Dear Arthur, Tipped Balls Hurt

Originally posted March 12, 2013

Are the Falcons underestimating the Atlanta City Council?

By Al Gray

As University of Georgia grads know, an untimely tipped ball tantalizingly close to the goal line can kill championship dreams. The Atlanta Falcons have executed a well-orchestrated plan over the last two years to carefully plan and execute the win of a free $1.2 billion new stadium. Now the weakened opposition is down to an unlikely, untested, last line of defense called the Atlanta City Council. Its members were spectators suddenly called into a game with no advance preparation. Only a disaster can stop the Falcons now. Surely a bunch of city council members can’t muster anything heroic. Everything has been so perfectly played that half of the backfield has been cloaked with invisibility.

Political maneuvers bail out GWCCA, get Falcons to first and goal

Moments after the opening whistle in 2010, the Georgia World Congress Center contingent on the team realized that they had a huge problem. If they fully surrendered stadium operations to the Falcons, not only would GWCCA be giving up $20 million a year in hotel motel tax funding (Consultants’ numbers lead to totals of $1.2 billion over 35 years), it would be giving away $15 million a year in net income on a successful Georgia Dome operation. If someone only looked at the financials there could be trouble. A worse problem was the $2 million to $3 million in GWCCA overhead that the Georgia Dome has been absorbing for years. Then someone realized that money is fungible and that the Atlanta Convention and Visitors Bureau (ACV partnership with GWCCA could be used as a conduit to shift costs equivalent to those then covered by dome operations. In 2011 the team got a new 1% hotel motel tax passed worth $6 million a year to expand the ACVB’s marketing of events in the World Congress Center and elsewhere. About $4 million of the new tax appears on the GWCCA’s 2012 FY financial statements. That might have tipped some people off, so GWCCA’s Frank Poe proclaimed, truthfully enough, that the new tax was not going toward stadium construction. The contract between ACVB and GWCCA was modified in 2011 uneventfully. The cost shift will be a handy tool.

The series of plays in the General Assembly enabling the Falcons takeover extended the hotel motel tax and, just last week, killed a conservative bill strengthening right to work laws that would threaten the “community investment” now needed to have any chance at victory in Council chambers.

Another saving grace in the potential damage to GWCCA’s finances is that Georgia governor Nathan Deal, who has had a major role in the stadium negotiations, and GWCCA’s Frank Poe, now 62, will probably be retired before the harm to GWCCA becomes known in 2018. $15 million Dome annual net income contributions might be too great a loss to overcome, necessitating a state bailout.

On first down –

Tipped Ball  #1 – Public costs are not capped at the $200 million advertised according to City’s and GWCCA’s own documents that are posted online.

The Falcons negotiators, gold dome allies, and GWCCA facilitators have stayed remarkably on message that public funds are only $200 million, while the Falcons will be paying $800 million of construction costs. When the deal with Atlanta Mayor Kasim Reed was announced on Thursday, March 7, the press release said “The public contribution for stadium construction is capped at $200 million.” Maybe the Mayor thinks the council won’t mind that the legal summary says

 “Budget/Contributions: Estimated $948 million, comprised of….. Public Contribution: $200 million net proceeds of the HMT Revenue Bonds”

The legalese says the $200 million is an estimate, not a cap and puts stadium borrowings on the same funding stream that a Citi consultant projected would produce bond proceeds of $360 million. Even more critical is that those funding assumptions are terribly conservative, given the extraordinarily lower interest rates are available to Atlanta than the 4.15% rates used  and that Hotel-Motel tax revenues are currently up 7.49% over last year.

Second Down –

Tipped Ball  #2 –  No one is explaining a $612 million cash gap in Hotel Motel tax funds ($211 on a debt funding basis) over the “$200 million cap” and fully funded O-M accounts (which are being ignored as a public contribution)

A key Citi presentation of June 2011, secured by agraynation.com, was integral to the planning of the stadium agreement. This agreement used the 2.7% annual growth rate in H-M tax revenues and it showed the debt service required at then-existent rates for $360 million in debt. If the debt is reduced to $200 million, where debt is to be “capped,” it leaves $612 million in cash outlays unaccounted for, or $210 million in estimated bonding potential. These public funds are being pretended out of existence.

The legal summarycontains this bombshell about the extra funds: “City would agree that all HMT revenues not required under the Funding Agreement to provide for the payment in full of the HMT Revenue Bonds (including appropriate reserves) shall be deposited with a separate GWCCA HMT Fund Custodian, where such funds shall be applied to pay for any costs relating to the construction and operation of the NSP, as provided in the HMT law.”  In other words, excess funds can go into stadium construction that are over and above the $200 million cap.

 Third Down –

Tipped Ball  #3 –  The $186 million that the Atlanta agreement puts into “other event staging” through FY 2051 is to make up for the much, much higher costs the Falcons plan on charging as stadium managers than GWCCA did, isn’t it?

This one might tip off the public and Atlanta City Council thatStadCo will be responsible for the cost (to be identified) of providing its staff and other support that historically has been provided by GWCCAThey might awaken to the fact that Falcons costs as stadium manager are required to be built into all GWCCA events, GWCCA legacy events and Atlanta hosted events – events that now account for nearly 60% of Dome attendance! There are indications that Dome legacy events might be “not on economic terms” after the Falcons take over. Having to allocate $186 million to “other event staging” to make the existing venues and events viable reveals a controversial truth about the contract – the GWCCA won’t be staffing the stadium and will have to pay the Falcon’s cost structure, which may be considerably higher. (GWCCA’s consultant having already predicted 20% (after tax) ticket price increases and 44% concession price increases) Having to inject $186 million to make your own events “economic” after the Falcons take over isn’t a surprise to Atlantans?

Fourth down, Arthur, but don’t sweat it –

Tipped Ball #4 The Falcons only agree to pay that which the public contribution cannot be “maximized” to cover, not $700 or $800 million.

The Atlanta agreement says,All NSP costs in excess of the Public Contribution to be paid by StadCo” (the Falcons). Worse it says this about handling of funds when the bonds are sold in August 2013: “Invest Atlanta shall issue the Hotel Motel Tax (“HMT”) Revenue Bonds and StadCo shall establish an account into which its contribution will be deposited. ” This doesn’t even set an amount or a requirement that any money be deposited by the Falcons, only that an account be established! Beyond this, crafty lawyers restricted Falcon responsibility to “NSP Costs” which are established by a maximum price. The trouble with this is that an increase in the “maximum price” (which can change throughout the project) is not necessarily a change order for which the Falcons are responsible.

******************

Expect the great Falcons special stadium team to pick up the tipped ball and run in for the score. The officials will push the ball carrier across the goal line. “Whatever it takes” is the Georgia and Atlanta politicians’ motto.

After the victory is scored, the Falcons can proceed into the construction phase of revenue enhancement, where the next $50 million to $100 million in public funds lay waiting.

Why not make the full agreement open for public scrutiny instead of just the legal summary? Why not make this process easier on all concerned and just ante up another $250 million that is perfectly justifiable under sound strategic planning and will make this project palatable to the public?

Another $250 million from the Falcons remains a bargain, Arthur.

 

-AG

 

Update: The Atlanta City Council has since voted to approve the Flcon’s New Stadium Project

Video: Augusta Commission Committee Discusses Heery/Dukes Contract

Tuesday, June 11, 2013
Augusta, GA
From CityStink.net Reports
Contributions were made to this article by Al M. Gray, 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.
An Augusta commission committee gave no recommendation to proceed with the multi-million dollar contract with Heery International yesterday, deadlocking at 2 to 1. Marion Williams and Wayne Guilfoyle voted not to proceed with extending the contract as-is. Grady Smith and Corey Johnson voted in favor of extending the contract “as-is”. CityStink.net was there yesterday and got exclusive video of the meeting including where Cost Recovery Specialist Al Gray challenged Heery officials. You can watch that video below.
You can also see our most current investigative piece concerning the Heery saga:

The Bounty Trace to Magnolia Trace

Originally posted on CityStink
Friday, September 21, 2012
Evans, 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.
The fury in and surrounding the Columbia County Commission Chambers on December 6, 2011 sizzled and seethed. Citizens packed the room and the overflow could have surrounded the building. An incongruous and unwelcome subsidized housing development, to be known as Magnolia Trace, was coming to their midst. The county commission had invited the intruder in. The Georgia Department of Community Affairs (DCA)was funding it. The only notice had been the real estate closing and starting of the building permit process. Revelations that the project’s limited partner, Affordable Equity Partners(AEP) of Columbia, Missouri, had – through subsidiaries, related entities, and PAC’s – liberally provided campaign donations to Georgia’s governor, lieutenant governor, speaker of the house and local state legislators added to the combustible mix. Capping it off later was the discovery that the county attorney also had worn the hat of closing attorney for the developers.
Inside, the commission chairman, three commissioners, and that county attorney were stoic, but their white faces and knuckles spoke fear.  Their position was one of relative comfort juxtaposed to the District Three commissioner, a man inopportunely appointed to the offending Department of Community Affairs board (albeit after DCA had approved the tax credit funding to AEP) and who had voted for the county’s resolution to endorse the project. His business had been picketed, his phone ceaselessly chattered, a local talk radio show with 60,000 listeners was hostile, and real pressure was on. He was beet red and seemed to be near break down.
An epic meeting ensued that concluded an hour and a half later with the commission engaging an outside attorney charged with seeing whether there were avenues to void the deal.  It was a fig leaf and seen that way. The project was too carefully planned and orchestrated for citizens to have a realistic chance of canceling it. After all, Affordable Equity Partners boasts of its long history of doing tax credit projects in multiple states and its role in encouraging states to provide the tax credits.  From the company website: “By forging strong relationships with key government entities, AEP ensures a secure and favorable investment environment for our investor partners.”
Who Done It?
The first stage in the development and investment process for a Low Income Housing Tax Credit project is said by AEP to be this: “A developer of an affordable property will admit AEP as its limited partner..” This portrays the circumstance of a group of local property developers gaining control of land, then engaging the AEP companies to structure the deal as a LIHTC financing. Who are the principals behind Magnolia Trace? They are hidden by the LLP structure, so that remains a mystery.
The birth pangs for this project came when an AEP entity named Peach Way Holdings LLC obtained an option on March 24, 2010 to purchase the land. Later the option would be exercised by Magnolia Trace LLP. Immediately the process began to submit an application to DCA for tax credits used to finance the project. Peach Way Holdings was the first entity publicly involved out of an AEP interconnected stable of companies who are very adept at carving out a lucrative niche.
Extraordinarily High Costs Meet a Stunning Reversal
The Magnolia Trace project was so astonishingly lucrative that the DCA staff initially refused to approve the application on December 14, 2010 (click link to view document) based on that fact and a host of other financial criteria. “Total development costs for this project are over $10 million dollars which translates into almost $141.24 (author used round numbers) per square foot. A similar project had total development costs of only $7,561,982. This translates to almost $2.5 million more of total development costs.”, DCA wrote. Despite having slammed the numbers as entirely too high and the applicant being barred from updating or modifying anything upon appeal, DCA  approved the credits for MagnoliaTrace in a letter dated March 14, 2011 (click link to view approval document) .Incredibly the approval notification letter has a DCA documents date stamp of January 7, 2011, 66 days before the document was dated!
A need to call upon AEP’s “strong relationships” within government to gain approval before December 31, 2010 lay in the expiration of a key contract with Peach Way Financial Services. The vaunted “genuine advocacy for both developers and investors” worked wonders to speed approval, evidenced by what looks like an obvious post dating episode, over a period interrupted by Christmas and New Years.
Who might Magnolia Trace LLP/Affordable Equity Partners have called upon for help in this time of emergency? Lt. Governor Casey Cagle’s campaign got $882.50 from AEP going back to 2008. Sister company Capital Health Management Inc. gave Cagle another $10, 453.50.Capital Health Management in October 2006 had given $40,000 out of the $40,500 total of The Fund for Georgia’s Future (Filer # NC2006000414 ) who gave Cagle another $10,000 that same month. Capital Health Management in 2008 gave a whopping $100,000 to The Fund for Georgia’s Future, who dispersed it to a raft of legislators. and the Republican Party.
Capital Health had also given the campaigns of Speaker David Ralston $5,000, Senate Majority Leader Chip Rogers $5,500 and Nathan Deal $6,300. Another PAC that AEP contributes to, albeit not as the dominant contributor, is the Committee for Affordable Workforce Housing (GAHC-PAC – Filer NC2008000070). This PAC gave another $6,100 to the Deal campaign in September 2010, $1000 to Ralston in December 2010, $5,973 for Deal in December 2011,  and $3,000 for Cagle in March, 2012.
Nearly $200,000 in campaign funds wins friends. In this case did it reverse a project rejection and move a date?
Magnolia Trace under construction
 A Masked Partner?
The DCA application process requires disclosure of all related and controlled entities. Peach Way Financial Services, LLC , the Development Consultant, seems to fall within this category, as William A. Markel, Executive Vice President of AEP, is listed as Peach Way’s Agent for its business registration with the Georgia Secretary of State with the listed mailing address in Missouri coinciding with AEP’s office address. However, in the tax credit application filed with DCA, Peach Way Financial, the project Developer Consultant, was listed with an Atlanta address and was reported to  “not have an identity of interest with any other entity in this chart.”  *(Click here to view Magnolia Trace parties document). It is noted that the “identity of interest” question applied to each and every entity in the chart.
A side note is that Peach Way Financial Services, LLC  is shown to have filed its business registration with the Secretary of State for 2011, when the application process remained in play, but is reported to be in a state of noncompliance for 2012. According to its contract, Peach Way Financial Services gets fee payments in 2012 from Magnolia Trace.
“Inefficient financial structure”
Before Magnolia Trace LLP’s sudden change in fortune, DCA had written this about the project: “….the financial structure is not an effective or efficient use of DCA resources.” What might be the reason that the “financial structure is not an effective use…?” Could it be that multiple layers of AEP affiliated companies produced the $2.5 million more in costs cited by DCA?
Arguably the largest money tree in the AEP stable is that the tax credit financing process allows “AEP’s ability to insert an experienced affiliate into every step of the tax credit process provides added security to AEP’s investors.” With Magnolia Trace, Peach Way Holdings secured the land option. Magnolia Trace LLP became the owner.  MACO Development Company, LLC is the Developer. AEP itself is the State and Federal Limited Partner. MACO Properties, LLC is the Managing Partner. Peach Way Financial Services LLC is the Development consultant. Fairway Construction Co. Inc. is the General Contractor. Fairway Management is the management company. All are related and most stood to gain fees, directly or indirectly.
How much  of the $2.5 million excess cost that DCA objected to might be found in having so many AEP companies involved? The land acquisition and construction ‘costs’ totaled $6,986,826, or a whopping $100 per square foot. The total development  ‘costs’ of $10,152,634 were $145.45 per square foot. Of the roughly $3.2 million difference, fees, overhead, and profit of the AEP stable of companies were about $2.1 million, or 66%.
A Lot More than A Trace of Money
Once a subdivision is complete, the AEP companies begin to draw management fees from leasing operations. Magnolia Trace will join 17 previous AEP company developments in Georgia. Projected management fees to be generated from the Martinez complex are estimated at $1,160,885.
The approved tax credits were $1,065,849. If the DCA’s figures and objections ifrom December 2010 are correct, the excess of tax credits over the norms would be about 25% or more than $250,000.
Magical Words to an Auditor’s Ears
The application contained the language “Certification of Actual Cost” and the authorizing provisions in Chapter 42 of the tax code preserve the rights and capabilities of audit before the tax credits are issued. This could prove providential in protecting state and federal tax revenues, as there are new homes for sale in similar neighborhoods for sales prices in the low $70’s per square foot. Upon audit can the $145 per square foot price supplied by the AEP companies be sustained?
The larger question is whether anyone will ever be allowed to audit this transaction.
Summary

 

Citizens of suburban, Republican Martinez, Georgia got an unwelcome subsidized housing project courtesy of unknown developers. If there is solace in this story it is that Martinez county commissioner Trey Allen got the Department of Community Affairs to reform its policy so that future locales will be notified beforehand of low income projects. The politicians got nearly $200,000 of campaign donations. The AEP stable of companies look to have secured a backdated approval of a project that DCA deemed excessive on the way to winning more than $1.5 million in development fees, $1.1 million in tax credits, and $1.1 million in management fees. Along the way, one entity looks to have been undisclosed as a related party and has fallen into noncompliance with Georgia’s business registration unit.
The identities of the parties who launched this controversial project will be hidden behind opaque partnership structures, while a cash-strapped state government sees its revenues drained, not only by very lucrative tax give-aways, but also by layered on costs that the state agency found to be excessive.
Can this really be government by and for the people?***
Al Gray

Peas Lost to T-SPLOST (video)

Originally posted on CityStink
Monday, July 30, 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.
In his latest anti T-SPLOST video, Al Gray, explains how our buying power will be pea’d away if T-SPLOST passes. Watch his video below.

Special Report: No R.W. Allen GuaranTEE?

Originally posted on CityStink
July 25, 2012
Augusta, GA
By Bradley E. Owens
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.
Augusta Today member Dean Klopotic submitted a Georgia Open Records Request seeking the R.W. Allen LLC (RWA) billings for the Tee Center related contracts they are performing. The Law Department of the city of Augusta issued a response which included RWA invoice number 24 representing costs through March 31, 2012. Our investigating team has since obtained RWA invoice number 26 from other sources in city government and turned the documents over to cost recovery accounting specialist Al Gray for analysis and review.
RWA boasts of having an “Open Books Policy” but their Tee Center project manager Jim Cely declined to allow us to visit their offices to view supporting documents to the billings obtained through the Georgia Open Records Request.  RWA CEO Rick W. Allen, currently a candidatefor Georgia’s 12th Congressional District, had previously pledged to allow Mr. Gray access to the billing detail records. Despite being assured they would cooperate we were not allowed to see the documents and instead, Cely gave instructions to direct inquiries to Augusta Administrator Fred Russell….the same Fred Russell who has displayed a pattern of withholding VITAL information from Augusta Commissioners on the TEE Center and its companion parking deck across the street.
The Tee Center Contract with R.W. Allen LLC is a Construction Manager at Risk guaranteed maximum price (GMP) contract. Under a fast track, a cost plus contract with a GMP, the Construction Manager sets its fee, general conditions (overhead) expenses, and other costs necessary to construct a total facility.  These contracts are or can be comprised of multiple subcontracts and work with the CM (RWA in this case) self-performing portions as if they had been subcontracted. In other words, they can hire themselves to do certain parts of the job as the Construction Manager.
Once the drawings and design work is 75% complete the GMP was officially set at a price of $29,700,000 and accepted by the Augusta Commission. There have been two change orders (“change orders” are contract modifications which usually are increases in the cost of the fixed price cap due to unforeseen “changes” that affect the construction itself) executed which bring the total price to $30,113,215.  So as you can see, the agreed upon price of the TEE Center construction was $29,700,000.00 but due to the two “change orders” the final projected price tag (there could be more change orders before it is completed so I say “projected”) is now a cool $30,113,215.
Since the more detailed supporting documents for RWA’s invoices (which are pretty vague) are not likely to be in the possession of the Augusta government and therefore open records accessible and the honcho over at RWA, 12th District candidate R.W. Allen, has already broken his pledge to allow us access to the documents (a politician breaking a pledge to the tax payer? SAY IT ISN’T SO!); here are the questions we would pose to Mr. Russell and to Program Manager Heery International to find out the details of these invoices for us, the lowly tax payer footing the entire bill of $30mil and change.
Has there been Double Billing of General Conditions Costs?
Let’s be clear here, these are complicated contracts but the billing is not if you are willing to bear with me and see the questions we are asking.
Article 7.4.1 sets out the components of the contract price and these are repeated in Exhibit A in the contract. to be paid by Augusta, so a cost has to fall into one of those two categories and be authorized by the terms of the contract to be billed. To cover the contractor’s overhead costs, called “General Conditions” in construction language, RWA put in a General Conditions Guaranteed Maximum cost of $1,082,670 in the contract and in Exhibit G.
The capped GC cost is described this way on page 56: Items that are included within the General Conditions Costs for which the Construction Manager is entitled to no additional compensation include without limitation:…..viii “That portion of insurance GL and Auto Builders Risk and P&P bond premiums that can be directly attributed to this Contract for Construction”…..ix. Fees and assessments for the building permit and for other permits licensesand inspections for which the Construction Manager is required by theContract for Construction to pay.
Looking at the latest payment application available, on line 2 of the Form G703 appearing on page 2,
we find an amount listed for General Conditions costs of $1,082,475, which is only $195 less than the stated limit in the contract. Augusta is making progress payments, which total $697,917 (less 5% retained by Augusta) through this invoice, based upon component invoicing and RWA labor charges. In addition to the GC costs, we found $167,585 charged on page 2, line 19 of the G703 schedule for P&P Bonds.
Based upon the contract having capped GC costs to INCLUDE the P&P bonds, separate invoicing in this manner appears to be a duplicate charge, especially since the contract also says this: “The overhead and profit component for any change includes the cost of bonds and insurance”which seems to preclude the additional billing of P&P bonds separately in this manner. The P&P bonds for the subcontractors are in their OWN costs.
Besides the P&P bond issue, there is the same issue with the $48,961 of permit costs on line 18 of the payment request.
These two issues relating to costs billed separately that appear to be already covered by capped General Conditions total $216,546. It is recommended that these costs be reallocated against the capped GC costs of $1,082,670, or line 2 on the G703 billing schedule of values.
Extension of General Conditions without Required Change Order?
Accompanying payment request number 24 was a document entitled “Augusta TEE Center Contingency Log” which includes a $16,393 item labeled “extended builders risk cost due to delays. There was an invoice supplied showing the builder’s risk policy was being extended to October 2012.  ”The contract says this – All adjustments in compensation or extensions of time shall be by change order (page 38)”
No change order was found to extend the duration of the project, so shouldn’t this charge be covered by the capped General Conditions that includes builder’s risk insurance?
A much more important and broader issue, is whether RWA intends to collect extended general conditions for the approximately 6 months greater time until completion of the project to include the more costly GC costs, like supervision. The project duration in the contract was set at 24 months, yet the project is on the 26th monthly billing.
Does the charging of builder’s risk premiums for project delays mean that there will be a costly claim for extended General Conditions at the end of the project? Will extension costs be continued to be charged against the contract contingency, instead of being authorized by change order, as the contract apparently requires?
Lack of Pricing Details limits Change Order Price Analysis?
Augusta Today and City Stink contributor Lori Davis submitted a Georgia Open Records Request on another matter concerning the TEE center kitchen equipment that was added to the RWA contract as Change Order 1 to increase the Contract Price to a total of $29,276,987. Included in the information provided  was the pricing from the subcontractor, itemized by equipment price, but unsupported by cost versus overhead and profit analysis of the pricing.
The contract says this in Article 15:“If and to the extent the change involves work of one or more subcontractors the overhead andprofit component for subcontractors shall be fifteen percent 15 and theoverhead and profit component for the Construction Manager shall be seven percent 7 of the amount allocable for subcontracted work.”
Unless there is additional analysis not presented with the City’s response to the GORA request, how can RWA tell whether the 15% limitation on overhead and profit has been met with respect to Change Order 1? Is sufficient cost information being obtained on other project changes to meet the contract limitations on combined overhead and profit?
Construction Equipment Rentals in Steel Costs?
Within the supporting backup for Payment Application 24 for the steel cost category was an invoice to RWA for construction equipment rental.  The contract has this inclusion within the definition of General Conditions costs: “xviii Rental charges for temporary facilities and for machinery equipment and tools not customarily owned by construction workers”
Since the equipment rentals seem to be within General Conditions (Overhead), wouldn’t such costs be covered by the allowed 15% overhead and profit markup allowed on work self-performed by the Contractor?
Summary
  1. Aren’t $216,546 of bond and permit costs separately billed also within the capped General Conditions expense in this contract?
  2. Did the billing of $16,393 for extending insurance coverage to October 2012 presage a claim for an additional number of months of general conditions expense, including Contractor Supervisory labor, and unforeseen costs.? Without a change order, should this item have been charged to contingency?
  3. Is there sufficient cost detail provided by subcontractors to assure that contract limitations on maximum, combined overhead and profit can be verified?
  4.  Are construction equipment rentals separately billable from overhead and profit markups?
  5. Will Augusta review the contract to assure that all contingency and allowances are recaptured by the city at project completion on this major contract? Others?
We expect that the Mayor and the City Commission will assure that these questions are answered.***
B.O.


**Augusta Today members Al Gray, Lori Davis, and Dean Klopotik also contributed to this report**
 
**Below is the GMP Construction Contract between RW Allen Construction on the city of Augusta for the TEE Center:
RWA GMP Contract

Breathtaking Events Engulfed Jonah

Three Gulps


Sunday July 1, 2012
Augusta, GA
By Al Gray


Early last month, big government looked to strike again. Mayor Michael Bloomberg of New York City proposed banning big sugary drinks with the hope of saving us from obesity and diabetes at our own hands. The Big Gulp came to mind for we know that staple of decades, an oversized 7-11 beverage, pretty well. A Big Gulp is the very definition of gluttony. Saint Thomas Aquinas said this about the matter – “Gluttony denotes, not any desire of eating and drinking, but an inordinate desire … leaving the order of reason, wherein the good of moral virtue consists.”

Jonah was a glutton for punishment, the fish that swallowed him was a glutton for a big gulp, and these days we all are gluttons for pushing a failed society beyond all bounds of prudent. Jonah might have wished that a commandment from a leader like Mayor Bloomberg carried the authority to save him from himself or hide him from the Lord. It wasn’t going to work that way.


Our scripture for today is Jonah Chapter 2. Jonah rebelled against the Lord’s instruction to go to Nineveh; he had gulpedat the prospect to preaching to imaginably hostile crowds. Then the fish gulped down Jonah. In chapter 2 we read of Jonah gulping in anguish at being separated from the light of the world and the light of God. We get a sense of Jonah’s reality check at the seriousness of his position and his new-found faith that got him out of it.


From inside the fish Jonah prayed to the Lord his God. He said:

“In my distress I called to the Lord,
    and he answered me.
From deep in the realm of the dead I called for help,
    and you listened to my cry.
You hurled me into the depths,
    into the very heart of the seas,
    and the currents swirled about me;
all your waves and breakers
    swept over me.
I said, ‘I have been banished
    from your sight;
yet I will look again
    toward your holy temple.’
The engulfing waters threatened me,
    the deep surrounded me;
    seaweed was wrapped around my head.
To the roots of the mountains I sank down;
    the earth beneath barred me in forever.
But you, Lord my God,
    brought my life up from the pit.

“When my life was ebbing away,
    I remembered you, Lord,
and my prayer rose to you,
    to your holy temple.

“Those who cling to worthless idols
    turn away from God’s love for them.
But I, with shouts of grateful praise,
    will sacrifice to you.
What I have vowed I will make good.
    I will say, ‘Salvation comes from the Lord.’”

10 And the Lord commanded the fish, and it vomited Jonah onto dry land.


There are trinities all through the Bible.  The Book of Jonah is the story of the Three Gulps. The first gulp was one caused by Jonah’s imagination of the indifference, ridicule, and hostility he might receive at the hands of a foreign people, amongst crowds of strangers. Most folks we know are like that. They will do anything to avoid speaking in public, about anything, much less preaching about the one Lord in a pagan land.



The second gulp was that of the fish swallowing Jonah. While we can be sure the Lord summoned the great fish for the purpose of bringing obedience to Jonah, we can also imagine that a fish large enough to swallow a man would have a Big Gulp out of natural proximity to prey not too big to swallow.


It was the third gulp of realization in this story that is the most important. Gulping can be out of apprehension of the imagined, such as the prospect of preaching to a novice; it can be a physical act of taking an inordinate swallow, as the fish exhibited; and it can arise at a sudden very real assault on the senses, as the near-drowning, then engulfment of Jonah. There was a sudden need for breath, a desperation causing panicked swallowing of nothing but stale air. Then came realization, not just of his predicament of being in the belly of a fish, but the recognition of how wrong, sinful, and dismissive of God he had been, not just in avoiding Nineveh, but all through his life.


Lastly, the third gulp brought redemption. Jonah made peace with the Lord and promised to follow his commands, after his emotions had ranged from despair to calm assurance in the Lord’s presence and forgiveness.


Are we in this day and age so jaded, so conceited, and so consumed with gluttony from constant immersion in this corrupt society that it will take a massive shock to our senses to bring us to the conclusions to which Jonah was brought? Let us pray to the Lord that we might be mindful of the story of Jonah.


Three gulps there were. One arose from imagination. One arose from the aggressive gluttony of another, albeit that of a fish. One arose from physical assault on a fragile human body.

Mayor Bloomberg cannot save New Yorkers from a Big Gulp, nor can President Obama and Congress spare the American people. There will be no deliverance. Yet there will be redemption for those who believe in our Lord Jesus Christ. 


No one had greater trials than Jonah, Job and Moses. Let us pray that, should the time come, the Lord will give us their 

perseverance and focus on Him.***
A.G.




Special Report: A TEE Total Mess!

Making a Hash over $1.3 Million Kitchen Equipment

Originally posted on CityStink
Thursday, June 21, 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.
In the waning weeks of Winter 2012, Augusta Today contributor Lori Davis submitted an exploratory, wide ranging Georgia Open Records Act Request
for the City of Augusta’s payments under major contracts. The documents response was massive. Deep in the supporting subcontractor billings to the R.W. Allen, LLC contract for the Tee Center was a most intriguing invoice from Norvell Fixture and Equipment Company showing that $199,656.00 of kitchen equipment as work completed and an additional $76,289.25 worth was stored, for a total billed and paid of $275,845.32! (less 10% retainage). The contract total for kitchen equipment is a surprising $1,329,418.00.
Why was this invoice noteworthy? There was no detailed partnership agreement executed between the City and its Tee Center Partner and Manager, Augusta Riverfront LLC going into the contracts for construction, leaving the last word on the partnership being the unsigned, undated August 2007 Term Sheet. Repeated references to kitchen equipment are pretty clear that such equipment are the responsibility of the LLC, including this: “Augusta’s Capital Funds shall specifically not be used for items related to Kitchen Equipment, Laundry Equipment, and any Convention Center or Hotel capital cost.” Similar language making the LLC responsible for Kitchen Equipment remain within the executed 1999 Core Agreement of record in the Offices of the Clerk of Augusta Richmond County Superior Court.
No Augusta Funds are to be used to procure kitchen equipment, when $1.3 million of it is under contract?
During negotiations that have not yet produced a signed partnership agreement there was certainly a commitment for Augusta to construct new kitchen space within the Tee Center and relocate the combined kitchen from the existing Convention Center. That had no impact upon equipment ownership. Real property improvements and tangible personal property, such as equipment, are different.
In order to advance the investigation, Augusta Today member Dean Klopotic submitted a follow-up GORA request seeking the most recent R.W. Allen LLC billings under the Tee Center Contract. The City responded with Progress Billing Number 24, covering costs through March 24, 2012, including Kitchen Equipment Invoice Number 6, through March 20, 2012.
The details show $792,984.52 equipment work completed, materials stored of $162,544.34 and a total billed of $955,528.86, less 10% retainage. The R.W. Allen monthly invoice shows no additional kitchen equipment stored. Both Construction Manager and Subcontractor show most of the kitchen equipment as work completed.
At 11:00 AM on Thursday, June 7, Barry White of the Convention and Visitors Bureau conducted a TEE Center tour, which was attended by Ms. Davis and this writer. Project Manager Jacques Ware of Program Management firm Heery International would not permit the use of a video camera, suggesting that we come back for the Media Tour to be held Thursday June 14.
When the entourage reached the second floor of the TEE Center, the empty space was pointed out where the kitchen is to be located. At that juncture, an inquiry was made about the kitchen equipment invoiced back in December. Mr. Ware said that he didn’t authorize payment for a kitchen equipment invoice, asking what kind of equipment was on it. This writer responded “ a number of tilting kettles and ranges,” then pondering out loud if they might be stored. Mr. Ware said the only kitchen equipment there would have to have been “for the Marriott.” (The Marriott is owned and operated by Augusta Riverfront LLC.)
An email request to Mr. Barry White to be included in the Media Tour on the 14threceived no response. Other attempts were made to get a separate tour along with one or a group of commissioners to investigate the matter. Commissioner Joe Jackson had just returned from vacation and could not schedule a tour in the next week. Commissioner Bill Lockett managed to get the Heery project liason to get permission to join another June 14 tour, only to see it canceled after several hours.
Commissioner Wayne Guilfoyle was provided with a copy of Kitchen Equipment Invoice on the morning of June 20, whereupon he sought explanation of where the kitchen equipment is from Program Manager Heery International, receiving assurance that the materials were “either stored or installed.”
It is fairly common practice to bill stored materials. There is clear language on billing documents that they are “Materials Stored on Job Site (Invoices if Required).”
Where does the situation stand? What are the issues?
Issues and Questions
  • Where is the Equipment that Augusta paid for?
  • Has Augusta Riverfront LLC been relieved of its responsibility for the purchase of kitchen equipment? If so, where? If not, is Augusta being reimbursed for the $1.3 million cost?
  • If the Kitchen Equipment was delivered and used in Conference Center operations and events ($955,528.86 having been delivered, installed or stored prior to the Masters upswing in events) where is the accounting for the revenues?
  • Without an Effective Date having been established for the successor catering agreement, where does accountability lie, especially since Augusta Riverfront LLC’s Paul Simon having declared the Tee and Conference Center merged months ago?
  • Why do both the R.W. Allen and Norvell Fixture and Equipment Company invoicing show the equipment as “Work Completed” if the equipment is “Stored?”
  • Should Augusta have paid for nearly a $million of equipment months before it is installed in the new kitchen?
  • Why does the invoicing include future charges for repairing Augusta Riverfront LLC equipment? Whose equipment will it be after Augusta repairs it?
———–
Commissioners Joe Bowles, Joe Jackson, Wayne Guilfoyle, and Bill Lockett have provided Augusta Today and CityStink.net with substantial cooperation in this investigation and report. The public can feel confident that these gentlemen will pursue this matter to a conclusion.
Several of them need to participate in a tour and inspection of the paid-for kitchen equipment. Perhaps the city’s internal auditor can vouch for the accountability of the equipment, including verification of delivery documents to a storage facility before the dates that the invoicing was submitted.
It is hoped that all will aggressively protect the interests of the citizens of Augusta and seek wise counsel as they deal with the aftermath of the total mess that the TEE Center currently represents.*** Stay tuned, more to come.
A.G.

Overlay Somebody Else: My Battle With Columbia County Over Property Rights

Friday, May 25, 2012
Evans, GA
By Al Gray

New Year’s Day in the year 2000 did not find this writer worried about the world’s computer systems crashing because of the Y2K or much of anything else. Two new clients and two projects in Missouri – a state-of-the-art hot dog plant and a deli meat production facility beckoned. It was a very lucrative contract that took me away from the Augusta area, as nearly all of them have. A most successful bowhunting season had just been concluded. The parents were still able to take care of themselves. 1999 had been good, but 2000 would be even better. It did not start that way, January 1 pleasantries not withstanding.

