Mother (of) Goofs – The Convention Center that Rick Built

This is the Convention Center that Rick built.
Conference Harrison Bldg

This is the parcel
http://gismap.augustaga.gov/PropertyCard/Default.aspx?pin=037-3-
That lay under the Convention Center that Rick built.

This is the Center Manager/Owner
paulssimon
That had the parcel
That lay under the Center that Rick built.

This is equipment the partnership deal said would be paid for by
Tilting Kettles
That Center Manager/Owner
That had the parcel
That lay under the Convention Center that Rick built.

This is the Administrator who worked with Rick to bill the city for


That kitchen equipment that was going to be the cost of
That Center Manager/Owner
That had the parcel
That lay under the Convention Center that Rick built.

This is the lawyer who looked in vain for the city commission-executed PARTNERSHIP CHANGE
permitting
Augusta Attorney Andrew McKenzie
That Administrator to work with Rick to bill the city for
That kitchen equipment that was going to be the cost of
That Center Manager/Owner
That had the parcel
That lay under the Convention Center that Rick built.

This is the Architect paid to prevent contracting snafus
who got excluded from reviewing the purchase for which
That lawyer found no partnership change to allow
That Administrator to work with Rick to bill the city for
That kitchen equipment that was going to be the cost of
That Center Manager/Owner
That had the parcel
That lay under the Convention Center that Rick built.

This is the land right Augusta found it had under its Convention Center after
Air Rights?
That Architect noted his exclusion from the purchase review that might have stopped
That which the lawyer found no partnership change to allow
That Administrator to work with Rick to bill the city for
That kitchen equipment that was going to be the cost of
That Center Manager/Owner
That had the parcel
That lay under the Convention Center that Rick built.

This is the Manager/owners parcel value for which Augusta was forced to trade the equipment to use its own building
on
That empty land right Augusta found it had after
That Architect noted his exclusion from the purchase review that might have stopped
That which the lawyer found no partnership change to allow
That Administrator to work with Rick to bill the city for
That kitchen equipment that was going to be the cost of
That Center Manager/Owner
That had the parcel
That lay under the Convention Center that Rick built.

These are the $8250 in 1, 2, 3, 4, 5, 6 campaign contributions from the Center Manager/Owner
paulssimon
Rick got after buying

That equipment value it became necessary to trade for
That empty land rights Augusta found it had after
That the Architect noted his exclusion from the purchase review that might have noted
That which the lawyer found no partnership change to allow
That Administrator to work with Rick to bill the city for
That kitchen equipment that was going to be the cost of
That Center Manager/Owner
That had the parcel
That lay under the Convention Center that Rick built.

This is the rival donkey in Congress grinning like a mule eating briars

That Rick got those campaign contributions from the Center Manager/Owner seeing
That equipment value it became necessary to trade for
That land right Augusta found it had after
That Architect noted his exclusion from the purchase review that might have noted
That which the lawyer found no partnership change to allow
That Administrator to work with Rick to bill the city for
That kitchen equipment that was going to be the cost of
That Center Manager/Owner
That had the parcel
That lay under the Convention Center that Rick built.

Basenji’s Don’t Roar on Reynolds Street

Morris Communications has a new online venture it has branded as ROAR.us, but its three year case of lockjaw over the scandal-wracked TEE Center and Parking Decks doesn’t show any sign of soon loosening into ear shattering howls.

Morris wasn’t so quiet in the run up to approval of the $50 million boondoggle. In fact it published a piece stating that the land its affiliate owned was to be deeded over to the city. It published guest columns from Convention and Bureau chairman Barry White, saying that the Morris affiliate would donate $1 million of land and cover costs over the $350,000 funded by the hotel/motel tax, and another from the CVB’s Abram Serotta promising that the funding would be covered by hotel/motel tax.

The noisy cheerleading promising no cost to the taxpayer over the $350,000 motel tax support is one bookend. The other bookend came in late 2012, when the Augusta Commission admitted that the operating costs could drain nearly $900,000 from the property tax supported general fund. The losses narrowed to $535,000 after the books for 2013 were closed, but did not receive rigorous questioning from a plaint Augusta Commission.

Between the bookends came a bribery trial arising from the Convention Center parking deck agreement, revelations that the land promised for donation for the parking deck by the Morris affiliate had $7 million in liens on it, the shocker that Augusta had bought $2 million of kitchen equipment that was the Morris affiliate’s responsibility, the stalemate of the management agreement that provided no accounting control over comingled food and beverages, comingled electrical costs that were supposed to be separately metered, and other snafus got virtually no attention from the Augusta Chronicle (Dare we now call it the Augusta Scamical?) other than meek postscripts noting that there are “ties” between the Morris affiliate Augusta Riverfront LLC and the Chronicle.

