 a year.  The July 17 agenda states:

Consideration and possible action regarding a recommendation by the COSADC Board to approve leasing approximately 100 acres of Phase 2 of the Industrial Park to Lucas Oil at a lease rate of $1.00 per year, for a period of five (5) years, requiring Lucas Oil to hold a minimum of one (1) race per year on the leased land, releasing the deed restrictions limiting the use of the land for industrial park purposes only, to allow use of the land for off road racing, authorizing the City Manager or his designated representative to negotiate and execute said lease agreement and any other matters in connection there to

Lucas Oil conducts the annual Lake Nasworthy Boat Races, known as Showdown in San Angelo. The agenda packet showed:

Summary:
At its meeting of April 11, 2012 the COSADC Board approved leasing up to 100 acres of phase 2 of the Industrial Park for use by Lucas Oil as an Off Road race track. In order for this to occur, an existing deed restriction imposed by Council at the time the property was conveyed to COSADC must be revised to eliminate the restriction that the property can only be used as an industrial park.

I'd heard rumors the city wanted to use Twin Buttes for off road racing, but didn't put much stock in those.

History:
The City has been approached by Lucas Oil as a possible venue for one or more races per year in their off road racing series. They require approximately 100 acres to create the race course, parking area, fan area etc. COSADC staff was approached by City staff to investigate the possibility of utilizing a portion of the Industrial Park for this purpose. In researching the records it was discovered that the original deed to the Park included a provision that “the property shall be used for an industrial park and no other purpose.” There was also a concern that due to the fact that Phase 1 of the Industrial Park was constructed using a grant from the Economic Development Administration (EDA) that this might in some way impact that grant. Staff contacted the EDA regional office and verified that use of Phase 2 property would not impact the Phase 1 grant.

The 2012 Lucas Off Road Racing Series season schedule runs March 31 thru October 28. There are currently seven venues, with 8 race events of 2 days duration each. Current race locations are as follows:

Firebird Raceway, Chandler, AZ
Lake Elsinore Motorsports Park, Lake Elsinore, CA
Speedworld Off Road Park, Surprise, AZ
Miller Motorsports Park, Tooele, UT
Glenn Helen Raceway, San Bernardino, CA
Wild West Motorsports Park, Sparks, NV
Las Vegas Motor Speedway, Las Vegas, NV

The types of Racing typically include :

Trucks-Pro 4 Unlimited, Pro 2 Unlimited, Pro Lite Unlimited, & Super Lite
Buggies – Pro Unlimited & Limited
Karts – Modified, JR2 &JR1

Lucas anticipates holding one race per year in San Angelo, possibly as a single day of racing as opposed to the normal two day race weekend. They also anticipate needing to subsidize drivers to get them here at least in the beginning. The anticipated draw is similar to the Boat Races. Lucas has visited San Angelo during the rodeo and likes the reception given to visitors and competitors as well as the way Boat Race drivers are treated here.

Given the mention of subsidy, this next item warrants examination

Financial impact:

To be determined

Surely Lucas Oil had an idea of how much it would cost to launch an inaugural off road race in San Angelo.  The question is how much the City will kick in between its various economic development arms?  A search of Lucas Oil on COSADC's website produced no results

Other Information/Recommendation:
Staff recommends approval

Might off road be the future of San Angelo?  It makes sense in light of the city's deteriorating streets.

San Angelo's Budget Priorities

City Council July 20, 2012 Budget Presentation

City Council held a budget workshop on Tuesday, July 10.  I listened to the meeting on Channel 17 via the web, but only heard audio.  The video feed didn't show on my computer.

While no final decisions were made, Council discussed a few highlights:

1.  Identifying $3 million a year for street maintenance and replacement.  Currently, only $1.5 million is available for General Fund capital projects

Due to poor upkeep the city is behind on street maintenance, to the point some streets need total replacement.  The operating budget has an additional $1.2 million for seal coating, where the city will take back over a service currently privatized.

Worst case scenario shows $155 million in long term street capital needs.  Council wants to dig out of this pothole with cash, not borrowing.  That's like saving up for your home and not buying until you can pay cash.  Therefore, council looked for operating savings:

2.  Shifting animal service functions to an area nonprofit.

The aim here is to reduce the amount the city spends on animal services.  The City believes grant funds would support an area nonprofit, although Interim City Manager could identify no foundations currently interested in supporting this move.  Other possibilities include:

3. Closing parks and shifting the Texas Bank Sports Complex to a private facilities corporation.

I find it ironic that items #2 and #3 are privatization, while #1 is re-publicization of a formerly privatized function, since judged inadequate.

4.  Installation of parking meters downtown that would be in effect during the day and evening.

Many cities are privatizing their parking functions.  The City of San Angelo might install parking meters, which could be privatized later.  .  

Health insurance arose at the end of the meeting.  The hope is that no new money is needed, but that's due to tow factors.  One is the city's experience to date, while the other is the city's byzantine budget process which never adjusted the budget for the exclusive provider arrangement with Community Hospital.  In effect, there's a budget sandbag to absorb a minimal increase. 

Overall, council did not want to pass the total budget increase onto citizens in the form of fee or tax increases.  Mayor New noted the City could reduce employee headcount, at least in relation to other cities which employ fewer (but pay them more).

These elements simmer in the 2012-2013 budget stew.  The heat's fixin' to turn up. 

ASU's AGB Presidential Search

Three weeks ago Texas Tech launched a website for Angelo State University's Presidential opening.  TTU wanted to give the public the ability to nominate people for the position, which arose from Dr. Rallo's accepting a Vice Chancellor of Academic Affairs position at Tech.  Here's the chronology of events:

May 18 - Rallo named Vice Chancellor

The timing of Rallo's promotion seemed to knock newly appointed Vice President & Provost Dr. Brian May out of the running (at least in my mind).  How could someone just months into that job be named President?  Could they even legitimately throw their name in the hat?

May 29 - Search committee named

The Committee is corporate dominated, which could favor Dr. May, given his 2008 Citizen of the Year Award from the San Angelo Chamber of Commerce.  Other committee members could conceivably benefit from the internal promotion of Dr. May, as a provost slot would need to be filled.  If Dr. May couldn't credibly put his name in the hat, who could?.  The public.

June 18- Website for public nominations

There are two rumors running around campus.  One has May with a credible shot.  The other calls for an outsider to clean up ASU's spotty accreditation status and fiefdoms, which allow for personal patronage.  That outsider could be from TTU.

I have friends who think very highly of Dr. May and he could make an excellent President.  That said, it'd be amazing for someone new to the top academic position to parlay that into a Presidency in four months.  But I've been amazed before and will be again. 

Does the AGB in AGB Search stand for "a good-ol' boy"?

Council's Budget Workshop

San Angelo City Council members will work on the budget for the 2012-13 fiscal year during their July 10 meeting.

Summary:
Detailed discussion of needs such as street maintenance, raises, property tax relief, etc. In order to fund these needs, we will discuss options such as increased user fees, franchise fees, hotel occupancy tax, etc.

After saving a projected $480,000 via an exclusive provider arrangement with Community Medical Center, council didn't touch on health insurance during their June 19 meeting.

Council plans for the coming year by comparing numbers to this year's budget, not actual figures with projections to year end.  They effectively guess the coming year by looking at this year's guess, omitting the accuracy of the current guess.

As the city never revised the health insurance budget for the EPO savings, an estimated $480,000 is available to fund health insurance increases.   For years the city effectively provided no increases in its health insurance budget.  When increases came employees paid more than the city.  Likewise, when savings arose the city took the lion's share.  I expect that trend to continue.

The City is willing to spend new money, just not on health insurance.  Evidence is the Master Developer request for qualification.  It identified a number of money pots, varying from direct cash incentives to tax rebates to tax abatement.  It will be interesting to see Council's health insurance and master developer decisions.

