Even an Overseer Needs Oversight

Heeryly Absent

Originally posted on CityStink
June 9, 2013
Augusta, GA
by Lori Tabb Davis
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.
The entire hullabaloo over extension of Augusta’s Project Management contract with Heery International involving community liason Butch Gallop, campaign contributions, gifts to county commissioners, and other hysteria, brings one repetitive thought. Where is the oversight over the Heery overseers?
Can I say totally absent? For certain it is stunningly absent.  For now, I brand it Heeryly absent.
When our Augusta Today and Citystink.net team of contributors submitted Georgia Open Records Act requests regarding the Heery contract itself and various contract documents from projects that Heery is and was being paid to manage, control, and supervise for the City of Augusta, we found absurd contradictions with Heery’s role as overseer.
When we looked in the contract and elsewhere for the project procedures manual governing Heery’s performance of the work, we learned that Augusta had none. Our sources told us that an early effort to adopt one was squelched.
  1. Because there was no project procedure manual, perhaps that was the reason that there was no job progress photography protocol to provide us with date-stamped color photos, accompanied by delivery and storage details, of the infamous Tee Center Kitchen Equipment, only black and white pictures of boxes in an unidentified, undisclosed location.
  2. Because there was a lack of coordination of design documents for the Tee Center and already-operating Conference Center, perhaps that is why my open records request for the design of the HVAC for the Tee Center and Conference Center dating back to the days when the Marriott was a Radisson was met with a data disk with blank directories from the city. I fault Augusta for that, but if Heery is Augusta’s Program Manager, shouldn’t they make sure old and new documents are better coordinated?
  3. Because it looks like general contract limits on change orders do not appear to carry through to subcontracts, eye-popping amounts of Augusta’s funds could be in jeopardy.
  4. Heery, if I understand correctly, was paid rates up to and exceeding $200 per hour to provide such services!
  5. The new estimated costs Heery wants to extract from Augusta has been presented at an increase of $1.6 million, including a $149,000 increase/ overrun for the Tee Center, a project that was a total disaster from A to Z.
If Heery is kept, at least $350,000 needs to be cut from that 1.6 million dollar number! I think if all aspects of it were examined, the number that could be cut would be triple that.
How about oversight allowed to Augusta to oversee the overseer Heery by their contract? That was Heeryly absent, too.
  1. The contract cost was put on auto-pilot with 4% annual rate escalation built into the original 2004 Contract. This continued until 2011, when Heery billed slightly lower rates and continued to do so into 2013. The 4% escalation remains, with a consumer Price Index adjustment. With inflation likely to pick up, who knows what the rates will be with compounding like Augusta has seen.
  2. The 2004 contract allows confirmation of the direct cost classification of Heery’s employees without providing what the billing classifications are in terms of employee education, qualifications, certifications, and experience. It sure looks like the program manager Heery has wide latitude to assign people to this contract without Augusta really having the criteria set for their billing rates! (Does Butch Gallop ring a bell? What is a community liason anyhow?)
  3.    The contract does not provide for proof of the direct costs of Dukes, Edward, Dukes or Gallop and Associates, who are not Heery employees, but Heery “sub consultants”.  What are they?
  4.  Access is restricted to “accounting records”, when it is probably the Heery personnel files that would best be used to verify billing classifications.
  5.  There is a statement –  “Owner may only audit accounting records applicable to a cost reimbursable compensation” This sure sounds like the negotiated rates are sacred and cannot be analyzed by Augusta. Such limitations must go. When paying millions of dollars for professional services, shouldn’t Augusta be able to audit anything that touches on what the city is getting?
Our team’s investigative efforts have born amazing results for Augusta and it is a shame to see them stymied by restrictions on audit rights. We saw that the Messerly waste water contract with ESG mandates that Georgia Open Records access be extended to every significant subcontractor. Subcontracts and major supply orders under Heery-managed general contracts need to be brought in line with that standard too. We cannot help if we are stonewalled by contractors and the administration.
After the numerous controversies and fiasco’s involving Augusta projects, Butch Gallop and Associates, the Tee Center, and Tee Center parking decks, it is clear – the overseer needs oversight and the Augusta administrator, starting with George Kolb and continuing under Fred Russell,  has not provided it, he has avoided it. Heery, understandably aiming to please the client, looks like it became a rubber stamp.
If the Augusta Commission extends this contract, citizens should expect better controls, refunds of any miscalculated rate overcharges (if any exist), and lowering of rates to reflect known factors favorable to Augusta. Augusta needs to ditch Butch Gallop now, too.
Our Augusta reformers love old movies and I used to get all into being Lois Lane. Here is a segment that came to mind as I pondered all of this.

“You…you’ve got me, who’s got you?”

Harrisburg in Augusta is in free fall. Deke Copenhaver might be an Ironman, but he is no man of steel. Heery has him, but who has Heery?  Looks to me nothing but hot, stagnant city air.
Somehow I think both would just as soon see me, go splat. Augusta too, if there is a dime involved for them to get.