Sometime in February, after trudging through 15 inches of snow in St. Joe, MO,  I returned to my motel room just in time to catch a call from my parents. It seems that they had gotten an official notice about an ‘overlay’ zoning ordinance to cover something called the Evans Town Center Overlay District (ETCOD). It concerned them that the county was looking to pass some sort of control over their commercially zoned property on Washington Road. We were not totally surprised, having attended one of the planning meetings for the town center at Savannah Rapids Pavilion.

Actually seeing the map of ETCOD was an eye-opener. It was a gerrymandered map that looked like a headless woman in a dress stumbling like a zombie. Then there was the matter of the text of the proposed ordinance. It banned any store over 30,000 square feet, imposed expensive architectural upgrades, and made plans to completely rework the zoning map via overlay zoning to impose government land use planning instead of free market economics. It was aimed straight at our family, who had decades long plans for a major shopping center to the west of Ronald Reagan Drive. Worse, it would have ruined decades of planning along with previous county officials which included gifted water and sewer easements and providing for a road into a subdivision.

The night of the first Planning Commission meeting, the elite of the Augusta and Columbia County development sector was in attendance. Your scribe had never made a public speech before. Knees shaking from fear and voice quavering, my speech might have gotten off to a disastrous start, but the first order of business was to loosen things up by poking fun at the gerrymandered map. The room exploded with laughter. A key point was made that the map was discriminatory, lacking uniformity of application. The county attorney would later agree, forcing new notices to be sent to everyone in a 3500 acre circle. Up behind the lectern, a transformation took place. The meek accountants knees were still knocking, but the cause had turned from fear to RAGE!

Things have not been the same since.

When the county was forced to make ETCOD a uniform circle, the action resulted in our family gaining scores of new allies against ETCOD. Even one of the chief proponents realized our position because her family’s land was now in the overlay zone! She exclaimed in a meeting. “We don’t want those rules on OUR PROPERTY!” Neither did a lot of folks. When the planning commission decided to ram through ETCOD, two of the commissioners stayed home in fear. The 3 left decided to ram the vote for the ordinance through. The entire room, it seemed, leaped to their feet and shouted “NO!!!!!!” It was the closest thing to a riot that Columbia County has seen in a public meeting in modern times. The county commission appointed a citizen’s committee headed by contractor Ron Cross to work out a compromise. The Evans Town Center Ordinance was birthed eventually, but the baby was a lot trimmer and caused less labor pain.

There were other battles to come. They are best left to another day.

The salvation of our family came in the form of gifts from our founding fathers. The 5th and 14th amendments to the United States Constitution provide each of us, as citizens with guarantees of Equal Protection Under the Law and that we cannot be deprived of property without Due Process of Law. More recently Columbia County implemented Corridor Overlays, Lincoln County did the same, and last year Augusta attempted to enact a flawed Laney Walker Bethlehem Overlay District. In each instance it was a privilege to help fellow citizens being assailed with threats to their rights from overlay zoning.

Pertinent to today’s events, in which the diabolical Agenda 21 plan is infiltrating all levels of government, the Evans Town Center Plan developed by consultants Rosser- Lowe, was even then replete with references to “smart growth” and “Sustainable Development”. You have to remember that Columbia County is a solid Republican County, not a place one would suspect that a socialist agenda could take root in. We have to be constantly vigilant everywhere.

The Evans Town Center Plan was supposedly based upon town centers in Redmond, Washington; Reston, Virginia; and Smyrna, Georgia. A key component of largely defeating ETCOD was this analysis comparing those places with the Evans Town Center. (Article continues below the chart)

ETCOD BATTLE CHART

When one can dissect the planner’s plans and turn the evidence against them, he can win huge victories against the odds, for the truth overwhelms the planners and allies arrive in droves.

A County Commissioner and two Planning Commissioners said that the ETCOD was a “Done Deal”

Well, it came UNDONE.

Thanks founders, for the Constitution. Agenda 21? That’s just another undone deal of our making.***

