Augusta Commission Buries Old Sins with New SPLOST Abomination

IMG_1347

Presentation of Al Gray to the Augusta Commission May 6, 2014

This holey bucket, made up as a prop for one of your SPLOST meetings, is stunningly perfect as a depiction of Augusta’s Sales Tax Program. Properly designed, your liquidity slowly meters out one hole in the bottom, but the way this one is, liquidity spurts out all over the place, leaving the tree to wither. Augusta has been to the well too often with a bucket like this and this might be the final trip before the well is dry.

When you have a $12 million parking deck funded with sales tax built on land you did not own, that is a pretty big hole. When you have $2 million of sales tax funded kitchen equipment you were not supposed to pay for, exchanged for land that was supposed to be donated, that is a doubly big hole. When those sales taxes build a facility that drain the general fund, to the tune of $250,000 a year for 50 years to pay staff that were free under another agreement, that hole becomes a gaping maw. When you use sales tax to fund a municipal building and don’t use the right contracting, $20 million doubles to $40 million, on the way to $65 million. When you don’t recapture what contractors owe you, you lose $750,000 on your sewage contract, close to $150,000 on an office building, and untold $ millions on a convention center. Those are the big holes. The liquidity lost from myriad smaller ones may be greater, because Augusta doesn’t even have a sales tax program control manual built into its sales tax management contract.

The liquidity coming in from SPLOST, shouted to the heavens in timely initiatives designed to promote the SPLOST vote, isn’t there and won’t be there. For instance, past Splosts made streams of interest income that have evaporated and been further diminished by use of high cost or inefficient banks, as Columbia County may be learning.

People get excited about lining up with the holes in your new SPLOST too. The Marriott folks want a $1 million skywalk, we see. Before giving them the money, which a former commission approved, wouldn’t it be prudent to see if there are offsetting charges from Augusta back to the Marriott? The Augusta citizens whom I was helping two years ago looked into several areas potentially offsetting that $1 million but were stonewalled by Fred Russell. Most of those centered on the Conference Center contract that was extended.

The biggest hole of them all is a chasm where truth should be. When the “news media” is so embedded in the subject of a story, as the Chronicle was with the Convention Center management, even their closest allies lose. Poor Rick Allen, the Tee Center contractor, believed what he read in the daily newspaper and became so un-witting that there were any loose ends that he accepted $7,000 in campaign donations from the top Marriott executive.

Augusta has another year to take the time to fix all the holes in SPLOST while the city and the region wrest with the burgeoning TSPLOST debacle which centers on Augusta also.

Take the time. Fix the holes. There are not many whole buckets of money left.

Conflict in Columbia County?

Would y’all just look what we have here! In April 2010 the award of Columbia County’s Major banking agreement was on the Columbia County Commission agenda. Uncomfortably, three Commissioners had stock in Georgia Bank in Trust at the time of this vote. The county attorney seemed concerned about the whole area of ethics but it looks from up here in the pine woods that the entire commission was prepped to put on ballerina slippers and tiptoe through the minefield of awarding the county’s mass banking agreement to, well, Georgia Bank and Trust.

District One Commissioner Ron Thigpen was Chief Operating Officer of GB&T (very recently promoted to President). The county attorney found he could avoid the technical definition of a “Conflict of Interest” by recusing himself from this, an official vote of the commission. The county attorney found that the other GB&T shareholders Ron Cross and Charles Allen, Jr., held less than 5% of the bank’s shares and the bank being publicly held fit another exception in the Ethics Ordinance. The final step in the fanciful footwork that carried them to apparent safety was getting the not-ensnared commissioners Scott Dean and Trey Allen to bless the choreography and allow Cross and Charlie Allen to vote, which they did, awarding the banking deal to their bank.

Did the commission gracefully tiptoe across the ethics minefield on gilded slippers, as they would have us believe? Or were they really tap-dancing across it wearing snowshoes?

One of the Rons sure looks like he stepped on one of those Vietnam -era “bouncing betty” mines with a slow trigger. After all, it has taken 4 years for the damage to pop up and show itself to the taxpayers of Columbia County.