–    LD

Special Report: Out of Line Asking for a Single Line?

TEE-Totally Fried Circuits
A $2.6 million Cover Up?
Originally Posted on CityStink
Thursday, November 8, 2012
Augusta, GA
By Lori Davis
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article
In $15 Million Augusta CONference Center Pays$25,000 a Year to City  this writer brought up the issue of the enormous electrical power costs that were evident in an earlier Georgia Open Records Request in which the accounting for Augusta Conference Center lease payments was obtained. Those records suggested that the Conference Center Manager, Augusta Riverfront LLC (owner and operator of the Marriott hotels), was using estimates to separate power used by the Marriotts from that charged to Augusta’s Conference Center rather than precise separate metering.
That got me to thinking. If they are estimating for the Conference Center, where they are responsible for the power bill, are they going to estimate again for the TEE Center power? Will there be separate metering for the bill that the taxpayer has to pay out of the General Fund of Augusta-Richmond County?
In a Georgia Open Records Act Request submitted on October 31, 2012 an official inquiry was made to access the simple single line diagram that would answer my question. A single line diagram looks like this:
 It doesn’t show locations, specifications, or details, it just shows how power enters a development or building and the uses to which it is directed. Imagine the shock when the response from Augusta’s Law Department was a refusal to provide an answer to my request based upon” considerations that disclosure “would compromise security.”
Why is Fred Russell’s and Deke Copenhaver’s Law Department engaged in this cover up? Russell flits about, dismissing public watchdogs’ efforts as being concerned over nickles and dimes, when he hides the truth about the legitimacy of a $5.2 million ($350,000 for 15 years) Tee Center Cost? Proposed Management company executive Paul S. Simon thinks that ” this is a very expensive building to operate”, while citing a $350,000 annual power bill as a reason, so a key player doesn’t see this Fred’s way.
Sources tell me that the way the TEE Center electricity was routed was such that the Tee Center, where Augusta pays the bill, is on the same incoming circuit as the Conference Center, where Augusta Riverfront LLC pays the bill.  They say that, in the aftermath of last Friday’s meeting between three Augusta Commissioners with Augusta’s contracted counsel and an Augusta Riverfront LLC attorney efforts are underway to accomplish separate metering.
The watchdogs want to see proof of developments on the issue. We want to see savings.
At just one-half the costs indicated by Mr. Simon, this is a $2.6 million question. It is good to see a team of Augusta Commissioners looking for answers that Fred Russell and the Law Department intend to hide.
-LD

$15 Million Augusta CONference Center Pays $25,000 a Year to City

Originally posted by CityStink
Thursday, November 1, 2012
Augusta, GA
By Lori Davis
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.
Augusta Riverfront LLC is the proposed caterer for the City of Augusta’s new Tee Center and a sister company is slated to be the Tee Center Manager. On Tuesday Augusta Riverfront’s Darryl Leach appeared on the Austin Rhodes show on WGAC to defend the controversial contracts for catering and management presented to the Augusta Commission.  During the show Leech brought up the fact that the existing Augusta Conference Center had cost Augusta about $14 to $15 million to build.
Since I just got back a response to my Georgia Open Records Act Request for Conference Center lease payments last week it was surprising to hear that those buildings cost $15 million 11 years ago. What was more surprising is that Augusta only sees about $25,000 a year in lease payments on that $15 million complex!
Yes, you read that right. Augusta’s return on the Augusta Conference Center   is 0.17% a year!
Scanning the accounting I got from Augusta’s legal department was interesting, to say the least.
In the Tee Center Workshop on October 10, 2012, Augusta Riverfront LLC President Paul Simon said this regarding the Conference Center  lease : “However, we get in that case we get all of the profits from the center except we give the city 5% of the room rents, not just catering .” Maybe he meant to say  “just not catering”, but then Augusta attorney Jim Plunkett earlier in the same meeting referred to Conference Center profits/ losses being shared by the city.
Wait a minute. The records that I got from the records request show that the leases were figured at 5% of the greater of Center expenses or Center revenues, with Augusta getting $23,395 in 2003, $21,493 in 2004, $25,137 in 2005, $24,381 in 2006, $27,559 in 2007, $14,828 in 2008, $26,277 in 2009, $26,434 in 2010 and $25,992 in 2011! The revenue figures were room rentals alone with NO CATERING REVENUES INCLUDED!
The 1999 Agreement that covers this says that “miscellaneous revenue” is supposed to be included in the base for the annual lease payment calculations. Isn’t catering an item of “miscellaneous” revenue, when it was not excluded from the contract language for the lease payment calculation?
The Conference Center lease says that the annual lease payment and reporting is supposed to be submitted by Riverfront’s “certified public accountant”, but  we could not find the name of the Riverfront  controller on the roster of Georgia CPA’s.
Expensive Issues for Augusta:
In 2008, Riverfront deducted $13,164 from Augusta’s payment for resurfacing the hotel parking lot. This sort of expenditure doesn’t seem covered as an Augusta cost because hotel parking lots are hardly this city’s responsibility, although it might be covered under the separate parking lease referenced in the agreement. It looks like Riverfront arbitrarily reduced Augusta’s payment to cover an expense that they felt entitled to.
If Augusta gives them a bank account that is an open pipeline to taxpayer general funds, like Finance Director Jerry Brigham told us two weeks ago will be the case,  will Riverfront feel ENTITLED to make deductions from payments to Augusta like this?
The next thing I saw that was surprising is that Riverfront figures ½ the electrical utility costs for the entire complex of hotels and conference center go to the conference center! How was this percentage arrived at? For the Tee Center, is this how the $350,000 Paul Simon suggests as the estimated Tee Center Power bill will be figured – a ballpark guesstimate? Should not there be separate metering for the conference center? Is there separate metering to make damned sure that the $350,000 power bill all goes to the Tee Center and not the hotel/conference center complex?
I have submitted an Open Records Request for the electrical design drawings for the Tee Center, in the hope of getting answers to these question from the Augusta Today membership, which now provides access to engineers who now join the Augusta Today and CityStink.net of investigators and watch dogs.
More than one commissioner is sniffing around this one, too.
Even bigger an issue is whether the Convention and Visitor’s Bureau is actively marketing events that cross over from the Tee Center where Augusta gets the costs, into the Conference Center, where Augusta gets no revenue – all revenue goes to Augusta Riverfront LLC.
More than one commissioner wants that question answered too.
It is wonderful to have a clear majority of Augusta commissioners now working for the people. I never thought I would see the day. Most frightening to those wanting to drain Augusta’s general fund should be this – These guys are showing real signs of UNITY!
When do we go the other way and start getting our money back? In the case of the TEE Center,  a power shift is overdue. From the looks of how aggressively Riverfront pursues Augusta’s money, the taxpayers need this commission to show backbone!***
Lori Davis GORA Response 10262012 – Conference Center Lease
LD
Conference Center 2008 Schedule