The Basenji breed of dog is bark-less because its voice box is muted. The Morris’ Augusta Chronicle and sister publications have been reported to be muted by senior management by the best of all sources – their ex-employees.

The attention given to Augusta’s General Fund during the month of August revived attention to Morris caper and the surprise reversal of assurances that no general funds would be touched by the Convention Center Operations. The public was roaring its anger in the Commission Chamber on August 28, but the sound from Morris Communications sounded more like a basenji’s muffled, whiney grunt from a corner of that empty taxpayer-money-hemorrhaging parking deck on Reynolds Street.

Catering May Crater Augusta Finances

TEE Catering Delivers Sweets To Whom?
Originally posted on CityStink
Thursday, November 8, 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.
Part 2 of Reviewing Augusta’s Tee Center Contracts
When Augusta’s Trade, Exhibition, and Event (TEE) Center was officially presented as a concept for approval in August 2007, what stood as the partnership agreement was an unsigned, undated document entitled  “Term Sheet.” between the city and Marriott Hotel Franchisee Augusta Riverfront LLC. Under that agreement, Augusta was not in the catering business and was not slated to furnish $1.4 million in kitchen equipment, or if it was, that detail was not spelled out for the Augusta City Commission.
Much has been written on this blog about the saga of the Tee Center Kitchen Equipment and that tale is not one to be retold now.
What is now germane is  that the Augusta Commission has been presented with a raft of contract and legal documents to be approved and executed that clearly should have been in place by late 2009, having been repeatedly promised as being “finalized” by City Administrator Fred Russell in the last half of that year. Now the Commission is being asked to whisk these complicated deals through in an expedited fashion lest Tee Center events face cancellation.
After the Management Agreement, the Tee Center Catering Agreement has the greatest impact upon TEE Center operations, as Augusta Riverfront LLC is already the Manager of Augusta’s Conference Center and Caterer for events there. Augusta is paid no share of catering from its Conference Center under previous deals.
The following represents a summary of the primary Catering Agreement issues compiled from a review of the contract documents. This list has been provided to Commissioners and has become the basis of discussion and attempts toward a speedy resolution of major issues. The approach was to review the agreements in PDF form,  write comments, apply sticky notes that Adobe Acrobat provides to annotate documents, and then to provide a summary from the compiled sticky notes.
Solutions were designed to be the product of meeting participants and were not suggested in the summary.
The author is not a licensed attorney, auditor, or public accountant. This analysis was provided from a multidisciplinary perspective in the manner that accountants, attorneys, administrators, owners, policy makers, and media might find useful in trying to decipher the pitfalls and dangers in the agreements.
 Primary Issues
  1. Since most of the language in the Catering Agreement mirrors the language of the previously-reviewed and annotated Management Agreement, this document will only be annotated with comments and questions unique to this agreement.
  2. Phantom legal documents (see “ Conference Center Management Agreement dated____, 2012”) should not be referenced.
  3. ARLLC (Augusta Riverfront LLC) is both Conference Center operator and Caterer with a captive LLC (TEE Center Manager Augusta Convention Center Management LLC) between them. Isn’t this just a fiction to eliminate a conflict of interest as alluded to in the Catering Agreement?
  4. Controls over inventories of food and beverage (to prevent co-mingling of Augusta, Hotel and Conference Center purchases) being in place before contract execution should be mandatory.
  5. If Kitchen doesn’t serve Hotels (as has been publicly stated by the Marriott General Manager), can’t that reference be taken out?
  6. Cross over events into the Conference Center will deprive the Tee Center of catering revenues, while the agreements relieve the Conference Center of costs.
As with the Management Agreement, time will tell how many of the above issues are addressed, handled, and rectified.
 -AG
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. He is a frequent contributor to CityStink.net.

Can Augusta Avoid Outsized Tee Center Costs?

Augusta’s Tee Shot Hits Rough
Originally posted on CityStink
Wednesday, November 7, 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.
Part One – The Management Agreement
When Augusta’s Trade, Exhibition and Event (TEE) center was approved in 2007, prudence might have suggested that one of the first steps in the process of building the facility might have been to execute the Management Agreement in advance.  This being Augusta, Georgia, where almost nothing is done in accordance with normal business practices, the building has gotten within weeks of being used before a management agreement was even submitted to Augusta commissioners for approval. Worse, the management agreement was one of a covey of documents to flush out for approval.
A very rapid assessment of the provisions of the contracts was needed, because the proposed Manager immediately began hawking the loss of events that might result if the Augusta Commission has the temerity to actually deliberate on the terms and conditions of the entire contract documents.
The following represents a summary of the primary Management Agreement issues compiled from a review of the contract documents. This list has been provided to Commissioners and has become the basis of discussion and attempts toward a speedy resolution of major issues. The approach was to review the agreements in PDF form,  write comments, apply sticky notes that Adobe Acrobat provides to annotate documents, and then to provide a summary from the compiled sticky notes.
Solutions were designed to be the product of meeting participants and were not suggested in the summary.
The author is not a licensed attorney, auditor, or public accountant. This analysis was provided from a multidisciplinary perspective in the manner that accountants, attorneys, administrators, owners, policy makers, and media might find useful in trying to decipher the pitfalls and dangers in the agreements.
Tee Management Agreement Major Issues at 11/2/2012
  1. Differences in 2007 and 2009 Commission Approvals and these Documents. No cost cap. Unlimited conduit to Augusta General Fund.
  2. Cost shifting between agreements. Electric utility example. Beer inventory example. $300,000 a year for 50 years = $15,000,000( Augusta’s Laney Walker Improvement cost calculation method)
  3. Kitchen built under Tee Agreement where ARLLC supplies equipment switches to 50 year Conference Agreement where Augusta supplies and repairs kitchen equipment with no revenue from Conference Center.
  4.  No accounting provisions for backcharged labor to Hotels or any other credits, refunds, rebates, or other benefits going to Augusta.
  5. Cross indemnification between Tee and Conference Center – sever-ability issues. WHO IS LIABLE?
  6.  Too many ways to circumvent Annual Plan, including that an unknown, unknowable “Standard” trumps everything, including Annual Plan.
  7.  Fringe benefits and bonuses, including for LLC PRINCIPALS, are unlimited.
  8. Accounting and auditing envision most of the accounting off TEE Center books, without rights of audit to ALL HOTEL ACCOUNTING records on a real time basis.
  9. Conventions can be booked using Tee Exhibition Hall while using Conference Center where Augusta gets no revenues.
  10. When Augusta signs these contracts, it assumes extraordinary indemnity provisions immediately so that it would have to advance payments to the Manager to defend the Manager from actions by Augusta
Time will tell how many of the above issues are addressed, handled, and rectified.
-AG

Special Report: Augusta Catered to Death

TEE Center under construction August 2012

Originally posted on CityStink
Thursday, October 4, 2012
Augusta, GA
By Bradley Owens
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.
* Editor’s note: Please click on blue text to view documents referenced in this article*
Houston, we have a problem. Rather the City of Augusta’s special counsel Jim Plunkett and his predecessors who created the TeeCenteragreements have a host of problems. Most of them center around “ Conference Center” versus “Convention Center” but the Tee Center Catering Agreement is the lynchpin. Our Augusta Today and CityStink.net investigative team now seems prescient in our dogged pursuit of the elusive kitchen equipment.
The entire TeeCenter fiasco began with an unsigned, undated “Term Sheet” that became the only partnership agreement with Augusta Riverfront LLC that was approved by the Augustacity commission. This agreement refers repeatedly to the “ Conference Center” as being subject to the preexisting agreement between the partners. It says that Augusta and Riverfront agree to “ modify their agreement for the operation of the Convention Center to include the Trade Center. ” Trouble was, there was no agreement to operate any “Convention Center”, only the 1999 agreement for the operation of the “Conference Center.”
Since then there has been considerable publicity given that the entire Tee Center, Parking Decks, and existing Conference/Convention Center are now the “Convention Center,” which furthers the misconception that there ever was a “Convention Center” before, but all the while the lawyers reverted to labeling the existing facility as the “ Conference Center.” Was it deceit or wanton incompetence? Read on and you decide.
On September 24, 2012 Augusta Riverfront LLC’s Paul S. Simon appeared before the Augusta Commission with an ultimatum – Execute a plethora of contracts, assignments, releases, modifications and other legal documents within 22 days or face cancellation of Tee/Trade Center events.Augusta then knew it was being held hostage to the lawyer’s handiwork, efforts that Administrator Fred Russell promised were nearly complete 3 years ago.
Included was the catering agreement. This document spells out that the new kitchen built in the TeeCenter, but legally carved out as the “ Conference CenterAnnex”, is to serve both Marriott hotels and the existing Conference Center. Why is the term “ Conference Center” so important? Why, it is because if the existing Conference Center agreement was intended to continue – which it was – it means that the $1.4 million of kitchen equipment that Augusta bought under a controversial change order to the Tee Center Contract will mostly be used to generate revenues for the Marriotts and not Augusta. This is because the existing Conference Centeragreement pays Augusta 5% of the rental space revenues and nothing else, including catering.
TEE Center abuts The Marriott Hotel
Unless Riverfront has quietly reimbursed the city, Augusta paid $1.4 million for kitchen equipment that it will get almost NO USE OF, because the Trade Centerspace will be used primarily for exhibits, with attendees adjourning to meeting rooms in the freely-catered Conference Center for meals. So far, our Georgia Open Records request responses fromAugusta have not shown that the Commission ever agreed to relieve Riverfront of the LLC’s responsibilities for kitchen equipment.
Under the circumstances, it would be wildly irresponsible for Augusta’s Commissioners to agree to pay for any of the kitchen equipment, particularly since some of the charges on the vendor’s invoices was to repair Riverfront LLC equipment! (Under prior agreements Riverfront owned the equipment) Where is our $1.4 million? Is there any prohibition whatsoever barring Riverfront from running a commercial catering operation citywide out of the Conference Center portion of the Convention Center, using the $1.4 million ofAugustakitchen equipment?
Worst of all the catering agreement mentions in several places that services to the hotels, to the restaurants, and to the existing Conference Center will be provided by the kitchen. There is no operational procedure manual to set out controls over food and beverage procurement, use or inventory for theTeeCenter versus these other operations. Without controls and in the midst of all of these operations that consume food and beverage, how willAugustaavoid being looted from various parties on and off the premises? Will there be household with freezers of steaks, courtesy ofAugusta taxpayers?
How many of the Marriott’s existing catering staff will be assigned to theTeeCenter contract? Since the vast majority of the catering seems to be outside of theTeeCenter, why should management level employees be charged to theTeeCentercatering agreement?
In life, timing is everything. With the unsigned, undated Term sheet that began the Tee Center project in 2007, the seed was planted in the minds of the public and the commission that there was going to be a new  Convention Center agreement. After that the branding was changed to emphasize the  Convention Center labeling, including announcements at the opening of the Reynolds Street Parking Deck and at last month’s  meeting. Behind the scenes the legal wording, finally disclosed at the September 24 meeting, narrowly focused on the Conference Center and preserved the sparse 5% payout to the city for the existing center, with no provision for catering revenues. The wording of the catering agreement is that catering only applies to the Tee/Trade Center.
Meanwhile, the Amendment to the Core Agreement extends these agreements out 50 years. Never mind a reported reduction to 15 years.
Throughout these agreements, one thing is repeatedly clear. The hotels and these agreements, which in the hands of others not as civic in their mindset as Paul Simon and Billy Morris provide an UNLIMITED CONDUIT to taxpayer funds, can be SOLD! In the hands of money hungry financiers of Wall Street, these agreements are loaded guns aimed directly at the finances of we Augustans.
How much more can Mr.’s Morris and Simon get for their two Marriott Hotels with $70 million of dedicated Augusta buildings permanently and legally bound to them with an UNLIMITED conduit into the general revenues of Augusta Richmond County?
There you have it, reader. Augustans already find themselves facing a property tax increase. How many more tax increases will be coming to feed the Tee/Trade/Conference/Convention monster?
When the finances of Augusta crater it will be in no small part because of Catering.***
BO
**Cost Recovery Analyst Al GrayPresident of Cost Recovery Works, Inc. contributed to this report.

 

Tee Catering Definitions From 9-2012 Agreement1999 Core Agreement Conference Center – Revenues

Special Report: Is it TEE Total Extortion?

Originally posted on the defunct CityStink.net site October 3, 2012

Wednesday, October 3rd, 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.
 
*Editor’s Note: Click on highlighted text links to view documents referenced in this report*
In the five-year twisting tale of Augusta’s TEE Center project, we who have observed the events and decisions as they happened, learned to expect the unexpected. This didn’t keep reporter Susan McCord’s tweetfrom the September 24, 2012  Augusta Commission meeting from astounding me.
 
“Paul Simon: If documents aren’t approved by Oct. 15, (we) will have to cancel January police chiefs convention at TEE center,” she typed. My jaw dropped at the audacity of the city’s Tee Center partner suddenly resorting to what looks like a shakedown to get a management deal approved.
Simon’s Augusta Riverfront LLC is getting a $2 million a year subsidy courtesy of an unsigned, undated proposal from 2007 and that isn’t enough for him and his partners at Augusta Riverfront LLC?  Augusta has been held hostage since then. What is worse is that the City Administrator, legal counsel, and Augusta Convention and Visitors Bureau might be the source of this clumsy, heavy handed way of extorting an agreement out of a suddenly reluctant Commission.