The mine had “Appearance of a Conflict” written all over it. The shrapnel might just now be striking. Wasn’t the key issue for Cross and Allen really how much their stock made up of their total assets and how much they stood to gain? How could Thigpen make myriad impartial decisions, beyond just that commission vote, like whether to increase or pay down debt when his bank stood to gain or lose revenue from the county’s deposits there?

Coming up next in the series is “Blame it on the UFO!”

-AF

The Costly Energy Bills from Hardie Davis

This week Augusta radio talk show host Austin Rhodes of WGAC was heard being dismissive of the 7% increase in homeowner electric utility bills over the past five years from the controversial Georgia Senate Bill 31, which passed in 2009 with help from Senator Hardie Davis. SB 31 was heatedly debated because the bill guaranteed Georgia Power a separate 11.5% return on two new nuclear reactor units being constructed at Plant Vogtle on the Savannah River in Burke County, giving opportunity for all manner of cost-shifting hanky-panky. The law also came under fire for paying advance profits of over $1 billion over and above the costs of building the units. The Georgia Public Service Commission, who had the staff to evaluate the technical parts of the bill and who actually has the rate setting authority in the state, was bypassed by the legislature, prompted and cheered on by a flock of as many as 70 lobbyists clogging the aisles. Finally, the legislation exempted industry from the onerous special rate increases, meaning that the full burden falls on small businesses and residential payers.

Augusta’s Senator Hardie Davis was hardly alone in focusing on the jobs created for several thousand workers, many of them temporary construction craftsmen, while disregarding the costs to the millions of Georgians of the burgeoning rates.

Let’s take a look at the effects of SB 31 so far on a residential power bill. On top of the SB 31 costs, one must also add the additional 1% TIA 2010 or TSPLOST tax that Hardie also voted for. The Hardie Tax and Rate Increase Total is nearly $13.

Hardie Power

Now consider how much the wages to cover that 7% increase have increased since 2009 to the latest available in 2012. WHOA! The average Georgian has actually lost almost another percent because of wage reductions. (Now to be honest the TSPLOST tax did not come in until 2013 but it certainly is in the mix now.)

The Hardie cost increases are compounding every year against falling wages and salaries.

To conclude, that is a power play Augustans cannot afford.

All the confirmation Austin and everyone else should need was said by fellow WGAC show host Clark Howard in the clip below.

Hardie Davis is Georgia Power’s best friend. Can Augusta afford him as its mayor with such disregard for the people?

Government Watchdogs Help Save Richmond County Taxpayers $6 million


Originally posted by CityStink
November 13, 2012
Augusta, GA
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.
It began calmly enough for this correspondent in August 2011. Another chapter in life had been closed with the disposition of all commercial property in Evans, which was our family’s investment of a lifetime.  That adventure of maximizing returns from that investment had required leveraging up multidisciplinary contract and regulatory review skills to a new level in combating hostile forces inside of Columbia County government. The comfort of total retirement beckoned until zero-interest-rate-policies of the Federal Reserve attacked all safe income streams. Thoughts crept in about leveraging up the entire old repertoire of skills on a grander scale, but how?
Along came Deke Copenhaver’s ill-fated attempt to get a downtown stadium for a group headed by former Baltimore baseball great Cal Ripken, Jr.  The whole deal looked suspect all the way from the woods of Lincoln County and a tiny band of opponents rose up to combat the project. This just happened to coincide with a preliminary secretive review of Augusta’s major contracts for the water treatment plant, sales tax project oversight, and the TEE Center construction. The activists had a meeting that I drove down to attend. We quickly found and developed common bonds.
Our first success came a year ago this month, with our opposition to the Laney Walker Bethlehem Overlay District (LWBOLD). We successfully got the Augusta Commission’s motion to approve scaled back to the correct, much more compact Foundry Node, rather than the huge overall LWBOLD. This early project coincided with the creation of the CityStink.net blog (the name being a parody of Sylvia Cooper’s City Ink column in The Augusta Chronicle)  and a social media group called Augusta Today, a parody of the name Augusta Tomorrow — the latter being a group of elite self-appointed downtown power-brokers who are responsible for many of the ill-conceived taxpayer funded boondoggles over the past 30 years in Augusta.
A large element of success was a core group comprised of Augusta political ‘gadflies’ at whom the Augusta Chronicle was prone to scoff, researchers, and amateur media types. This group collaborated in a number of issues including overlay zoning, Magnolia Trace, the parking deck controversy in which we broke the story about the undisclosed liens, Laney Walker housing, TSPLOST, the 12thDistrict Congressional election, various Augusta contracts, the DDA, the clock and finally the TEE Center.
Former Mayoral candidate Lori Davis emerged quickly to take the lead in arranging for Georgia Open Records Act Requests and turning the results into hard-hitting reports that were promptly delivered. Kurt Huttar and Tom West are fantastic data hounds and analysts whose work would make all manner of Augusta players wet their pants if the research were released. Dee Mathis was an early core group member who took Laney Walker to heart with a rousing defense of property rights. Andy Cheek is an experienced Augusta political hand from his days on the Augusta Commission. Brad Owens is a now successful security contractor, in addition to his familiarity with the minefield of Augusta politics. All have made their presence known in Augusta.
Potential and real savings for Augusta were identified along the way including a possible $300,000 or so on Laney Walker housing, an apparent $167,000 overcharge on a major contract, perhaps $750,000 over the life of parking deck contracts, and now more than $6 million on the TEE Center Contracts, according to Commissioner Corey Johnson and various news reports in the aftermath of last Thursday’s vote to approve  considerably-amended Tee Center agreements after Augusta Today founder Brad Owens and this writer met with city and manager attorneys,  and three Augusta Commissioners. Johnson put the savings as high as $500,000 a year and our analysis confirms that the savings could easily exceed $400,000 a year between the contract changes and the safeguards to come in the Annual Plan process.
Media reports can be found at Georgia Public Broadcasting’s site which had this to say: “The revised deal cuts the operating losses in half from about $900,000 originally, and it gives Augusta officials the option of renegotiating with the management company after five years.” George Eskola, of WJBF NewsChannel 6 offered the headline “Proposed TEE Center Contract Change Could Save Augusta $500,000His report appears below.
Augusta has never seen anything quite like this grass-roots citizens movement made possible by the use of digital media.. The response has been overwhelming. Our media vehicles of social media groups and CityStink.net have gained a following among the legal, accounting, public policy, and business communities.
The achievements are not bad, not bad at all, for an operation held together by not much more than duct tape, baling wire, and twine.
Augusta Administrator Fred Russell has characterized Augusta Today as a group that is permanently discontented with the TEE Center contracts, saying “We have listened to everything they have said to do and done it, and now they’re not happy.”  Seven of ten commissioners listened better, delaying approval, and securing $400,000 to $500,000 in annual savings.
Augusta Today is happy today, Fred.
In closing, the phrase from District One Commissioner Matt Aitken “It is time to move Augusta forward” suits best. Let’s do that, keeping in mind that approaching problems from all angles makes for the best path forward, one less filled with mistakes. Deke’s and Fred’s way are no longer the only options on the table, when Augusta can save money doing otherwise.
On a more personal note in closing this first annual report card, leveraging up what worked so well before in the corporate and real estate into the glaring lights of Public Policy has been very satisfying. Thanks to each and all who have offered kind words of praise and support.  Thanks even more to the Augusta Today group for their commitment for positive change in government and saving the people’s money.
Who knows where this might end. Maybe what starts in Augusta won’t end in Augusta.***
AG

Taking over the Augusta Commission Chamber

In early 2012, Augusta faced a dilemma. It had constructed a $15 million parking deck that it did not own. Local activists with the Augusta Today facebook group and CityStink.net had alerted the media when their research of real estate titles at the Clerk of Court’s office showed that the land was not owned by the city.

Cost recovery analyst Al Gray and Brad Owens took over the commission chambers to address the crowd and insist upon rights of audit, in what was seen as a one-sided contract.

Augusta Sales Tax Program Management Contract Extension

Augusta’s Sales and Use Tax-funded project management firm was up for contract renewal. After behind-the-scenes support of the commissioners, the contractor reduced the contract price by about $184,000.

Unraveling Rick Allen Before His Time

By: The Arrowflinger

This is your Many Arrows Moment for Tuesday, June 18, 2013

If last Friday Morning, between 7:00 and 8:30 AM, US Congressional District 12 candidate Rick Allen didn’t feel like a mouse between two cats, he should have.

Rick was on the Talk of the Town Show in Augusta with Renee and Doug to promote his newly-announced candidacy for that 12th District seat now held by the despised, at least in Republican circles, John Barrow the Democrat.

Renee and Doug are probably just plain giddy about the $6 million that the Republican Congressional Campaign Committee is said to be spending on that race. That is a lot of wampum for the media in good old Augusta, Georgia, with Renee and Doug figuring to receive a generous portion.

Before we start calling Rick the $6 million man, there is the not small matter of a primary to be fought and won. Talk of the Town figures to be in the thick of that mix on the way to Allen’s coronation as the GOP nominee……and in the flow of funds, first from Allen then from the RNCCC.

The feline grins around him will be seen in every media outlet on Augusta for the next 14 months. A poor mouse could get plumb frazzled to death being bandied and toyed with that long! Allen was on WGAC with Austin Rhodes the previous week, unwitting that the boys of Beasley were sizing up his wallet too.

Overturning Stone – rival John Stone- should be easy. What can go wrong? To the radio talkers, Rick will be more fun unraveling than a ball of yarn.

Stay tuned to Talk of the Town as this story develops Monday thru Friday from 7am – 9am streaming @ www.iTalkUS.com. And Live on 1230 AM!

Turn on the Austin Rhodes Show from 3 to 5 PM on WGAC AM 580 and FM 95.1.

Who knows, one day an Arrowflinger might call in.

TAF

Dekefeating the Tyranny of Credentials

The
Aurelius Principle

A Multidisciplinary Approach
Works Wonders

“Let it be your constant method to look into the design
of people’s actions, and see what they would be at, as often as it is
practicable; and to make this custom the more significant, practice it first
upon yourself.”
– Marcus Aurelius

On Tuesday evening, September 17, 2013 Mayor Deke Copenhaver in an Augusta City Commission meeting challenged me to supply my “credentials.”  He cut me off and would not let me respond. Since he asked for it – here goes.

Fact of the matter is I don’t really have any credentials. I have something much more effective and powerful that I call the Aurelius Principle. What the principle stands for is looking at major transactions globally or taking a multidisciplinary approach. Clients get a whole lot of angles on a problem in one pass that just an accountant, lawyer, administrator, engineer, planner, procurement agent, or other professional cannot provide.

The Aurelius Principle works this way: it uses an opponent’s own power, authority, records, and documents against him. If you think about that, it is something that the very best attorneys use. If one does it really well, he might find himself with a new lucrative line of work. For example, the in depth study of the Augusta convention might lead to marketing the same strategies that the management company there used to secure $3 million a year taxpayer subsidy.

The Principle is time-tested and simply does not fail, because it works on all sides of valuable transactions. The technique has been leveraged up to ever higher planes. It worked well enough for me to hardly hit a lick at a snake and retire early. I don’t have a lot of references, but I do have the Mayor’s records. He will find those a lot more convincing than “Credentials”.

Let’s try to weave an aspect of the principle into the question that Deke Copenhaver asked. Marketing personally to Fortune Magazine listed company executives was nearly impossible but then I sent a letter to  them, with a great white shark eating their precious logos in a window envelopes! It worked! CFO’s whom I needed to spent $50,000 on to contact contacted me!

The renegade marketing added to an enquiry list from potential and eventual clients of Cost Recovery Works, Inc., its predecessors, and mine that included these names, which just might be impressive even to the Mayor.