Breaking: Special Meeting Called Tomorrow to Discuss Parking Deck Agreement

Originally posted on CityStink
Monday, August 20, 2012
Augusta, GA
By Lori Davis
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.
Heads Up Augustans!!  The Commissioners are up to their old dirty tricks, or at least a few of them are. CityStink.net has received word that a special called  meeting requested by Legal Counsel will be held tomorrow August 21,2012 at 4:30 in Commission Chambers (see document at end of article). The one and only item slated for the agenda is —-You guessed it—-The Reynolds St. Parking Deck Management Agreement.. Mr. Paul Simon, partner in Augusta Riverfront LLC., will be presenting to the Commissioners.
Our question is, how can they do this when this item has been on the floor of the Commission several times already and has even been through a committee workshop.  Also, in the last Commission  meeting, another public workshop was called for on the very same item making the public quite aware of the problems associated with it? Commissioner Joe Bowles even railed against the lease agreement drawn up for  the city as being one-sided;  leaning toward the best Interests of Augusta Riverfront LLC, and not the tax payers. Why haven’t the citizen’s been properly notified of this called meeting? Why is the normal process for placing items on the commission’s agenda being circumvented to benefit Paul Simon and Augusta Riverfront LLC? Why did Mayor Copenhaver sign off on this?
 A closed door legal session has been requested after Mr. Simon gives his presentation in commission chambers. Commissioner will have to vote on whether to approve going into legal session.  What will be discussed that should be off-limits to the public and the media? Is this an effort to ram this lop-sided management contract through behind closed doors and keep it away from public scrutiny?
Word has it that Commissioner Brigham is the one who got this little meeting put together. It seems that Mr. Simon was to present before the full Commission as a delegation at the regularly scheduled 5:00 Commission meeting concerning the parking deck agreement, however, for some reason, his item did not make it on the agenda in time. Hmmm..  Wonder how that happened?
The broader question is, Why the rush? What is in this for Commissioner Brigham and the others who are agreeing to this called meeting? Those of us who follow the actions of government in this city know that all things are done for a reason. We also know that something stinks here. We are counting on our Commissioners who are tired of the way business is done in this city to take a stand.  Tomorrow is the day.  Who will break ranks and go the right way??? Anyone, anyone at all?  Or shall we say,”Business as usual?”***
LD
21august12 Called Mtg.

 

Special Report: Marble Palace in Full Panic Mode

Mayor Deke: “We’re Not Crooked, Just Stupid.”