AG

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Nehemiah Gazes on Augusta

Listening to Old Nehemiah
Scripture for the Mayor’s Next Prayer Breakfast
by Al Gray
Local and state leaders are stuck on “moving forward” to the point of absurdity. There is a whole book in the bible that supports that positive , literally constructive, approach. The book of Nehemiah is a tribute to building and teamwork. The fifth chapter abruptly tells a different tale. There readers see Israel in the throes of a depression, even as the great temple was being built. Nehemiah, perhaps as wise as was Solomon, saw dislocations happening and sprang into action before things spun out of control.
History repeats, it is said. Nehemiah would recognize our time well. There was a great famine. People could not repay their loans. Between taxes and debts they lost their lands and were forced to sell their children into slavery. By some accounts there was a dearth, more people than the land or economy could support.
There are many versions of the Bible to study that take on these problems in different contexts. I like the words of Nehemiah found in  the Bible Gateway’s Easy to Read Version.
When I heard their complaints, I was very angry. 7 I calmed myself down, and then I went to the rich families and the officials…… Then I called for all the people to meet together 8 and said to them, “Our fellow Jews were sold as slaves to people in other countries. We did our best to buy them back and make them free. And now, you are selling them like slaves again!”
   The rich people and officials kept quiet. They could not find anything to say. 9 So I continued speaking. I said, “What you people are doing is not right! You know that you should fear and respect our God. You should not do the shameful things other people do! 10 My men, my brothers, and I are also lending money and grain to the people. But let’s stop forcing them to pay interest on these loans. 11 You must give their fields, vineyards, olive fields, and houses back to them, right now! ……”
 12 Then the rich people and the officials said, “We will give it back and not demand anything more from them. Nehemiah, we will do as you say.”
   Then I called the priests. I made the rich people and the officials promise to God that they would do what they said. 13 Then I shook out the folds of my clothes. I said, “God will do the same thing to everyone who does not keep their promise. God will shake them out of their houses and they will lose everything they worked for. They will lose everything!”
   I finished saying these things and all the people agreed. They all said, “Amen” and praised the LORD. So the people did as they had promised.
The people were also greatly oppressed by the servants and officers of the governor; but, during the twelve years that Nehemiah had been with them, he took not this salary, and ate none of their bread. Nor were his servants permitted to take or exact any thing from them. Having such an example, it was scandalous for their chiefs, priests, and nobles, thus to oppress an afflicted and distressed people.
The Lesson For AUGUSTA Today
We have a problem like that of Nehemiah and his people. The demographics of the baby boom population were always bound to produce a dearth. This writer acknowledged it and planned for it. The dearth was scheduled to strike after 2020, but it is of the here and now. The greatest wave of financial corruption the world has ever seen – ever-morphing, expanding with the speed of instantaneous communication and power of globalism – has sped up this dreadful time by a full decade.
In desperation, the formerly wealthy who were largely wiped out in 2008 have seized upon their political domination to restore their fortunes. If they go unchecked, there will be no American middle class in a scant 5 years. Are these things happening in Augusta, as elsewhere? Yes, they are.
When the share price of  the demised Wachovia Bank fell from $57 to $2 and Regions Bank suffered a similar tumble in 2007 and 2008, some in the know say it took a $Billion out of the wealth of Augusta. This writer estimates the losses at more than $600 million. Commercial and residential real estate, particularly resort homes, crashed in value. These were sledgehammer blows to the wealth class and would have permanently shifted wealth to those who planned, saved, trained, and invested for these times. Those who lost want none of that. Their excesses of power and influence have been stunning, taking us to the brink of extinguishing the rule of law and flaunting the laws of mathematics.
The first levers of power to be engaged were over government contracts, stimulus funds, capital projects, and tax incentives. $50 million in improvements on lands Augusta doesn’t own, $millions in federal stimulus money dumped on Laney Walker to the benefit of the whitest of Columbia County developers who had lost in the crash, an unannounced ‘opportunity zone’ foisted upon Harrisburg, and a public housing project in Martinez greased by massive lobbyist funds to the highest of Georgia officials are overwhelming evidence. These are just the incidences that have been disclosed. More are coming.
Into the maw of this chasm of government money and power, a group of local citizens has sprung forth to meet it head on. This writer is proud to be amongst them. The danger to our fortunes, occupations, freedom, and even our lives is palpable. There have been threats. We acknowledge them and move forward with firm resolve. In the scant months since the Augusta Today facebook group, City Stink  and ArrowFlinger Reports have been created the results have been stunning and the support from the community has been overwhelming, yet humbling. We thank you all for that. I believe that through similar efforts we can claw Augusta and America back from the brink of an apocalypse.
The approach is simple. We formed a nucleus of dedicated researchers, professionals, and public policy freaks to identify, plan, document, execute, and publicize projects, supported by a guarded social network that now exceeds 200.  We pull from professional resources from across America. We try to excel in presenting documents for the public to examine on line that buttress our case. If there is opposition, they find themselves not in argument with our findings but in direct confrontation with their own deeds, words and documents! This was our plan from the outset. Its effectiveness is an epic success. If one thinks upon it, the approach of turning government and power back upon itself can be seen as a form of martial-arts in which size and force of the opponent is his own worst enemy. We give the broadcast media a knowledge base and stories that cannot be fully explored in the two minutes or less that they have on the air. In these times of swift, yet unrecognized, shifts in local fortunes and power, we may prove instrumental in restoring the free market to the process, as traditional media remains welded to the past, unwilling to risk offending those who have failed. The past belongs to those who failed. We embrace the future with relish.
What can you do to help? First, you can form your own nuclei of project teams within the overall framework of Augusta Today, coordinating with our group or independently if you wish, much as the Magnolia Trace group has done. You will have to thoroughly vet the members and restrict the number to ten or less. You will have to have discipline and a high degree of coordination. (We learned this lesson the hard way, as we had no formal plan – we just ‘happened.’) Inclusion of media people is not advised, as the objective is to be a source for all dedicated to none. There is no dearth of opportunities. The current group has at least six months of projects and stories already. There is room for expansion. Second, as we get the capability to accept donations, please contribute. Radio talk show host Austin Rhodes initiated this aspect of our efforts in order to engage tough legal counsel as a force multiplier against the City of Augusta, should common sense fail with regard to the City’s Reynolds Street Deck Agreements. Our current intention is to employ that resource there and elsewhere on projects from Augusta to the gold dome in Atlanta.
We acknowledge the tremendous role of the broadcast media in spreading our stories, particularly Renee DeMedicis of WNRR, Austin Rhodes of WGAC of WNRR, Tony Powers, George Eskola of WJBF, and Chris Thomas of WRDW. They have added a forceful dimension that we could never achieve. We will similarly embrace whatever journalistic print media survives this maelstrom too.
We have no Nehemiah, we have ourselves and our resolve to avoid the abyss of lawlessness, incontrovertible stupidity, arrogance, and abuse of power that lies ahead. Augusta’s mayor is stuck on “moving forward.”  We have seen the path he is on and we have bolted from it. How about you?
Nehemiah’s Message to Augusta Power Brokers and Manipulators
There have been times like these before in Augusta, periods of economic downturn and those finding themselves with decimated fortunes while still holding enormous political power with which they tried to regain their riches at public expense. The names Bert Hester and Gene Holley come to mind. Senator Holley was once one the most powerful men in Georgia and had amassed one of the state’s largest fortunes, before enormous losses in oil led to overly aggressive financial actions that ended with a conviction for bank fraud. When this writer recalled Holley’s conviction and imprisonment, it was wondered how Mr. Holley lived his final years. His obituary reported that they were spent in simplicity of lifestyle, regained faith, and in the love of his family and friends. That is not bad, not bad at all.
                                     
If you are one of the Augusta elite and high society, for your own sakes – follow the advice of Nehemiah. A storm comes and it is one in which we all need each other. Reject the rest of us and you will find yourselves in the gravest of dangers. Gene Holley’s epitaph wasn’t bad, not bad at all.
May your next prayer breakfast be blessed.
Nehemiah’s gaze is upon you.