SAN ANGELO, TX — City Hall was firebombed during the City of San Angelo Development Corporation meeting Wednesday morning and it’s still burning. John Bariou, COSA-DC’s vice chair, took most of the time during the regularly-scheduled corporate meeting expressing his frustration with policies, procedures, manpower, and fiduciary decisions at the corporation. Bariou, known for his long Santa Claus white beard and tenacity to serve the community, arrived in San Angelo as a retired intelligence analyst with the U.S. Air Force who was educated in engineering. He said he applied those skills to open up a long-festering wound at City Hall.
At issue was the sovereignty of COSA-DC to perform its mission but the discussion exposed a long list of grievances and gripes held by some on the board and the corporation staff about how the City management treats the corporation.
The meeting began with the resignation of Chris Evatt who is the chairman, president and CEO of First Financial Bank in San Angelo. In Evatt’s resignation letter, he said that a recently amended City ordinance concerning conflicts of interest disqualifies him from continuing his two-year term. He had served 12 months on the COSA-DC board as of this meeting. The new law states that a member of a City board cannot serve if that board member is also involved with a non-City entity that receives revenue from the City. Evatt also serves on the San Angelo Chamber of Commerce Board and the Chamber has a contract with the City for managing the Destination Marketing Organization and for operating the Chamber’s economic development office. After reading his resignation letter, Evatt got up and left the room.
Then COSA-DC Board Chairman Max Puello called for the first agenda item that was presented by Bariou. In Bariou's opening remarks, he questioned the legal construct of COSA-DC’s founding document and COSA-DC’s current business relationship with the City of San Angelo itself. Bariou asked long-time COSA-DC Director Guy Andrews, who recently resigned over City management issues, to speak at the meeting.
COSA-DC manages the revenue from the half-cent sales tax the City of San Angelo collects. This portion of sales tax collected within the city limits is exclusively earmarked for economic development projects. In addition to financing hundreds of millions of dollars in development projects — such as the Hickory pipeline project — the corporation pays for a staff of four and contracts with the San Angelo Chamber of Commerce to perform cooperative economic development services.
Andrews said throughout his tenure, he felt uncomfortable with the contract for services that COSA-DC has with the City of San Angelo but never felt he had enough support during his tenure to challenge the arrangement.
Bariou alleged that the City Manager’s office has assumed authority over what items were to be placed on the COSA-DC board’s agenda. Then, Andrews added that he was disallowed from having meetings with his counterparts at in economic development at the Chamber unless the meetings included Mayor Brenda Gunter or City manager's staff. Andrews also noted that the City ordered what he thought was audit of the Chamber of Commerce and he expressed his discomfort with that. It was later learned that the audit was for only the portion of the Chamber’s budget that the City funded. Yet, Andrews alleged, he was chastised by the City manager’s staff for not being a team player when he expressed his concerns.
“I didn’t think I could tolerate another 30 days. I was fed up with the whole process and disingenuous way the City (staff) tried to dominate the economic development process,” Andrews said.
Andrews was paid $125,000 annually as the director of COSA-DC.
Bariou alleged that although each board member takes an oath to run the $10 million annual revenue corporation, “our hands are tied because our staff has been harnessed (by City staff). Our staff is serving a two-headed beast.”
“I question the authority of City management under this contract to assert things that has not been reviewed, discussed, deliberated upon, and ultimately voted on (with) a motion (by City council),” he continued.
Towards the end of his presentation, Bariou finally told the board the top reason for his concerns about the legal arrangement and control the City manager’s office exerts on the corporation.
“We need to have the provisions that will allow the corporation to act as an independent corporation to a degree because in [our type of ED corporation] things have historically gotten out of hand (in other cities) where the half-cent sales tax funds end up being a piggy bank for pet projects that are politically motivated rather than approached sensibly with an expected return on the dollar (invested) by the taxpayer,” Bariou said. “We do try to vet that and that is the purpose of this board.”
Assistant City Manager Michael Dane, who ultimately oversees COSA-DC’s operations and, with Andrews’ departure, is currently the acting COSA-DC director, countered that the board’s responsibility is to fund projects and what projects it funds “are subject to a political process.”
“So, to characterize that activity as ‘funding pet projects’ or a ‘piggy bank’ for pet projects… All of those projects see due process in which political figures are involved,” Dane countered.
