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.***

 

Special Report: Key Conditions Must Met for Parking Agreement to Pass Today

Originally posted on CityStink
Monday, August 27, 2012
Augusta, GA

By The Outsider

Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.
The Augusta Commission will once again take up the controversial Reynolds Street Parking Deck at another special called meeting at noon today. Last Tuesday, at another special called meeting, Paul S Simon, president of Augusta Riverfront LLC, made his case for approving a parking contract between his company and the city. Representatives of Augusta Today and CityStink.net were there and challenged Mr. Simon on key points of the contract. You can see that video here–> The Day City Stink Took Over the Marble Palace.
To listen to Paul Simon talk, you’d think it was just a bunch “bloggers delaying progress,”  but perhaps Mr Simon should look in the mirror to see who has really been stalling things. The commission conditionally approved a parking management agreement back in February. As the key word suggests, this agreement was contingent on certain key conditions being met, but we found that after months had passed, Augusta Riverfront LLC had not satisfied them, including deeding the land to the city’s land bank free of all liens.
This led to commissioners wanting to renegotiate the contract, but Paul Simon and Augusta Riverfront LLC have been obstinate, refusing to agree to contract controls and rights of audit and a more equitable sharing of  profits and expenses with the city. Just this past week though, Commissioner Joe Bowles presented a plan that would give the city a more favorable share of any deck profits in exchange for adding a pedestrian skywalk over Reynolds Street to the TEE Center. This seems reasonable, and Simon has supposedly agreed to these terms.
However, the most important elements of the contract that must be included are the controls and caps on Labor Costs/Burden and materials costs and  a rights of audit. These key provisions are vital because they will close any loopholes that Augusta Riverfront LLC could exploit at the detriment of the taxpayers. In regards to the rights of audit, as President Ronald Reagan famously said, “Trust, but verify,” and we know with the history of dealing with Augusta Riverfront LLC that everything must be verified on paper. This is why the rights of audit language being added to the contract is so important.
We have listed below the provisions that need to be included in the parking management contract in order for it to be approved today. If Mr Simon agrees to all of them, then we do not see a reason why it should not proceed. Commissioners have been made aware of these key provisions and we believe that majority of them will stand firm and see to it that they are included or once again there will be no deal. The ball is Mr. Simon’s court today. He is hoping he can strong-arm commissioners into agreeing to another last-minute lopsided deal that has been neutered of the necessary controls and rights of audit. He is hoping to ram this through in another special called meeting denying government watchdogs the right to speak out.
The most important provisions that must be added to the agreement are the rights of audit and capping overhead costs. The Rights of Audit clause will allow the city of Augusta to audit ARLLC’s books to verify their compliance with the contract. Also, it is imperative that none of ARLLC’s actual overhead costs can be billed to the city. If these key provisions are included in the contract it will go a long way towards improving the city’s leverage and giving assurances that the city cannot be billed for potentially unlimited overhead costs.
We hope the commissioners will ask that these key provisions be included in the actual language of the contract and not as footnotes or parentheses. These provisions must have the force of law. If Paul S Simon will agree to include these provisions then the contract should be able to move forward; it’s up to him.
Below are the  provisions we suggest be included in the Parking Management Contract for approval:
AUDIT RIGHTS:
Manager’s “records” shall upon reasonable notice be open to inspection and subject to audit and/or reproduction during normal business working hours. Such audits may be performed by an Owner’s representative or an outside representative engaged by Owner. The Owner or its designee may conduct such audits or inspections throughout the term of this contract and for a period of three years after final payment or longer if required by law. Manager’s records as referred to in this contract shall include any and all information, materials and data of every kind and character, including without limitation, records, books, documents, subscriptions, recordings, agreements, purchase orders, leases, contracts, commitments, arrangements, notes, daily diaries, management reports, drawings, receipts, vouchers and memoranda, and any and all other agreements, sources of information and matters that may in Owner’s judgment have any bearing on or pertain to any matters, rights, duties or obligations under or covered by any Contract Document. Such records shall include (hard copy, as well as computer readable data if it can be made available), written policies and procedures; time sheets; payroll registers; payroll records; cancelled payroll checks; subcontract files and any other Manager records to the extent necessary to adequately permit evaluation and verification of Manager compliance with contract requirements,
Owner’s authorized representative or designee shall have reasonable access to the Manager’s facilities, shall be allowed to interview all current or former employees to discuss matters pertinent to the performance of this contract and shall be provided adequate and appropriate work space, in order to conduct audits in compliance with this article.
LABOR COST DEFINED:
Cost to be reimbursed will be the actual wages paid to the individuals performing the work and the actual wages will be subject to wage maximums which shall be subject to the approval of the Owner.
The Manager is authorized to station a Parking Facility Manager and parking deck cashiers to man 3 shifts,either full-time or part-time at the job site. Charges by these personnel will be authorized only when performing their job related duties at the job-site location. (If it is intended that the wages or salaries of certain personnel stationed at the Manager’s principal or other offices shall be included in the Cost of the Work, identify separately the personnel to be included and whether for all or only part of their time, and the rates at which their time will be charged to the Work.)
No Manager personnel stationed at the Manager’s home or branch offices shall be charged to the Cost of the Work unless the Owner approves such charges in advance. Overtime wages paid to salaried personnel (if approved in advance in writing by the Owner) will be reimbursed at the actual rate of overtime pay paid to the individual. No time charges for overtime hours worked on the project will be allowed if the individual is not paid for the overtime worked. Any overtime premium or shift differential expense to be incurred by Manager for hourly workers shall require Owner’s advance written approval before the incremental cost of the overtime premium or shift differential will be considered a reimbursable cost.
LABOR BURDEN DEFINED:
When computing actual costs chargeable to the Cost of the Work for payroll taxes, the Manager shall give proper consideration to the annual limitations of the wages subject to certain payroll taxes.
Cost of the Work shall include the actual net cost to the Manager for worker’s compensation insurance attributable to the wages chargeable to the Cost of the Work per this agreement. The actual net cost of worker’s compensation shall take into consideration all cost adjustments due to experience modifiers, premium discounts, policy dividends, retrospective rating plan premium adjustments, assigned risk pool rebates, etc. The Manager may charge an estimated amount for worker’s compensation insurance costs, but will make appropriate cost adjustments to actual costs within 30 days of receipt of actual cost adjustments from the insurance carrier.
Any payroll burden related costs to be reimbursed which are not required by law shall be subject to advance written approval by Owner to be considered reimbursable. The Manager shall be required to submit a detailed breakdown of all such payroll burden costs along with all representation as to how the proposed actual billable cost will be computed. Such information must be reviewed and approved in writing by Owner before Manager may include such items as reimbursable costs. All such payroll burden costs shall be billable as reimbursable costs at actual verifiable cost subject to provisional maximums agreed upon in writing in advance by both parties. Adjustments will be made no less frequently than annually to account for actual costs which may be less than the provisional maximum costs previously billed.
MATERIAL COSTS DEFINED:
Material costs shall reflect the Manager’s net actual cost for the purchase of the materials, supplies and other items. Material costs shall reflect cost reductions available to the Manager due to trade discounts, free material credits, and/or volume rebates. “Cash” discounts (i.e. prompt payment discounts of 2% or less) available on material purchased shall be credited to Owner if the Manager is provided Owner funds in time for Manager to take advantage of any such cash discounts. Price quotations from material suppliers must be itemized with unit prices for each specific item to be purchased. “Lot pricing” quotations will not be considered sufficient substantiating detail.***

 

 

The Day City Stink Took Over The Marble Palace (Video)

Originally posted on CityStink
Thursday, Augusta 23, 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.
Amid all of the hullabaloo of Tuesday’s runoff elections, something remarkable happened at The Marble Palace. Paul S Simon, president of Augusta Riverfront LLC, was on the agenda to give a presentation before the Augusta Commission about the Reynolds Street parking deck management contract in a special called meeting at 4:30pm. Representatives from CityStink.net and Augusta Today were also there including Al Gray, Lori Davis, Brad Owens and former Augusta commissioner Andy Cheek.  After Simon’s presentation, commissioners adjourned into a closed door legal session to discuss personnel matters. That’s when members of CityStink.net and Augusta Today took over the commission chambers. Al Gray went to the front of the chambers and began to address the gallery and questioning Simon about  key points in the  management contract. We have the video of that exchange below:
The speaker in the video is 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.

Commissioners Cautioned Against Approving Deck Contract Today

Originally posted on CityStink
Tuesday, August 21, 2012
Augusta, GA
From CityStink.net
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.
As we told you yesterday, a special called meeting of the Augusta Commission is scheduled today at 4:30pm to once again try to approve the Reynolds Street Parking Deck management agreement between the city and Augusta Marriott hotel owners, Augusta Riverfront LLC. A closed door legal session has also been requested by Augusta General Counsel to discuss the deck deal. Representatives from Augusta Today and CityStink.net will be in commission chambers today to observe these proceedings. Of course if commissioners vote to go into a legal session, those proceeding will be off limits to the public and the media.
Al Gray, a cost-recovery specialist and a contributor to CityStink.net ( now defunct) site, who has done extensive analysis of the deck contracts, plans to be at today’s meeting. Al Gray cautions commissioners from once again rushing into approving any last minute deal and he left the following remarks on why this contract needs to be tabled and what MUST be included for any  contract to be approved:
******
The Mayor, Administrator, and Commissioner Jerry Brigham are set to RAM THROUGH disastrous Parking Deck Management and lease agreements that, at last review, contain the following flaws.
1) The Annual plan was only a guide. The REAL AUTHORITY is the contract language defining costs that are allowed. The Annual plan is a SMOKESCREEN. They are putting out the total and utter B.S. that the Commission will have approval for overages or costs beyond the Plan, but the CONTRACT LANGUAGE WILL FORCE PAYMENT!
Like the Jefferson County Alabama deals with Wall Street that bankrupted that county, unless this agreement has been amended SUBSTANTIALLY, it is an OPEN CONDUIT of UNLIMITED Augusta Funds. The Manager can SELL THIS AGREEMENT and if the agreement allows the Manager to set its own budget, like this agreement did the last time the public saw it. An agreement that allows unlimited billings would have unlimited value! LET US SEE THE AMENDMENT THAT ELIMINATES THIS!
Then there is the matter of the LLC getting 100% of the income for 150 spaces while Augusta gets 100% of the expenses. The LLC is being compensated with a like # of spaces, but didn’t the LLC pay the COSTS of the old spaces? Taxes,  lighting, etc.?
Here are the rights of Audit I recommended that Augusta is apparently rejecting:
WHY NEEDED? TO DETERMINE THAT COSTS ARE ACTUAL COSTS traceable to the Managers records, that all discounts come back to the OWNER. The “Financial Audit” now in
there is a RUBBER STAMP snapshot at the end of the year.
INSPECTION AND AUDIT – Manager’s “records” shall upon reasonable notice be open to inspection and subject to audit and/or reproduction during normal business working hours. Such audits may be performed by an Owner’s representative or an outside representative engaged by Owner.
The Owner or its designee may conduct such audits or inspections throughout the term of this contract and for a period of three years after final payment or longer if required by law. Manager’s records as referred to in this contract shall include any and all information, materials and data of every kind and character, including without limitation, records, books, documents, subscriptions, recordings, agreements, purchase orders, leases, contracts, commitments, arrangements, notes, daily diaries, management reports, drawings, receipts, vouchers and memoranda, and any and all other agreements, sources of information and matters that may in Owner’s judgment have any bearing on or pertain to any matters, rights, duties or obligations under or covered by any Contract Document.
Such records shall include (hard copy, as well as computer readable data if it can be made available), written policies and procedures; time sheets; payroll registers; payroll records; cancelled payroll checks; subcontract files (including proposals of successful and unsuccessful bidders, bid recaps, etc.); original estimates; estimating worksheets; correspondence; change order files (including documentation covering negotiated settlements); backcharge logs and supporting documentation; invoices and related payment documentation; general ledger entries detailing cash and trade discounts earned, insurance rebates and dividends; and any other Manager records which may have a bearing on matters of interest to the Owner in connection with the Manager’s dealings with the Owner (all foregoing hereinafter referred to as “records”) to the extent necessary to adequately permit evaluation and verification of:
(a) Manager compliance with contract requirements,
(b) compliance with Owner’s business ethics policies
Contractors get away with ENORMOUS overbillings from misapplied labor burdens. I got back $millions from this source
NEED LABOR BURDEN DEFINED LIKE THIS:
Insert – When computing actual costs chargeable to the Cost of the Work for payroll taxes, the Manager shall give proper consideration to the annual limitations of the wages subject to certain payroll taxes. The Manager may accomplish this through the use of an accounting system which computes actual costs for payroll taxes when incurred up to the wage limit cut-off and allocated same to all jobs by individual based on the time worked on each job by the individual. Alternatively the Manager may use an estimated net effective payroll tax percentage to allocate payroll tax costs during the year and make appropriate adjustments at the end of the year or at the end of the project (whichever is more appropriate) to adjust the costs to actual net payroll tax cost. Using the latter approach, if 50% of the wages paid to an employee during the year were chargeable to the Cost of the Work, then only 50% of the actual annual costs of payroll taxes would be allocable to the Cost of the Work, etc.
Insert – Cost of the Work shall include the actual net cost to the Manager for worker’s compensation insurance attributable to the wages chargeable to the Cost of the Work per this agreement. The actual net cost of worker’s compensation shall take into consideration all cost adjustments due to experience modifiers, premium discounts, policy dividends, retrospective rating plan premium adjustments, assigned risk pool rebates, etc. The Manager may charge an estimated amount for worker’s compensation insurance costs, but will make appropriate cost adjustments to actual costs within 30 days of receipt of actual cost adjustments from the insurance carrier.
Insert – Any payroll burden related costs to be reimbursed which are not required by law shall be subject to advance written approval by Owner to be considered reimbursable. Fringe benefit costs typically falling into this category include but are not limited to pension, employee stock option plans, bonuses, medical and dental benefits, life and accident insurance, etc. The Manager shall be required to submit a detailed breakdown of all such payroll burden costs along with all representation as to how the proposed actual billable cost will be computed. Such information must be reviewed and approved in writing by Owner before Manager may include such items as reimbursable costs.
All such payroll burden costs shall be billable as reimbursable costs at actual verifiable cost subject to provisional maximums agreed upon in writing in advance by both parties. It should be noted that certain fringe benefit costs such as funding of pension or profit sharing funds in excess of the minimum amounts required by law may not be considered reimbursable payroll burden costs by Owner, and those fringe benefit items which are not approved in advance in writing by Owner will be considered as nonreimbursable overhead cost to be covered by the Manager’s Fee. During the job and prior to contract close-out, adjustments will be made to account for actual costs which may be less than the provisional maximum costs previously billed.**************

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

Fox 54 Swallows Deke Bait

Friday, July 20, 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.
George Eskola should be proud. In the run-up to the Augusta Commission meeting this Tuesday, there was a last-minute interjection of an accounting analysis by a party in the midst of the Tee Center Parking Decks controversy. George knew about it early. His wise years of experience said take the new gambit with a grain or two of salt.
George wrote:
But this comparison is coming from Paul Simon of Augusta Riverfront LLC the company that owns the Marriott not the city’s attorney who worked on the deal. ”
Precisely.
+100 for George.
Then there was this report by Jake Wallace of Augusta Fox affiliate WFXG.
Wallace seemed impressed by Mayor Deke Copenhaver’s cheap trick of having the city’s external auditor from the firm of Maulden Jenkins put on the agenda to give a positive report on the annual city FINANCIAL AUDIT soon after Augusta Today activist and City Stink contributor Lori Davis’ presentation in favor of a forensic audit of the Tee Center Parking Decks agreements and against approval the proposed parking deck management agreement that would have been the subject of the forensic audit. Wallace wrote –
“Mayor Deke Copenhaver agrees, saying the finance team received high praise at tonight’s meeting by an auditor for the 2011 audit, is the same team who worked the finances of the TEE Center deal.
“They applauded our finance folks for doing such a great job with fiscal management,” Copenhaver says. “That’s the same team that put this deal together. Why would they do something different on the parking deck and the TEE Center than they did with the city finances?”
Wallace totally blew it.
A city financial audit only attests that generally accepted accounting principles have been met with respect to the city’s transactions. It does not extend to the point of questioning HOW the transactions come about or whether a contract is totally stacked against the city’s interests. That is the role of a forensic audit. After a flawed deck deal is executed, a financial audit will find everything to be just wonderful versus the standard of the flawed contract. A forensic audit would derive the answers of whether there are material controls deficiencies in contract administration and would seek to identify fraud in the execution and application of the management agreement.
Deke trotted out a financial auditor and Fox obliged his clever subterfuge by equating the annual city auditor’s report about finances with one about a much more in-depth audit of only a couple of complex transactions.
For another thing, the city’s finance team has had practically nothing to do with the deck agreements, as Augusta is using outside legal counsel, bond counsel,and even has gone to the extent of excluding the Convention and Visitor’s Bureau chief, Barry White, a figure who was integral to the early Tee Center presentations to the city commission and the city executive most attuned to the contract needs to be negotiated.
Wallace did not know that, or at least, did not report it.
Fox 54 came up short and looked amateurish in rising to the bait.
We are sure that they will get better, given a few more years around Augusta politics. It truly is a world all to its own.
This writer remembers George when he was an amateur, too.***

A.G.

