Originally posted on CityStink
Monday, August 27, 2012
By The Outsider
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.
The Augusta Commission will once again take up the controversial Reynolds Street Parking Deck at another special called meeting at noon today. Last Tuesday, at another special called meeting, Paul S Simon, president of Augusta Riverfront LLC, made his case for approving a parking contract between his company and the city. Representatives of Augusta Today and CityStink.net were there and challenged Mr. Simon on key points of the contract. You can see that video here–> The Day City Stink Took Over the Marble Palace.
To listen to Paul Simon talk, you’d think it was just a bunch “bloggers delaying progress,” but perhaps Mr Simon should look in the mirror to see who has really been stalling things. The commission conditionally approved a parking management agreement back in February. As the key word suggests, this agreement was contingent on certain key conditions being met, but we found that after months had passed, Augusta Riverfront LLC had not satisfied them, including deeding the land to the city’s land bank free of all liens.
This led to commissioners wanting to renegotiate the contract, but Paul Simon and Augusta Riverfront LLC have been obstinate, refusing to agree to contract controls and rights of audit and a more equitable sharing of profits and expenses with the city. Just this past week though, Commissioner Joe Bowles presented a plan that would give the city a more favorable share of any deck profits in exchange for adding a pedestrian skywalk over Reynolds Street to the TEE Center. This seems reasonable, and Simon has supposedly agreed to these terms.
However, the most important elements of the contract that must be included are the controls and caps on Labor Costs/Burden and materials costs and a rights of audit. These key provisions are vital because they will close any loopholes that Augusta Riverfront LLC could exploit at the detriment of the taxpayers. In regards to the rights of audit, as President Ronald Reagan famously said, “Trust, but verify,” and we know with the history of dealing with Augusta Riverfront LLC that everything must be verified on paper. This is why the rights of audit language being added to the contract is so important.
We have listed below the provisions that need to be included in the parking management contract in order for it to be approved today. If Mr Simon agrees to all of them, then we do not see a reason why it should not proceed. Commissioners have been made aware of these key provisions and we believe that majority of them will stand firm and see to it that they are included or once again there will be no deal. The ball is Mr. Simon’s court today. He is hoping he can strong-arm commissioners into agreeing to another last-minute lopsided deal that has been neutered of the necessary controls and rights of audit. He is hoping to ram this through in another special called meeting denying government watchdogs the right to speak out.
The most important provisions that must be added to the agreement are the rights of audit and capping overhead costs. The Rights of Audit clause will allow the city of Augusta to audit ARLLC’s books to verify their compliance with the contract. Also, it is imperative that none of ARLLC’s actual overhead costs can be billed to the city. If these key provisions are included in the contract it will go a long way towards improving the city’s leverage and giving assurances that the city cannot be billed for potentially unlimited overhead costs.
We hope the commissioners will ask that these key provisions be included in the actual language of the contract and not as footnotes or parentheses. These provisions must have the force of law. If Paul S Simon will agree to include these provisions then the contract should be able to move forward; it’s up to him.
Below are the provisions we suggest be included in the Parking Management Contract for approval:
Manager’s “records” shall upon reasonable notice be open to inspection and subject to audit and/or reproduction during normal business working hours. Such audits may be performed by an Owner’s representative or an outside representative engaged by Owner. The Owner or its designee may conduct such audits or inspections throughout the term of this contract and for a period of three years after final payment or longer if required by law. Manager’s records as referred to in this contract shall include any and all information, materials and data of every kind and character, including without limitation, records, books, documents, subscriptions, recordings, agreements, purchase orders, leases, contracts, commitments, arrangements, notes, daily diaries, management reports, drawings, receipts, vouchers and memoranda, and any and all other agreements, sources of information and matters that may in Owner’s judgment have any bearing on or pertain to any matters, rights, duties or obligations under or covered by any Contract Document. Such records shall include (hard copy, as well as computer readable data if it can be made available), written policies and procedures; time sheets; payroll registers; payroll records; cancelled payroll checks; subcontract files and any other Manager records to the extent necessary to adequately permit evaluation and verification of Manager compliance with contract requirements,
Owner’s authorized representative or designee shall have reasonable access to the Manager’s facilities, shall be allowed to interview all current or former employees to discuss matters pertinent to the performance of this contract and shall be provided adequate and appropriate work space, in order to conduct audits in compliance with this article.
LABOR COST DEFINED:
Cost to be reimbursed will be the actual wages paid to the individuals performing the work and the actual wages will be subject to wage maximums which shall be subject to the approval of the Owner.
The Manager is authorized to station a Parking Facility Manager and parking deck cashiers to man 3 shifts,either full-time or part-time at the job site. Charges by these personnel will be authorized only when performing their job related duties at the job-site location. (If it is intended that the wages or salaries of certain personnel stationed at the Manager’s principal or other offices shall be included in the Cost of the Work, identify separately the personnel to be included and whether for all or only part of their time, and the rates at which their time will be charged to the Work.)
No Manager personnel stationed at the Manager’s home or branch offices shall be charged to the Cost of the Work unless the Owner approves such charges in advance. Overtime wages paid to salaried personnel (if approved in advance in writing by the Owner) will be reimbursed at the actual rate of overtime pay paid to the individual. No time charges for overtime hours worked on the project will be allowed if the individual is not paid for the overtime worked. Any overtime premium or shift differential expense to be incurred by Manager for hourly workers shall require Owner’s advance written approval before the incremental cost of the overtime premium or shift differential will be considered a reimbursable cost.
LABOR BURDEN DEFINED:
When computing actual costs chargeable to the Cost of the Work for payroll taxes, the Manager shall give proper consideration to the annual limitations of the wages subject to certain payroll taxes.
Cost of the Work shall include the actual net cost to the Manager for worker’s compensation insurance attributable to the wages chargeable to the Cost of the Work per this agreement. The actual net cost of worker’s compensation shall take into consideration all cost adjustments due to experience modifiers, premium discounts, policy dividends, retrospective rating plan premium adjustments, assigned risk pool rebates, etc. The Manager may charge an estimated amount for worker’s compensation insurance costs, but will make appropriate cost adjustments to actual costs within 30 days of receipt of actual cost adjustments from the insurance carrier.
Any payroll burden related costs to be reimbursed which are not required by law shall be subject to advance written approval by Owner to be considered reimbursable. The Manager shall be required to submit a detailed breakdown of all such payroll burden costs along with all representation as to how the proposed actual billable cost will be computed. Such information must be reviewed and approved in writing by Owner before Manager may include such items as reimbursable costs. All such payroll burden costs shall be billable as reimbursable costs at actual verifiable cost subject to provisional maximums agreed upon in writing in advance by both parties. Adjustments will be made no less frequently than annually to account for actual costs which may be less than the provisional maximum costs previously billed.
MATERIAL COSTS DEFINED:
Material costs shall reflect the Manager’s net actual cost for the purchase of the materials, supplies and other items. Material costs shall reflect cost reductions available to the Manager due to trade discounts, free material credits, and/or volume rebates. “Cash” discounts (i.e. prompt payment discounts of 2% or less) available on material purchased shall be credited to Owner if the Manager is provided Owner funds in time for Manager to take advantage of any such cash discounts. Price quotations from material suppliers must be itemized with unit prices for each specific item to be purchased. “Lot pricing” quotations will not be considered sufficient substantiating detail.***