Shielding White House E-mails: BP & Katrina

The Bush and Obama White House cited executive privilege in not releasing e-mails from their respective Gulf Coast disasters.  Obama's BP "Oil Spew" and Bush's Katrina "Toxic Gumbo" claimed lives before both administrations cried "unprecedented disaster." 

Investigations into White House disaster operations weren't able to locate the honesty promised by George W. Bush or the transparency offered by Barack Obama.

 A government lawyer offered in the BP case:

“Disclosure of these documents would chill the open and candid discussion of internal opinions, ideas, and strategies” among federal policy makers, including the Executive Office of the President, during a future incident like the Deepwater Horizon oil spill."

By hiding past mismanagement, the government will be able to do better next time?  Hardly.

How many more unprecedented disasters will occur before citizens' right to a fair and complete investigation outweighs a president's right to privacy?  Privacy, it's the principle that cuts one way.  

Energy Wholesale Prices to Rise 50% in August

The Standard Times reported:

The Texas Public Utility Commission voted Thursday to raise the wholesale electricity price cap by 50 percent this summer in a move it hopes will spur construction of new power plants.

The vote by the three-member commission, all appointed by Republican Gov. Rick Perry, raises the wholesale rate cap on Aug. 1 from the current $3,000 per megawatt-hour to $4,500. And there could be more to come. Commissioners are already considering tripling the price to $9,000 in 2013.

This move is to stave off bankruptcy for Energy Future Holdings, formerly TXU.  Private equity underwriters KKR, TPG and a smattering of big Wall Street names bought TXU in 2007.  The buyout group made major promises to consummate the deal.  I imagine most are unfinished given Energy Future Holdings precarious financial position.

PEU investors wrote down their equity holdings from $8 billion to $1.6 billion (20%) in early 2011 (source WSJ).  According to Dealbook that fell to $800 million (10%) in early 2012, . Bloomberg recently reported another haircut, with EFH equity down to $400 million or 5%.  The Dallas Observer opined that EFH could soon go belly up, causing a ripple in the financial world.  Thus the need to socialize the losses, which takes "political will" to execute..

EFH has the political connections to influence state policy.  KKR and company loaded the EFH board with heavyweights.

The former US Secretary of State James A Baker, III will serve as advisory chairman to the investment group of new owners. William Reilly, chairman emeritus of the World Wildlife Fund and former EPA Administrator, will join the board of directors and lead their efforts in making climate stewardship central to corporate policies. Donald L Evans, former US Secretary of Commerce; James R Huffines, chairman of the University of Texas Board of Regents; and Lyndon L Olson Jr, former Texas State Representative and former US ambassador to Sweden, will join the board of directors.

A tripling of wholesale energy rates from $3,000 to $9,000, a 200% increase in one year is targeted to save EFH.  KKR raised $4 billion for energy and infrastructure investments.  They won't throw good money after bad.  Thus the state will use its power to make middlemen and consumers pay.  Meanwhile, PEU's love investing in Texas energy.  Privatize the gains, socialize the losses.  It's a familiar refrain.

Update 10-24-12:  The race is on to $9,000 peer kilowatt hour.  Vote is next week.

No New Money for Health Insurance

San Angelo City Council's summer budget guidance suggests no new money for health insurance.  Budget discussions show $1.15 million in new revenue and nearly $3 million in reasonable requests, none of which were employee/retiree health insurance.

Budget numbers showed a half cent property tax decrease and $435,000 in tax rebates to three area employers.  That money is not available to help with any increases in health insurance premiums for city retirees/workers.

Council discussed 3% raises, which could be distributed on a merit basis.  How much might rising premiums eat into this?  The City's recent history had the lion's share of cost increases going to employees/retirees, while the savings went into city coffers. 

City Council cancelled their July 3rd meeting, setting a budget workshop for July 10.  The odd thing about the city, which received an award for financial transparency, is Council is dealing only with budget numbers, proposed vs. current year.  There is no actual history, i.e. what happened and what we project to happen in the final months.  It's an intelligent guess vs. another in the making.  Watch the end of the June 19 Council meeting for confirmation.  I don't expect this information to make the minutes.