 

Originally posted on CityStink
Tuesday, August 7, 2012
Augusta, GA
By Lori Tabb Davis
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.
We at Augusta Today and CityStink.net have waited for the hullabaloo over last Tuesday’s election to subside to respond to the cry of a panicked Augusta Commission and Mayor to -paraphrasing here – “Let the District Attorney investigate the TEE Center Parking Deck and bring in the Georgia Bureau of Investigation if there is fraud.”
What a total joke. That motion carried 7:1 but it was a plaintive cry for someone, anyone, to rescue the city from its many failures – be they criminal or just incompetence.
You could almost see the fear and desperation in the air. Matt Aitken wailed that Augusta “is becoming a laughingstock” while Joe Jackson moaned to the media about opening “Pandora’s box.
Now we are getting somewhere! We agree with the angst and terror. Attempting to throw the hot potato of the TEE debacle into D.A . Ashley Wright’s lap was never going to work. Mayor Deke Copenhaver instructed that we should “present” our evidence to Ms. Wright. He obviously missed a very key point – The evidence is in his possession and custody. We have gotten where we are with slow, diligent investigation of limited facts based upon the laborious Georgia Open Records Act request process.
Deke, you have the records. Why not throw all of them open to Augusta Today and CityStink.net? We welcome your new found candor, but you just are not sincere, you are desperate to shake us off the trail.
You almost sound as if you are wailing “We are not criminal, we are just Stupid!” You won’t get any argument here.
Augusta Today and CityStink.net contributor Al Gray and I went to Ashley Wright’s office on Friday, July 27 to relieve her of the hot potato and toss it back to you and the commission. Your motion was plain stupid. Of course, we don’t have evidence of criminality – that takes LAW ENFORCEMENT with a capability and DESIRE to investigate. The D.A. doesn’t have the resources. In Augusta these days there is no desire to investigate either, only to engage in endless cover up of very serious issues and FACTS – YOUR FACTS – that we discovered. They include:
    • Failure of City Attorneys to advise the commission of Millions of Dollars of liens on property under the $12 million Reynolds Street Parking Deck until after the structure was built. How did this happen when you have engaged special legal counsel?
    • Failure to execute a partnership agreement governing division of responsibilities with partner Augusta Riverfront LLC with respect to $50 million in buildings constructed on land owned by the LLC. How did this happen when Fred Russell promised in July of 2009 – three years ago – that these agreements were being “finalized?”
    • Failure to execute management agreements beforehand, with the result that the commission has a figurative gun to its head – execute a bad agreement or else – so that Commissioners Bowles, Guilfoyle, and Lockett are being forced into arduous hours of work to fix what $1500 an hour worth of “experts” have fouled up!
    • Submitting management agreements for the decks that are UNLIMITED BLANK CHECKS, putting the citizens of Augusta at risk of losing hundreds of thousands of dollars a year. We suspect the same is true of the TEE Center itself. Why are there 15 pages of direct incidences where the commercial terms, as Al Gray calls them, provide monetary benefits to Augusta Riverfront that are vastly more lucrative than the rejected Ampco contract? Why don’t YOU demand answers, as a growing number of savvy commissioners are doing?
    • Buying $1.4 million of kitchen equipment without getting commission approval for changing recorded agreements whereby Augusta Riverfront pays for kitchen equipment while Augusta pays for the building and the kitchen space within the TEE center. Why hasn’t the LLC been billed yet?
    • Where is the $1.4 million of kitchen equipment? Contractor billings show it as work complete, when the facts are that the kitchen was an empty space at the time of the billings back at the end of May! Just this week there was a report about the kitchen equipment being installed. Where are Augusta’s assets? Where was it installed as reported through May? Where is contractually-required documentation for stored equipment?
    • Where are the cost details whereby ANYONE can verify that contract limitations on the supplier/subcontractor overhead and profit of 15 % were not exceeded for the kitchen equipment? We extend this challenge to any public accounting firm wishing to help us and to YOU, since you have boasted of the city’s “fine accounting.”
    • Where is the authority to spend Augusta funds refurbishing Augusta Riverfront LLC’s equipment? Whose equipment is it after the work is done?
You celebrated killing a forensic audit that might have answered some of these questions. You threw it over to a D.A. Who you knew could not and would not do anything.
Mr. Mayor, why are you engaged in this massive cover-up?
To the Commissioners inexplicably remaining in denial – How are you going to remain in this community when the truth comes out – IT WILL – showing you failed in your fiduciary duty to the public?
Is claiming utter stupidity – since criminality is off the table – your final defense?
Augusta is rapidly acquiring a reputation as the most CORRUPT city in Georgia. Your actions in refusing to consider the evidence at hand are adding fuel to the fire.***
I agree with Commissioner Aitken that our government is a laughingstock.
You and the Russell Administration are in full panic mode. Some commissioners are now wide awake and the rest have to be getting antsy.
We will not be dissuaded by your cover up.***
Stay tuned. More to come.

Lori Davis

Special Report: Heerily Missing

Friday, July 6, 2012
Augusta, GA

The photo above shows  the floor of the Harrison Building, the old brick building shell preserved as an entrance to the Tee Center. This picture was taken on June 7, 2012 during a Tee Center hardhat tour by Convention and Visitor’s Bureau chief Barry White and Heery International’s Jacques Ware.