Watch the exchange here:
Andrews offered two recent examples of where due process was not applied to projects funded by COSA-DC. He listed the Chadbourne Streetscape Project and a West Texas Water Partnership project. He said in both instances, the COSA-DC board was presented with marching orders to fund both projects without deliberation from the board. Andrews said one former board president challenged the authority of city staff to dictate projects to COSA-DC and he was told, “If you challenge it, you can be removed from the board.”
“I believe the corporation has become a cash cow that the City has attempted to control,” Andrews said.
Assistant City Attorney Brandon Dyson spared with Bariou somewhat throughout his presentation, questioning and clarifying some of Bariou’s assumptions. Bariou’s general complaint was that provisions that give the City manager’s staff control over COSA-DC are in conflict with State law. Bariou said COSA-DC as a corporation is a sovereign entity.
Andrews said, after the meeting, that one on the last straws to convince him to resign was a conflict with City staff over personnel issues. During the meeting, he said that the contract with the City forced COSA-DC to not only pay the salaries of corporation workers—himself and three others—but to also to finance the payroll of City employees in the finance department “that were not necessarily needed or required by our staff or this board.” At the same time, he said, he was not given the resources to plan an adequate succession plan to prepare someone else to take the reins after he retired.
He said the person selected to be Andrews’ assistant was forced to take a two-level downgrade in pay and likely had no other alternatives when he transferred to COSA-DC. Andrews didn’t name the person in his succession plan, but the room knew that was Nolan Sosa, who was also at the meeting.
Board member Joe Spano, who is the regional municipal director for Republic Services, stepped in and asked the board to cease discussion because he believed others on the board were blindsided by Bariou’s presentation. He said he was given no notification that the first agenda item involved the rancor he was witnessing. He recommended the board reconvene at a later date to resolve the conflict.
“Right now, it’s time to move on,” he said.
City Manager Daniel Valenzuela addressed the board and accused Bariou of attempting to interpret the law when he was not an attorney.
“Sovereignty, you brought up sovereignty. Everything you do runs through city council,” Valenzuela said.
Spano’s request for cooler heads to prevail was not heeded. Although the discussion of the corporation’s contract with the City eventually ended, a subsequent agenda item blew up the meeting again.
Dane presented comparative manning of various development corporations around the state located in comparably-sized cities. His presentation slides noted that COSA-DC had a budget of “about $2.9 million” and employed 5.25 economic development professionals. Other corporations had much larger budgets and comparatively smaller staffs. Dane also folded the two Chamber-employed ED professionals into his number of employees that, for some, seemingly overstated the headcount at COSA-DC. Dane’s presentation infuriated COSA-DC staffer Nolan Sosa, who took the opportunity to blast his boss.
“As a matter of public record, it is important that I clarify that this is not an apples to apples comparison and I am not certain who prepared it. The ‘total revenue line’, ignoring the misspelling of the word ‘revenue’ for a moment, we have $2.8 million (in revenue). That is not the total revenue for the San Angelo Economic Development Corporation that is reported to the (Texas) Comptroller. And while I can appreciate that this number is the number that we are honing in on, [it] is not an accurate apples to apples comparison. The revenue number is above $10 million per year. …
“I think we should frame [this] more appropriately because these discussions center around bodies as we deemed this morning. But they’re not bodies, they are livelihoods. They are people.
“I think that it is irresponsible to frame it any other way. It is important that we remember, for a matter of public record, that we do remember that we bring in over $10 million per year in revenue.”
He noted the balance of the $10 million finances projects, from water projects to affordable housing, to city parks, that enhance the vitality of the city. He said COSA-DC is a key organization that manages those projects, oftentimes in partnership with other City departments.
“To disregard this in any analysis is reckless. It is irresponsible. And I apologize for just a moment for breaking the quorum…
“This analysis is nothing short of offensive,” he concluded.
Watch a segment of Dane's manpower comparison presentation and Sosa’s reaction here:
Bariou responded to Sosa’s remarks with, “Michael, the engineer in me is coming out and I think we forgot to put the landing gear on the airplane.”
The Sept. 28, 2022 CODA-DC board meeting lasted 2 hours and 55 minutes. Watch the entire meeting here: