Frac Sand-Weary San Angelo Considers Third Trans-Loading Facility

The San Angelo City Council is considering annexing a large tract of land adjacent to the Old Ballinger Highway north of the city dump. Dallas-based Pinnacle Sands, LLC is proposing to build a frac sand trans-loading facility there next to the railroad that follows the Old Ballinger Highway. Trans-loading facilities are industrial areas where frac sand for oil field operations is unloaded from rail cars and into semi trucks for transport to oil wells. There is currently one such facility in operation in San Angelo on Hughes Street. A second is proposed for Hill Street behind Mayfield Paper. This will be the third such facility, and it will be the largest.

But since Lee Pfluger proposed a similar operation in the middle of town on Hill Street, citizens are scared and angry about frac sand in general, and the council is reluctant to put their stamp of approval on a much larger frac sand trans-loading operation. Though, this facility is proposed on the far northeast side of town, north of the city dump where not many choose to live. Even the city’s master development plan calls for land annexed there to be zoned industrial. (Though, all newly annexed land is zoned ranch estate until council changes the zoning by a separate ordinance.)

In 2009, the property owners of 500+ acres, from where this parcel of 175 acres is proposed to be annexed Tuesday, entered into a development agreement with the City of San Angelo. The agreement stated that if the land was to be used for anything other than agriculture or a single house (ranch) estate, the landowners had to petition to be annexed by the city.

Should the petition fail, the agreement reads, the landowners are free to do whatever they wish on the property without city interference, since the land would be in the less-regulated county. City Director of Planning Patrick Howard clarified this at the last council meeting (2:59:50).

Kill It!

Frac sand has sufficiently scared the council.

Mayor Dwain Morrison telegraphed a Machiavellian strategy to kill the facility by annexing the land, and then having the council deny the accompanying petition from the landowner to change the zoning from ranch estate to heavy industrial. “The only reason they are wanting to come into the city limits is to use our water. And this thing is going to use an awful amount of water,” Morrison said. Morrison detailed the problems with water shortages in Quail Valley, the community near the land. “There’s no water out there,” Morrison said.

Councilman Rodney Fleming said he’d rather kill the annexation now and let the landowners truck in their own water.

“The use of water would be limited to a toilet and a drinking fountain,” Pinnacle Sands, LLC’s Chief Operating Officer Fred Partlo said in the public comments. Morrison responded that he learned from Lee Pfluger’s Hill Street frac sand trans-loading dealings that the Texas Commission on Environmental Quality (TCEQ) was requiring Pfluger to continuously spread water on the caliche roads and lot to keep the dust down. Morrison estimated that this type of operation would consume a tremendous amount of water.

Parlo said that he hadn’t been informed of the TCEQ requirement.

Councilman Don Vardeman asked why Pinnacle wanted the land annexed at all. Partlo said he was fulfilling the terms of the development agreement. But he also thought the gesture would be appreciated by a city with very little industrial property on the tax roles. “My question to you is why does the city not want the tax revenue?” Partlo asked.

Partlo said that the facility would employ 12-24 people and offer other economic development benefits to the city as well.

Partlo said that Pinnacle could find another location to fulfill their needs, but this particular property is near U.S. 277 and the city dump. “[It’s] the best location away from as many people as possible,” he said.

Partlo described the facility as state-of-the-art in sand trans-loading. The reason the land required is so great is that the company intends to build a railroad loop off the main railroad track. Sand cars on the trains will dump sand into pits underneath them. An enclosed conveyor will move the sand into enclosed silos. Trucks will be filled from overhead silos, not from outdoor conveyors from the train to the truck like the Hughes Street and proposed Hill Street facilities do. Partlo said that the majority of the acres will not be used in the trans-loading itself, suggesting that the large tract of land will be needed to build the railroad track loop. The actual trans-loading facility will be on a small parcel of the land, comparatively speaking, he said.

Fleming asked Partlo if Pinnacle’s real intention was to have the city vote down annexation so that the company could proceed with the plan under less stringent county laws.

Partlo responded, “I want to do the right thing by the City of San Angelo.”

Council considered delaying the vote to allow more time for research. However, City Manager Daniel Valenzuela suggested that because the annexation requires two readings, and votes, that council could kill the annexation at the next regularly scheduled meeting today, Jan. 20.

Council voted 6-0 to move forward with annexation.

Conflicts of Interest

Before the Pinnacle discussion, Councilwoman Elizabeth Grindstaff recused herself even though the city attorney advised council that her employment at Texas Pacifico (the railroad company operating the main track along the Ballinger Highway) did not constitute a conflict of interest. Fleming vehemently stated that he felt it was a conflict of interest and all but demanded that Grindstaff recuse herself. Grindstaff, obviously taken aback by Fleming’s vehemence, promptly stood up and left the room. Councilwoman Charlotte Farmer asked Fleming if his real estate brokerage had anything to do with the real estate deal. Fleming admitted that he did have some dealings with Pinnacle in the past. “I’ve sold them property in the past,” he said (1:02:00). Fleming stayed and voted anyway.

What’s Next?

Today’s vote (Jan. 20) on the Pinnacle deal is will decide to annex or not annex the property. If council annexes the property today, there will be two more dates to consider the re-zoning of the newly annexed land from ranch estate to heavy industrial.

Update 9:34 a.m.

City council postponed the second reading of the annexation during Tuesday's city council meeting. City Manager Daniel Velenzuela said that Pinnacle asked for the delay.