Heery is the program manager for the City of Augusta’s hundreds of millions of dollars in sales tax funded building project and Jacques Ware is the Heery project manager over the Tee Center.

Below is a photo of the Tee Center Exhibition Hall, the enormous 38,000 square foot open room that is to house the trade shows and various Tee Center exhibitions.


At the time of the tour, the CVB folks excitedly made the point that the floor was going to be poured the next week. This was on June 7.
Interesting.

shows that two whole months earlier, an incredible 84% of the concrete walls and slabs

were complete!

How can this be? The main exhibit hall room is a staggeringly large percentage of the total concrete slabs on the project. How can 84% of the slabs and walls have been complete back in March when the main floor was still dirt?

Isn’t Augusta put at risk, when subcontractors are paid so far in advance of the work performed? Isn’t the previously noted issue of $1.4 million of kitchen equipment that was paid for a nonexistent kitchen proof that Heery is just rubber stamping contract payments?

Let me see now. The commission relies on Fred Russell, who relies on Heery, who apparently sees construction completed that just isn’t there.

Unreliable fits and this time, it will be set in concrete…….eventually.***

L.D.

Special Report: Hotel Transportation Tax Heist?

Monday, June 25, 2012
Augusta, GA
By Lori Davis
On May 18, 2012, Augusta Today member Dean Klopotic submitted a Georgia Open Records Act Request to the City of Augusta for an accounting of the $1 ‘bed tax’ or hotel transportation tax which was enacted in 2008 to fund the capital and operating budgets for the TEE Center, plus to fund the Laney Walker Improvement project. The City Law Department responded with accounting reports showing the requested information.
The Tax was enacted via  Ordinance Number 7034  on February 19, 2008. Collections began March 1, 2008. The existing hotel tax comes under the framework of  Ordinance 7209.

Subsequent to the enactment of this ordinance, on Setember 16, 2008 Ordinance 7083 was passed and executed. This ordinance added Code Section 2-2-33.7 which reads:
The effective date for this funding provision shall be the first calendar month following the latter of the execution of a contact for the construction of the TEE Center or the closing for the acquisition of the real property on which the TEE Center shall be constructed Until the effective date all Transportation Fees that were to be designated for TEE Center expenses including the Transportation fees collected prior to enactment of this subsection shall be allocated to fund Transportation services as provided in

Paragraph 1.


Funds were collected and distributed to the Laney Walker Redevelopment Projects for the Fiscal Years 2008 through 2010, with the balance allocated to the Augusta Transportation Department. However, in Fiscal Year 2011, $350,000 was transferred to the Tee Center, Department 297061910, Account #5721110. Why? And who decided to blatantly go against the ordinance? If transportation suddenly stopped getting their allotment, Did anyone in transportation question this?  Did any of the money ever go for transportation?

The Ordinance does not allow the money to be transferredbecause the parcel that the Manager and Tee Center Partner Augusta RiverfrontLLC owns under the Tee Center (parcel #037-3-047-00-0)  had not been deeded over to the city at the time that the funds were transferred for Tee Center use
*see map aerial of parcel (yellow border) below*
In other words, the money should have continued to go to transportation even until this very day. This expenditure looks to me to have been a misappropriation of funds for a purpose other than allowed by Augusta’s governing ordinances.

Another issue is that  Ordinance Number 7034  allows the $350,000 to be spent on operation and maintenance costs for the Tee, while the tentative agreements with Augusta Riverfront LLC, Manager of the Tee Center, say that $100,000 is to go to the Tee Center Capital Budget, while the remaining $250,000 goes to operations and maintenance.
Is our City government a renegade operation who ignores its own ordinances?
Summary
So let’s summarize what all happened here. In order to fund the Laney-Walker redevelopment project with the hotel-motel tax it had to be linked to promoting tourism. That was done by linking the $1 hotel bed tax to transit (which is considered a tourism related service). Between 2008 and 2010, Augusta Public Transit was receiving its $350,000 per year from the $1 per night hotel/motel tax. However, those payments ceased in 2011 and were diverted to the TEE Center. But under the guidelines of the ordinance that established the new hotel/motel tax, the TEE Center was not eligible to receive any of these funds in 2011 because Augusta Riverfront LLC had not met  key stipulations of the agreement, such as deeding over a parcel under the TEE center to the city. Augusta Public Transit should still be receiving that $350,000 per year from the $1 per night hotel bed tax that was diverted to TEE operations.
To make matters worse, we discovered that the $350,000 diverted from transit to the TEE Center all went towards marketing. The irony in all of this is that all of the other hotels in Richmond County are paying into this new hotel-motel tax which is essentially going to market a competitor hotel, the Augusta Riverfront LLC owned Marriott which has exclusive use of the TEE Center. The marketing program paid for by the Augusta CVB for the TEE Center with this $350,000 conspicuously mentions the convenience of the Marriott hotel being attached to the facility but gives short shrift to other Augusta hotels such as the Ramada Plaza, which is just a few blocks away. The fact of the matter is, none of this money should have gone to the TEE Center in 2011 nor currently, and Ordinance Number 7034 and the tentative agreements between the city and Augusta Riverfront LLC conflict with one another.