Augusta Held Hostage

It is impossible for me to accept this assault by Management Agreement on the city’s finances in silence.
·         Augusta built at least $50 million in new buildings across multiple parcels owned by this Riverfront organization and probably $20 million of existing buildings, yet now is held hostage to liens on some of them?
·         There will be hundreds of pages of recorded easements, cross easements, assignments, and agreements on these lands, meaning that Augusta has all of the costs of land ownership, but few of the packages of rights that come with land ownership. Can’t we at least get a fee in lieu of taxes?
·         The unsigned, undated partnership agreement from 2007 says throughout that Riverfront is responsible for kitchen equipment while saying that Augusta is responsible for the kitchen space. Augusta has not been able to show where its City Commission has ever voted to change the partnership agreement, only that Augusta approved the change order to add $1.4 million of equipment to a project that Riverfront agreed to participate in as a builder and operator. Where is Augusta’s money?
·         The September 24 meeting was the first the Commission as a body had seen of the catering or management agreements and they were presented with an ultimatum that the documents have to be approved within 22 days! Five years of dithering and now the people of Augusta are presented with a manufactured emergency? Why? Keep reading!
·         Can we say there might be C-O-N-S-P-I-R-A-C-Y within Augusta government? Darryl Leach was the General Manager of the Augusta Marriott.On September 24, Paul Simon announced the Tee Center is now the AUGUSTA CONVENTION CENTER.The agreements that Augusta has been commanded to execute are now with an entity called the Augusta Convention Center Management LLC. This is where things get really get good. Darryl Leach is now the General Manager of the Augusta Convention Center. In fact, it seems nearly all of the former Marriott Augusta Staff, Don Fuller, Janet Pierce , Greg DeSandy  and  Sharon Koon, are now on the Augusta Convention Center Team!

The Augusta Convention Center
Who gets to decide if all, any or part of these employees – whose salaries and fringe benefits likely exceed a million dollars – who used to be Marriott costs become Augusta costs? The Management Agreement says the  Augusta Convention Center Management LLC “… shall have discretion and control, free from interference, interruption or disturbance, in all matters relating to management and operation of the TEE Center” and “Manager shall select, employ, promote, terminate where appropriate, supervise, direct, train, and assign the duties of all personnel which Manager reasonably determines to be necessary or appropriate for the operation of the TEE Center” This Management agreement and the catering agreement provide capability for 100% of former Marriott employees to shift onto the Augusta payroll! It sure looks like Augusta will have no rights to contest this cost shift once this agreement is executed
(*article continues below)
The Augusta Convention Center

·         Consultation with the Georgia Secretary of State Corporations Division does not show Augusta Convention Center Management LLC as being registered to do business in Georgia. Augusta is being demanded to execute an agreement with an entity that does not yet exist?
·         Augusta is forced to deposit $250,000 at the beginning of the year into the operating account, but if the balance in that account falls below the amount to fund that account for the next 90 days, Augusta is required to contribute from GENERAL REVENUES enough funding to meet those expenses without regard to how soon the next $250,000 funds injection is required!!!!! The original partnership agreement limits Augusta funding requirements to $250,000 for operations and $100,000 for capital, yet this management agreement calls for an unlimited pipeline of funding from Augusta? Who authorized or negotiated that?
·         The unlimited ability of this  Augusta Convention Center Management LLC to establish what costs are is not limited by the Annual Plan that the Augusta Commission approves, because “the Annual Plan will be only a planning tool.” Also, shouldn’t references to any Annual Plan limits be clearly defined not just as the types of costs to be included, but the amounts as well?
·         The management agreement provides for annual audits only, with no real-time or even monthly reporting. How can Augusta monitor these cost reimbursable agreements without continuous reporting and the strongest of audit rights? Shouldn’t these agreements be made subject to open records requests? Maybe the Augusta Chronicle can help us! No?
·         The management agreement called for the CVB to begin marketing for the Convention Center with execution of the construction contract to the tune of $350,000. However, the use of these funds by the CVB to market the Center before it opens was against the city’s own ordinance.
Summary
The Tee Center management agreement looks to have morphed into an agreement that allows most of the administrative staff of the Augusta Marriott to be shifted to Augusta’s Conference Center expense. There are unexpected liens on some of the property under the Center and a parcel that was not liened never was conveyed prior to construction. The Augusta Administrator promised the agreement was nearly complete over 3 years ago and now has provided the city commission with just 22 days to review and approve the contracts. The entity that Augusta is contracting with may not exist yet. The operating expenses, capped by the 2007 partnership agreement, are now unlimited conduits to the general funds of the city. The contracts fail to provide real-time program management and accounting.
***************
The Augusta Commission should walk away from these agreements and put the management and catering agreements out for bid. Otherwise outside counsel from far outside of Augusta needs to be brought in to renegotiate the management agreement to conform to model contracts from other cities.
Beyond this, it looks to me that Commissioner Bill Lockett’s idea of a forensic audit or a county-funded investigation of these transactions needs to be revisited. The project was funded by sales taxes, there are ample unused sales tax revenues in the coffers of Augusta, and legal costs are legitimate uses of sales tax money.
Can all of these issues and the progression toward the renaming of the TEE Center as the Augusta Conference Center be just incompetence?
Can Augusta afford an unlimited pipeline to its general revenues?
I don’t think so.***
AG

Analyzing the Aftermath of the Parking Deck Saga

Originally posted on CityStink
Tuesday, August 28, 2012
Augusta, GA
By The Outsider
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.

After  the more than nine month long ordeal over the Reynolds Street Parking deck debacle, yesterday’s events at the Marble Palace that resulted in the approval of  the long beleaguered parking management contract may have seemed rather anti-climatic.Indeed, we got wind that approval of the contract was imminent — if certain conditions were met. Key to passing the agreement was the inclusion of safeguards for the city that specifically stated in clear language that Augusta Riverfront LLC (ARLLC) could not bill the city for their overhead expenses. Previous proposals were riddled with loopholes that ARLLC could exploit, amounting to a blank check from the taxpayers.
Also, included in yesterday’s contract was a clause giving the city the right to audit ARLLC’s books to verify their compliance. This was a crucial safeguard for the city and one that ARLLC’s lawyers were fighting all the way up until the final hours leading up to yesterday’s vote, but in the end they yielded and agreed to include the rights to audit.
Wayne Says Sell It!
Commissioner Wayne Guilfoyle (dist 8) deserves a large amount of the credit for these safeguards being included in the final contract. We understand that the lawyers were trying to twist Guilfoyle’s arm all the way up to the final hours to get him to bend under the pressure and approve the deal without these key safeguards, but the district 8 commissioner would not budge. He stood his ground and insisted that these conditions be met or his vote would be NO. Guilfoyle added the stipulations and to the agreement in his motion yesterday to approve the contract.
The citizens of of District 8 in South Richmond County can feel confident that they have someone like Wayne Guilfoyle representing them. Though a freshman commissioner, Guilfoyle has demonstrated leadership on a variety of important issues and continues to exhibit a willingness to study the details of these complex contracts, weigh all of the options, and play hardball when necessary to get the best deal for the taxpayers. Augusta could use more commissioners like him.
Not Gonna Be Bowled Over
Mayor Pro-tem Joe Bowles deserves credit for negotiating better terms in the contract that gives the city a much more favorable split of deck revenues at 70/30%. He also negotiated the inclusion of a pedestrian skywalk over Reynolds Street from the deck to the TEE Center that will enhance public safety and steer patrons to the city-owned parking spaces on the upper levels. Bowles even found the savings in the construction of the deck that will pay for the skywalk at no additional cost to the city. It’s this keen eye that makes Bowles a consistent leader on the commission.
The mayor pro-tem is also willing to admit when mistakes have been made and then work diligently to correct them. He also has a knack for forging compromise through the art of negotiation, but is willing to stand his ground when necessary to make sure the interests of the taxpayers are protected. His leadership will certainly be missed when his term expires at the end of this year, but Bowles will leave office with a nice legacy and he has certainly set the tone for all future mayor pro-tems.
Wise Man Lockett
From the very beginning, Commissioner Bill Lockett has been a vocal critic of the parking management deal with Augusta Riverfront LLC. This is probably why he voted against approving yesterday’s contract — as a protest of  the entire process. That is understandable. Time and time again, Lockett’s wise caution from his in-depth study and analysis of these complex matters has been proven right. Lockett doesn’t take anything at face value. He wants to see it in writing — he asks the right questions — he goes over every detail with a fine tooth comb. Some people may find this tiresome, but without Lockett’s determination to get to the truth and his attention to every detail, Augusta would have likely ended up with a much worse deal nine months ago locking the city into a 15 year contract with ARLLC instead of just 5.
Though ultimately unsuccessful in getting the forensic audit to probe the process that gave us this debacle, Lockett was right in asking for it, and we predict when all is said and done he will be vindicated on that issue as well. Augusta could use more commissioners like Bill Lockett who understand that their primary duty is in protecting the interests of the taxpayers of Augusta instead of bending to the whims of people like Paul S Simon. We suspect this is why Lockett does not face opposition for reelection.
Theater of the Absurd
On the opposite end of the spectrum is outgoing Commissioner Jerry Brigham, who fought vehemently against all attempts to give taxpayers a better deal over the parking deck. In what can be best described as a scene from the theater of absurdity, Brigham jumped at the opportunity yesterday to get in front of the cameras after the vote and tell a reporter for WJBF News that the final contract  is “.. financially more stable than what was originally proposed and I think the Commissioners feel better, in general, with this proposal.
It’s too bad the reporter did not retort by saying something along the lines of:
But Mr Brigham, weren’t you the one who wanted to rush this deal along and fought against these changes from the very beginning?
Indeed, if Brigham had of gotten his way, the parking deck contract would have been passed last Fall and it would have been for 15 years instead of 5 years and would have been riddled with loopholes that ARLLC could exploit as a blank check, using the taxpayers as their own personal piggy bank. Brigham’s contract had none of the safeguards and denied the city the rights to audit. And when these deficiencies were brought to his attention by government watchdogs, Brigham refused to budge and admit that errors were made. So maybe Mr. Brigham’s statement means he has had a change of heart? We doubt it — it’s probably more about saving face and trying to take the credit for the hard work of others who in the end forged the compromise that got a much better deal for the city.
Unlike his colleague Joe Bowles, Brigham will leave office with a cloud over his head. In every step of the process, Commissioner Brigham fought hard for the interests of Paul Simon and Augusta Riverfront LLC over those of the taxpayers in his district and the city as a whole. We can only hope that his successor will be someone more like Commissioner Guilfoyle, Bowles or Lockett. The voters certainly have a choice before them this Fall.
What Happens Next?
Though this closes the chapter on the nine month long saga over the parking deck contract, the issue is far from over. Now commissioners will have to decide how to hold the people accountable who created this mess in the first place. Why was the RFP (Requests for Proposals) process circumvented in favor of a hideously unfavorable deal with ARLLC — one for which they did not even submit a bid? Why were commissioners consistently mislead about the land under the deck being donated? Why were commissioners not informed of the $millions  worth of liens on the property until after government watchdogs discovered them? Why were commissioners not made aware of the results of  2009 Parking study that showed that a $12 million parking deck was not even necessary and a $1 million surface lot would have sufficed. Why did city-hired outside counsel agree to such atrocious terms under previous contract proposals that were written entirely by the lawyers for ARLLC?
Now that the contract terms have been settled these are the questions commissioners need to ask and find answers. This process did not happen by mistake. What should have been a simple and clear-cut process was intentionally made more complex and nearly incomprehensible to most commissioners, the media and the public in an effort to sneak through a contract riddled with loopholes, lacking controls and caps on expenses and absent safeguards like the rights to audit. The people responsible for this must be held accountable so that this does not happen again. This ordeal also demonstrates why the city needs consistent procedures and guidelines governing these kinds of contracts. What we currently have is a an ad-hoc process governed by whim. That must change or Augusta will keep repeating the same mistakes with future contracts.
As the agenda now moves on to the the much larger TEE Center contract there is much more at stake. If commissioners have learned anything form the parking deck saga, they  now know not to take anything at face value and to study every detail and spot every loop hole. Instead of rushing something through like commissioners did in December of 2009 that gave us this mess, they would be wise to yield to caution to insure that the interests of the taxpayers are protected above all else. If commissioners ask the right questions, study the details, and use good judgement and common sense, we don’t expect this process to drag out for nine months. But it’s entirely up to them.***

OS

Breaking: Parking Deck Contract Approved with Conditions Added

Originally posted on CityStink
Monday, August 27, 2012
Augusta, GA
From CityStink.net Reports
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.

We have just received word that the management agreement between the city of Augusta and Augusta Riverfront LLC for the Reynolds Street Parking Deck has been approved in a 6-2 vote in a special called meeting of the Augusta commission just minutes ago. The parking contract has been stalled for months after revelations came to light that the city did not own the land under the deck and that it had liens on it for more than $7 million held by Wells Fargo bank. In addition to this, there were serious questions about the city being on the hook for paying the overhead expenses for Augusta Riverfront LLC, that could amount to a blank check.
During a special called meeting last Tuesday, Commissioner Joe Bowles proposed a 70-30% split of deck proceeds with ARLLC and adding a pedestrian skywalk from the second floor of the deck to the TEE Center. Bowles says that cost savings from construction of the deck would pay for the skywalk. The skywalk is important for two reasons: 1. It will enhance public safety for people attending events at the TEE Center and 2. It will encourage deck patrons to park on the upper level spaces owned by the city instead of the ground floor spaces owned by Augusta Riverfront LLC.
Commissioner Wayne Guilfoyle added the condition of the skywalk to the motion to approve the contract at today’s meeting. Voting in favor were Guilfoyle, Bowles, Johnson, Jackson, Brigham, and Aitken. Commissioners Hatney and Lockett voted against. Commissioners Smith and Mason were absent.
As we understand it, some key provisions that we suggested earlier have been included in the contract that was approved today, in particular the Rights to Audit and language that specifically says that the city will not be liable for the overhead costs of Augusta Riverfront LLC. This was crucial for passage. As we understand it, the following amendment to the agreement was included in the contract:
Section 10.14 Plain Language Clarification of Certain Agreements. 
For the avoidance of any doubt, Manager’s only compensation under this Agreement shall be the Management Fee under Section  3.1, and Manager shall not “mark-up” or add any profit, administrative charges, or overhead to any expenses charged to Owner under this Agreement (i.e., costs and expenses to operate the RSPD charged to Owner will not exceed the actual out-of-pocket payments of Manager). Furthermore, Owner shall have the right to audit all books and records of Manager as are necessary to determine Manager’s compliance with this Agreement, including the previous sentence.
If indeed the above amendment was added to the contract, it puts the city in a much better position.Though far from a perfect agreement it is much better than what commissioners were presented with just a week ago. The Rights to Audit will give the city a powerful tool to make sure that ARLLC is in compliance with the contract. It also closes the biggest loopholes that could have amounted to a blank check for ARLLC by being able to bill the city for unlimited overhead expenses.
We will have an update as more information becomes available.***

 

Simon Says He is Cheaper; Watchdogs Say “CAP It!”

Friday, July 20, 2012
Augusta, GA
By Bradley Owens

Elections have had October surprises but lately anytime the Augusta Richmond County meets with a parking deck agreement on the agenda, watch for the wild, woolly, and unexpected.

The February meeting saw a last minute compromise whereby proposed parking deck manager Augusta Riverfront LLC (ARLLC) was conditionally awarded a management agreement with the condition that the land they own under the Reynolds Street Parking Deck (all but a small parcel) being transferred free of the almost $7,000,000.00 in liens that bedeck the title to the land bank

The Augusta-Richmond County commission meeting on Tuesday, July 17, 2012, saw a morning pre-meeting surprise, when ARLLC’s Paul Simon offered a cost comparison between numbers he suddenly provided and those submitted by Ampco Parking, who had been recommended for award of the management contract for the parking deck based upon its competitive low bid. (It is noted that Administrator Fred Russell directed the award to ARLLC, who was not part of the bid process, after notifying Ampco that its bid was rejected.)

There is no surprise that Simon says his numbers were $14,000 lower, I mean what did you expect him to say, “We are bilking you?”

The surprise was that he took the risk of putting numbers to a combination of two dissimilar deck agreements, one cost-reimbursable and the other a net lease deal, with the gamble that the commission would take his last-minute, arguably improperly-disseminated (through Fred Russell) gambit at face value and approve the management agreement.  All of this happened despite ARLLC’s failure to get the liens released hence clearing the title for the land bank and doing as they promised.

The public needs to take his bet and counter with one of its own.

Open Challenge to Paul Simon

Dear Paul,

Since you are pleased to present such a reasonable budget, let’s cap it at the numbers shown. We agree that you really don’t need the following to make this a profitable deal, so let’s drop these items from your earlier proposal;

·        $250,000 referenced in the capital budget section,

·        The liability insurance cost reimbursement that would have been covered by the Ampco fee

·        Overarching power to expend Augusta’s money as you see fit

·        The ability to define “costs” in whatever manner you deem expedient

·        Latitude to assign high-priced employees to the deck deal

·        Two fees totaling $50,000 (Ampco’s was less than $18,000)

·        The ability to exceed the budget with impunity (Ampco was prohibited from doing that, weren’t they?)

Those of us in the community have read repeatedly in ARLLC partner Billy Morris’ newspaper for the need to have sound financial policies in government operations.  That being the stated position of the “Big Boss” we are quite sure you will see the need for a procedures manual by which Augusta’s auditors can judge compliance with some contract mandated standards, won’t you? Such a manual was going to be required of Ampco so certainly you are prepared to give us one, right?

Yes, Paul, we are pleased that you have put forth these solid numbers and are sure that you would be willing to share those for the Conference Center Deck, so we can see about how the second $25,000 fee is accounted for. We are also interested to know about how the costs relating to the 150 ground level spaces in the Reynolds Street Deck that you own, subject to liens, are treated. Our “back-of-the envelope” calculations brought that cost, based upon your numbers, to about $47,000 or so a year.

Mr. Simon, if you are willing to cap the costs at the numbers shown, eliminate all of the provisions in the management deal that make it a blank check to your LLC and dispense with those pesky liens, I think we can make a deal.

Because then, and only then, you just might be on the same footing as Ampco.***

B.O.


**View Paul Simon’s “comparison” below**

ARLLC – Budget Comparison