Originally published on the defunct Citystink.net site on October 11, 2012.
Originally posted on CityStink
Thursday, October 11, 2012
By Al Gray
The author, Al M. Gray is President of Cost Recovery Works, Inc., a provider of Cost Avoidance and Cost Recovery for America’s leading companies, businesses and governments desiring Superior Returns.
Yesterday, yet another Tee Center work session was scheduled by Augusta Commissioner Jerry Brigham. This meeting came on the heels of an amazing series of revelations, contradictions, and absurdities emanating from the fiasco of the first Tee Center work session last week.
On hand to present for Tee Center partner and soon-to-be manager were Mr. Paul Simon of Augusta Riverfront LLC and Mr. Bob Kuhar. Present to answer questions and representing the city was attorney Jim Plunkett.
A comparison of the minutes from that work session, the unsigned, undated 2007 Partnership Term Sheet, and the December 2009 special called meeting of the Augusta Commission bring forth a plethora of questions:
Who is Augusta Convention Center Management LLC, who is named the TEE Center Manager? Where is an assessment of this entity’s financial viability? Who are its principals? Don’t we need to know who they are to be sure that they are not paid as the contract dictates?
In the last work session Mr. Simon called for us to look at the Commission’s December 7, 2009 vote authorize the mayor to execute the Tee Center CORE agreement, but this document does not now exist, does it? Doesn’t this invalidate the motion that passed the Commission in December 2009?
The Tee Center Catering Agreement references “that certain Conference Center Management Agreement dated as of __________, 2012 by and between Caterer and City.” Where is this document? If it does exist, why were we not provided with it?
Let us see if we understand this correctly from the last work session: Mr. Simon said“So what I’m saying to the city in this (August 2007) term sheet we’ll give you land. Now what are we getting back for our land? We’re getting the kitchen. ”The term sheet says “The LLC and Augusta will allow the necessary modifications to the Convention Center to provide for the combined use of the kitchen, laundry, and back of the house areas.” The Term sheet also says that “AUGUSTA AND LLC AGREE TO THE FOLLOWING TERMS TO OWN, BUILD, AND OPERATE THE TRADE CENTER” Doesn’t this mean that the LLC agreed to bear costs in the term sheet for which it is responsible?
Doesn’t the 2007 Term Sheet say that “Augusta’s Capital Funds shall specifically not be used for items related to Kitchen Equipment, Laundry Equipment, or any Convention Center and Convention Center and/or Hotel capital cost.” When did the Commission assume its LLC partner’s cost of Kitchen Equipment?
Mr. Simon cites that the Tee Center cost estimates included $700,000 for kitchen equipment (later increased to $1.4 million without any change in the estimate) but why isn’t this a LLC cost to “own, build, and operate?” when the Term Sheet says it is an LLC cost?
The invoice for the Kitchen Equipment shows refurbishment of existing kitchen equipment. Whose equipment was this? Whose equipment will it become?
The RW Allen Contract caps the overhead and profit on a subcontract but the kitchen equipment invoice for roughly $1.4 million and data in Augusta’s possession is insufficient to determine whether this limit has been breached? Why don’t we insist on getting the information required to assure this limit has been met?
In the work session of last week, Mr. Simon and Mr. Plunkett said that the decision to build the Tee Center had to come before an operating plan was completed. They said that these contracts have to be signed before there is a plan. Doesn’t these contracts make the plan only a guide with no authority at the same time it gives the Manager and Caterer absolute authority to assign personnel? Isn’t there a Convention Center website listing very highly compensated General Manager, Catering Manager, Security Director, Finance Manager, and about 6 or 7 more overhead staff? Are these the same 11 full time, permanent employees Mr. Simon mentioned last week?
At last week’s work session Mr. Plunkett, the city’s attorney said this “The expense of the kitchen is an expense of the TEE Center. The maintenance of that facility, this equipment, is being shared basically between the Conference Center, the TEE Center and the hotels proportionate based on plates.If this is true, why do these agreements set it up so that all of the capital and maintenance costs of the Kitchen, which is now being referred to as the “Conference Center Annex” are born by the city? There is a separate fund for this in the Catering Agreement.
These agreements are so convoluted at this juncture, it is becoming apparent that no one understands them, including the attorneys. The commission would be wise to obtain the proposed plan, budget and procedure manual before agreement should be reached.
: Augusta Today and CityStink.net contributor Brad Owens was invited to speak at the October 10, 2012 and was forceful in his presentation of many of the foregoing issues. A key point made was that the land given up by the Augusta Riverfront LLC could not be conceivably worth the $65 million that Augusta has spent constructing buildings that primarily benefit the LLC’s two Marriott hotels.
MORE TO COME!