Recently, I went on a tour of the TEE Center as provided by the Convention and Visitors Bureau.  I asked the question,”How will convention attendees get here from other area hotels?  Will there be a shuttle service provided?” The answer I received was a quick,”No.”  “That simply is too costly.” 
What if the money that should have been going to transportation all of this time had still been going to transportation as the ordinance had stipulated? Is any of this fair to the other hotel owners in Augusta who are being taxed to subsidize their competition? Why did the TEE Center receive $350,000 from the hotel/motel tax in 2011 when this was clearly a violation of the ordinance that established the tax?  Who authorized this diversion of funds from the transit department? 
Just imagine how much  $350,000 could have helped improve the transit system. And shouldn’t some of it go towards providing transportation from the other area hotels to this new publicly funded convention center that they helped pay for via the hotel-motel tax? Why does everything go towards the benefit of Augusta Riverfront LLC? These may be some questions other area hoteliers may want to start asking. Stay tuned for updates.**
LD

Below are the public documents cited in this article:

Hotel Tranport Tax GORAOrd 7034 Excise Tax Hotel Motel Amend City Code (1)Ord 7209 Amend Arc Code Section 2-32 to Provuide for the Use of the Hotel mOrd 7083 to Amend the Arc Code by Adding Subparagraph (a) to Paragraph 111 (1)Tee Land Acquisition

Forensic Audit Subcommittee Making Progress

Tuesday, June 19, 2012
Augusta, GA

The Forensic Audit Sub Committee chaired by Commissioner Bill Lockett met today for the second time,  to discuss the scope of work necessary for launching a Forensic Audit concerning the Tee Center Parking Deck.  As previously discussed in this committee,  the first RFP (Request for Proposals), was released for bid with a scope of work that  was far too broad. Firms who showed an interest in bidding on the audit were asking for more clarification and direction.

It seems that forensic audits can become quite pricey when looking for criminal wrong doing. As I left this meeting today, I knew I had to tell what took place. The only media present were two regular writers for the Augusta Chronicle; Susan McCord and Sylvia Cooper.  As I rode down the elevator with Mrs. Cooper, we exchanged pleasantries and talked about what had taken place in the meeting.  I said to her,” I have got to get an article out for City Stink on this…  You do know that we named our blog in your honor.”  She acknowledged that she knew that, and said to me,”Your job will be easy.” I said, “I know it will, because I will be able to write exactly what happened in that room.”  We left it at that.  Here is what happened:

Commissioner  Lockett called the meeting to order and began to lay out his reasoning, a second time, for the need of a forensic audit. As he began his remarks, he talked about the fact that  a good portion of the scope of the work  in question had already been done by a group called, Augusta Today, and through a blog called, CityStink.net. He went on to say that this citizen’s group had given of their own time, and spent their own money to ask for documents in open records requests, to uncover the truth associated with the Tee Center parking deck. He revealed that the articles published by City Stink were all well researched and had supporting documents to accompany them. He presented to the group four such articles in the form of,”links,” for review. The CityStink.net articles he referenced were the following:

Committee members agreed to look at the articles researched and written by the,” citizen’s group“, without discussion…. The first shocking moment of the meeting!! I expected there to be some objection from General Counsel…. “Can’t believe those citizens“…..  Maybe just the name,”City Stink,” was beginning to get some respect. I began to listen closer.

Commissioner Lockett brought back up the fact that they had been told that all of the land under the parking deck would be donated.  He questioned the way in which property was acquired under the parking deck, with some being purchased by the city and other parcels remaining with Augusta Riverfront LLC. Seems that a parcel owned by State Senator Bill Jackson (The old gas station at 9th and Reynolds) had been  traded for property at 13th and Reynolds adjoining Mr. Jackson’s tile business. Why was it important to make this deal, but not with any of the rest of the parcels?  Another good question that brought Commissioner Guilfoyle, a new committee member, out of hibernation. He couldn’t understand why we all just didn’t believe Senator Jackson’s son, as he explained on the Austin Rhode’s Show, exactly what the truth was concerning this property trade, when it was uncovered by members of Augusta Today. 

Commissioner Lockett was quick to respond that all associated property could have been condemned and taken for city use. Commissioner Guilfoyle responded,”I believe this would have been a tough process.”  Touche….. In any event, the land under the tax payer funded parking deck still has a 6 million dollar lien on it. There is no disputing that fact. Also, the plan on the table is to turn the land under the deck, over to the land bank, let Augusta Riverfront LLC (Billy Morris and Paul Simon) own the bottom floor parking spaces and the tax payers get the air rights. General Counsel Andrew MacKenzieresponded with a blank stare. Not one comment from committee members either. I believe Jim Plunkett, outside Counsel  for the city called this,”Complicated.

Finally, After much discussion, Commissioner Lockett revealed the following items that he believed would be a narrow enough scope to put in an RFP to get to the bottom of all of this .  They are as follows:

Parking Decks
*Obtain and review the CORE and management agreements for the Reynolds Street Parking Deck RSPD and the Tee Center Parking decks. Identify controls deficiencies, if any, that might arise by having different agreements with potential cost-shifting exposures.


*Obtain and review lien documents filed against ARLLC or 933 Broad LLC properties situate under the RSPD and ascertain that the parcels can be transferred free of said liens to the City.


*Evaluate and determine whether City management and contracted legal counsel acted properly in allowing the RSPD to be constructed without executed agreements between the parties.


*Obtain and evaluate parking deck management Requests for Quotation covering subject parking decks, if any exist, to determine whether ARLLC or 933 Broad LLC ownership of underlying properties and subsequent ownership of ground floor parking spaces were disclosed to bidders  and whether bids were properly solicited, received, and evaluated.


*If there were alternative bids taken, determine whether the combined RSPD and Tee Center deck agreements allow costs materially in excess of those bids.


*Evaluate whether contracting out the operation of the RSPD to an operator not related to ARLLC or 933 Broad LLC would have been practical or will be be practical in the future given the relationships between the parties.


*Obtain CORE and management agreements to evaluate whether there are adequate controls in place to protect the City’s interests and finances from waste, abuse, fraud, or mismanagement by the Manager, including extensive rights of audit allowing continuous capabilities to audit these agreements.

As committee members began to cast their votes in approval of the new scope, Commissioner Guilfoyle took exception with the way the  consolidated government has operated, revisiting the  Grand Jury investigation of 1996 into city government. Recommendations were made to the  Commissioners of what needed to be done to rectify the problems that were uncovered. 

Guilfoyle commented that nothing ever happened. Commissioner Lockett countered,”Someone has put us in this predicament right now that we are in, and it is up to us to make the necessary changes when we know what is required. This is what our citizens expect, and this is what we will have to do.” 

We at Augusta Today and City Stink will continue to pay attention to all that goes on with this forensic audit and all that will go uncovered by the local media. We are getting somewhere, and it feels good!***

LD

TEE Center Special Report: No Way to Treat a “Partner”

“Howdy, partner! Can you spare a few $million?”

Thursday, June 7, 2012
Augusta, GA
By Lori Davis

Our Augusta Today and CityStink.net group had limited representation at the January 30, 2012 meeting of the City of Augusta’s Finance Committee when several commissioners roasted the City’s outside lawyer, Jim Plunkett over the Tee Center parking deck agreements with manager Augusta Riverfront LLC. However, one comment reported by WJBF’s George Eskola struck home. “We’re supposed to be in a partnership but I’ve never seen partners treated as we’ve been treated in these issues accusing people of doing things wrong we don’t operate like that,” said Paul Simon who’s company Augusta Riverfront LLC owns the Marriott.
(*See the video of the WJBF report below… article continues below)

The comment sent me looking for the partnership agreement for the Tee Center that Mr. Simon was talking about.

Here is what was found. Better said, here is what I didn’t find.

The Augusta Commission has only approved one document that might be seen as a “partnership agreement” for the Tee Center in the form of the Management Agreement Term Sheet (*click to view). It is UNSIGNED AND UNDATED, but was included in the package of documents when the Tee Center was approved by the Commission on August 21, 2007.

After the August 2007 meeting, the only later action was at the called meeting of the Board of Commissioners in early December 2009 where the Commissioners authorized the Mayor to  execute the Tee Center Construction Operating and Reciprocal Easement (CORE) Agreement in anticipation of beginning construction.

Seeing that as being the partnership agreement I submitted a Georgia Open Records Request to the Augusta Law Department for the executed agreement. They didn’t have it.

Deke Copenhaver NEVER signed a CORE agreement. It doesn’t exist.

Yes, you read that correctly. The partnership for the $50 million Tee Center and Parking Deck complex does not exist! What does exist has some really shocking provisions that I think should have Augusta demanding big money from Mr. Simon’s LLC!

What does exist is the CORE agreement on the existing Conference Center dated June 21, 1999 recorded in the records of the Clerk of the Augusta Richmond County Superior Court in Deed Book 648 on page 45. *(Click here to view the 1999 CORE Agreement for the existing conference Center)

The existing CORE agreement was not canceled or superseded by a more recent partnership deal as far as we can tell. What does this signed and executed agreement say? Page 13 has a whole bunch of wording that makes Augusta Riverfront LLC responsible for all manner of construction and maintenance cost throughout the term of the agreement (*Click here to view).

 Page 16 (*Click to view) says this: “Developer (Augusta Riverfront LLC) in operating the air conditioning and heating system for the Hotels and the Expanded Conference Center shall operate such systems in a manner which will not unduly drain heat, ventilation or air conditioning from the Improvements of any other party”

Nowhere in the unsigned, undated Term Sheet is there change in duties as they relate to HVAC or the existing conference Center. The Term Sheet even says “Augusta’s capital funds shall specifically not be used for items related to any Convention Center and/or Hotel capital cost.”

The Augusta Chronicle reported (*click here to view article)  about a controversial change order for an expensive HVAC (heating, ventilation, and air conditioning) upgrade requested by Augusta Riverfront LLC, owners of the Marriott, writing ”The changes being requested include $399,083 for upgrades to the smoke exhaust system, increasing the number of air changes at the convention center from the Georgia minimum standard of about 2.5 per hour to eight per hour, as requested by Marriott. ”

Questions

If the signed and executed CORE agreement for the Convention Center puts responsibility for HVAC operations within the hotel upon the hotel owners and the 2007 Term sheet does the same for Hotel capital costs, why hasn’t the Commission, Mayor and Fred Russell demanded that Augusta’s partners pay these costs? Where is our $399, 083?

Where is the partnership agreement? Does Fred Russell mean to tell us that they built a $50 million complex using public funds with no partnership agreement?

How can it be legal to build a publicly funded project like this on unsigned, undated documents?

Shouldn’t all Augusta be channeling Mr. Simon’s objection -“I’ve never seen partners treated as we’ve been treated ” -right back at him?***
-Lori Davis


(*Below are pdfs of some of the public documents cited in this article)
2009 CORE GORA Request – Lori Davis
1999 Core – Radisson Hotel Conference Center (1)
1999 CORE – Radisson P. 13
1999 CORE – Radisson P. 16

Breaking News! TEE Center Parking Deck Air Rights Gone With The Wind!

!!CityStink Exclusive!!

No Police Protection, Just a Liened Deck?

Originally posted on CityStink
January 26, 2012
Posted at 1:37pm
Augusta, GA
By Lori Davis
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.
Let me say right now I am not a real estate expert. I can only speak from years of owning, buying and selling homes. Every time I bought a house and financed it, there was a security deed recorded by the bank that had to be satisfied before I could sell it or at the time of the sale. My lawyers would get a cancellation of the security deed recorded so that the property liens would be ended. We all know and have been through this.I first raised my concerns about irregularities with the ownership of the land under the TEE Center and companion parking deck in an article that appeared in City Stink on January 11, 2012. See: Tee Center LLC Trap. At the time the local media paid little attention to my findings. Well, I think this new information may change that.
Why didn’t Augusta Richmond County worry about cancellation of a series of security deeds, security deed modifications, and financing statements filed against the land 933 Broad LLC owns under the Tee Center deck? Why wasn’t this done before Augusta built a $12 million structure on top of this land it doesn’t own? (please see documents at the bottom of this story)
The very simple real estate indexes at the clerk of court’s office show no cancellation of these security deed filings. Where are the cancellations?
IF there were no cancellations, and all of this paperwork is still good, hasn’t our city-county government made one of the biggest errors any of us has ever seen? Whose parking deck is it now, anyway? If the TEE Center and deck management deal is for 15 years, is the deck that landowner’s at the end of just 15 years?
IF the landowner defaults on the loans, won’t Augusta lose its prized $12 million facility to the bank? There are no filings establishing any rights whatsoever of Augusta to this land, as far as I know and what previous media reports have told us.
IF the loans are still in place, how is the interest on the loans going to count against the Tee Center profit and losses that Augusta shares in?
IF the city had not established a value of more than $2.1million an acre (based on land swap and hot dog operator buy-out costs) for Senator Jackson’s .07 acre corner, what would have claimed as the land value? The tax assessor’s value? If Augusta has to buy the land after the fact, what will it cost after this charade?
IF all the liens are there, why on earth would the commission want to rush approval of the TEE Center and deck deal before Bill Lockett and the 5 other commissioners’ forensic audit is done? Why the rush? I think we know now.
Can the other LLC, Augusta Riverfront, borrow against the parcel that it owns under the Tee Center itself? It doesn’t look like there are security deeds on it, but that side of the street is a huge complicated blizzard of paperwork. I get a headache looking at this stuff.
How did Fred Russell expect to get any rights at all without running into the deeds? I got it – we got air rights!
The people got air rights while somebody got a free $50 million facility? Over in Harrisburg bullets fill our air because Ronnie Strength’s budgets get slashed. If you think I am angry over this, you are right!
I am not a lawyer, but these are questions that demand answers and accountability.
Does anybody in Augusta’s administration have a clue?As of the writing of this story, city administrator Fred Russell has confirmed that liens still do exist on the property where the deck is located. Wonder why he never informed the commissioners about this?
Fred has to go.***Stay Tuned to WJBF News 6 tonight for George Eskola’s report on this story
Below are some of the documents supporting this article (3 seperate pdfs total)
There are more documents that will be released in due time so stay tuned.

933 Broad Plat

933 1st UCC

2010 933 UCC