Tenneco

 

Fort Sterling

 

Maryland Cup

 

Procter and Gamble

 

USG

 

Hanes Brands

 

Sara Lee

 

Con Agra

 

National Gypsum

 

Georgia Pacific

 

Lilly Tulip

 

3M

 

Sunbeam

 

McDermott

 

Johnson and Johnson

 

Fulghum Industries

 

Lowes

Medimmune

 

Home Depot

 

Corning

 

Bass Pro

 

CarMike

 

W.R. Grace

 

Eli Lilly

 

Bristol Myers Squibb

 

Intel

 

St Joseph Foods

 

Georgia Iron Works

 

Boise Cascade

 

Stone Container

 

Fort Howard

 

Weyerhauser

 

Willamette

 

Packaging Company of America

 

Temple Inland

 

Fluor

 

 Lenzing Fibers


 Kahn’s

 General Electric

 Hillshire Farms


 Fort James

 Unilin

Jacobs

 

Fulghum Fibres

 

Donahue

 

 Duke Energy  Sweetheart Products  Hoku Corporation

 BCE Outdoor

 Control Plus  Arale Woods LLC

I performed work for 29 of those companies over the years as an employee, contractor, or subcontractor.

Leveraging up the Aurelius Principle in Augusta and Georgia has made for amazing findings and real results, especially during the Augusta Project since 2011.

To sum up, I knew I might be rusty and used Augusta like my very own laboratory to sharpen my skills. Not many rats escaped.

 

          AG

The author is President of Cost Recovery Works, Inc., a provider of multidisciplinary contract cost avoidance, cost recovery, and public policy services to industry and government.

Mission “Impossible” In a Slum

Originally posted September 18, 2013

The Augusta City Commission on Tuesday, September 17, 2013 heard the following raucous presentation, followed by a heated discussion. Full text follows the video.

 

Mayor Copenhaver and Commissioners:

Thank you for allowing me to speak tonight in opposition to designating the Downtown Business District a SLUM.

When words no longer are required to carry their true meaning and devolve into meaning the opposite, all men and women should shudder, for in that immoral state what is the meaning of right and wrong?

Let’s look to the Department of Community Affairs Guideline on how to do Urban Redevelopment in Georgia. It cautions against this Commission surrendering all of its Redevelopment Powers to an Authority, but this resolution breathes life back into a body possessive of those powers. It says there needs to be public and private input gone missing in these proceedings. It says beware conflicts if you have a DDA. It says the redevelopment district can be a single parcel, not requiring over 1000 of them in 595 acres. It cautions on the use the broadened power of eminent domain and the power to single out individual landowners for reward or punishment. It says the redevelopment plan is easily changed so you can start with a small district to fund the municipal building with tax exempt bonds, then expand it. These DCA guidelines have neither been followed nor met in myriad ways.

When you allow words to lose meaning, you allow debate over their meaning to obscure that which is a real public menace. The people rightfully fear monsters hatched in the dark will go on to feast – on them – in the dark. The DCA guidelines shine light on the process, so why not insist that they be met?

Questions about this resolution are legion. Is it responsible to fund unlimited debt service with SPLOST revenues that have not been approved yet? Won’t the net result force funds from 99.8% of the rest of Richmond County into this district? Can’t a much smaller Opportunity Zone be created? Can you recapture powers of the Urban Redevelopment Agency? What is afoot with using the very different Redevelopment Powers Act in a coterminous TAD that is so secretive?

Pictures are said to be worth a 1000 words and the Mayor will hold me to about 550, so let me conclude with 2 pictures. Here you see me with my most important client, my mother.

She was confronted with a county overlay zone that singled her property out for restrictions that would have gutted the value of her commercial site. One commissioner, 2 planning commissioners and staff said it was a DONE DEAL with one opining that her land should be acquired by the county for a park. She looked to be all alone until other property owners were awakened.

The people of Augusta are in similar peril. Arrogance around property rights exhibits ignorance of how deep and wide the concepts of fairness and “do unto others” hold our world together. Here you see how the Communist Chinese had to yield to it when elderly homeowners refused to surrender to the government.

The ability under Augusta’s charter to pass any outrage at any time with 6 votes coupled with this SLUM resolution would leave them with no hope.

Flush “SLUM” and let’s banish the much over-used word “Impossible” from describing Augusta. Let’s do it now, do it with conviction and do it together.  Nothing is impossible to those who demand honor instead of a SLUM.