Cutting Through the Spin Over ParkingGate

Originally posted on CityStink
Friday July 20, 2012
Augusta, GA
By The Outsider
Al M. Gray, President of Cost Recovery Works, Inc. contributed multidisciplinary review techniques in support of this article.
Despite how some government officials and members of the local media have been trying to spin the events from this past Tuesday’s Augusta commission meeting, the citizen watchdogs who have been leading the charge for more transparency and accountability in the ParkingGate debacle won two significant victories.
Lori Davis went before the commission to appeal to the conscience of city leaders to “park” a very lop-sided management contract for the $12 million publicly financed Reynolds Street Parking deck with Augusta Riverfront LLC. As we detailed in a previous report, the lop-sided contract, that was drawn up by ARLLCs own attorneys (not those hired by the city) was riddled with loop holes and amounted to a blank check. To put it in simple terms, it was a bad deal for the taxpayers.
Earlier in the day on Tuesday we got word that there was some political maneuvering by Commissioner Jerry Brigham and Augusta Riverfront LLC President Paul S Simon, to try and ram through the contract at the last minute. This followed a finance committee workshop the previous Friday where a majority of commissioners said they were not prepared to vote in favor of the contract as it stood and wanted a thorough comparison of the deal with ARLLC and others that had been rejected by city administrator Fred Russell. City hired outside counsel Jim Plunkett was tasked by commissioners to provide that analysis. Many commissioners expected the parking deck management contract to be removed from the agenda for the July 17th commission meeting.
But surprisingly, early on Tuesday, a comparison  magically appeared just in time for the commission meeting that supposedly said the ARLLC deal was $14,000 cheaper than one Aampco Parking systems had submitted in an earlier bid. The only problem is, this comparison was drawn up by Paul S Simon and Augusta Riverfront LLC… the same folks who have been trying to get the lucrative parking deck management contract… hardly an unbiased source. Why didn’t Augusta’s hired outside counsel Jim Plunkett put together the comparison as he was tasked to do by commissioners at the Finance Committee work session the previous Friday? Paul Simon and Jerry Brigham probably thought they could catch commissioners off-guard like they did on February 7th, when a tentative management agreement was passed with similar last-minute political maneuvering. George Eskola, senior government reporter for WJBF news pointed out the obvious conflict of interest in Augusta Riverfront LLC providing their own comparison in his 5pm report on July 27th,  “But this comparison is coming from Paul Simon of Augusta Riverfront LLC the company that owns the Marriott not the city’s attorney who worked on the deal ”
But this time things would not go in Paul Simon’s favor. The contract was tabled for the second time in a month after Commissioner Jerry Brigham announced that he did not have the votes lined up to pass it. So now it will go back to the drawing board… where hopefully the taxpayers can finally get a more favorable deal, one with caps on what ARLLC can bill the city  and minus all of the loopholes that gave Paul Simon practically a blank check courtesy of the city of Augusta. This is what we have been asking for months…. to halt this hideously bad contract from being approved, and  to get a better deal for the taxpayers. The results from Tuesdays commission meeting now provide that opportunity.
But to listen to some in the local media, particularly a struggling weekly print tabloid, the results from Tuesday were somehow a rebuke of Lori Davis and a defeat for the citizen watchdogs at Augusta Today and CityStink.net. We have to wonder… what meeting did they attend? As we said, Paul S Simon and Augusta Riverfront LLC were unsuccessful in their last minute efforts to ram through a lop-sided management contract for the parking deck. Lori Davis, the citizen watchdogs, and the taxpayers of Augusta won that day.
Some in the media wanted to focus all of their attention on the vote to halt progress on the forensic audit looking into the questionable deals associated with the parking deck. Though certainly the circumstances and  the evidence uncovered thus far warrant a full forensic audit, it has hardly been the primary goal for the citizen watchdogs like Lori Davis who have been investigating this matter since October of last year. The main goal has always  been to make sure that the taxpayers get a better deal and a better return for its $12 million investment in the deck. This also means assuring that the city gets control of the land free and clear of all bank liens. The results from Tuesday’s meeting were a step in that direction.
The story that some in the media have been completely missing over the forensic audit is the hypocrisy of its most vocal opponents on the commission who have been complaining it is just a waste of taxpayer money, all the while these same people are more than eager to sign over a blank check to Paul Simon and Augusta Riverfront LLC in a series of bad deals that would pay for many forensic audits.
However, something rather stunning happened at Tuesday’s meeting that also seemed to go unnoticed by some in the Augusta media, particularly the folks at that struggling weekly print tabloid. In lieu of proceeding with the forensic audit, commissioner Joe Jackson made a substitute motion to forward this whole debacle over to the District Attorney and the GBI. That motion passed with an overwhelming majority. Wow. Whatever Jackson’s motivation, he is on to something here.  We have been having to go through a cumbersome and expensive process of initiating numerous government open records requests to uncover the evidence in ParkingGate.  Jackson’s move could now give government watchdogs and investigators unfettered access to the volumes of government documents that exist on these deals. Again, this is yet another win for the citizen watchdogs and taxpayers.
Commissioner Jackson also suggested that perhaps we should “open Pandora’s box” and look into the deals associated with the Laney-Walker redevelopment project. We could not agree more, and we have also been at the forefront of that investigation, initiating numerous open records requests that have revealed more waste of tax-payer dollars and possible fraud in that massive project.
These are all quite major revelations in this story, and a bit of a vindication for government watchdogs like Davis, but the narrative the folks over at that struggling weekly print tabloid have been attempting to pursue is one of ridiculing Davis over the childish behavior and disrespect shown by some  government officialsl. In particular, the writer at the tabloid mentions an incident at the Finance committee work session last Friday where Paul S Simon tried to belittle Lori Davis and us here at CityStink.net for our investigative reports into the parking deck debacle.  Simon called us the “bad press.” Well, we will gladly wear that title as a badge of honor coming from Simon.
We of course wouldn’t expect him to rave about our reporting, as we have pretty much thrown a wrench into his grand p
lans to get a lop-sided management contract for not just the parking deck but also the even more lucrative TEE Center. Mr Simon probably never expected anyone to question these deals, better yet dig deep into them with open records requests.They have become accustomed to a largely complacent local media, like the folks at the struggling weekly print tabloid, who find these matters just “too complex” to pursue. This has allowed Simon and the folks at Augusta Riverfront LLC near free reign in Augusta to get pretty much whatever they want courtesy of the taxpayers. This lead to them becoming complacent and feeling emboldened, and always looking for more. They never saw us coming.
The folks over at that struggling weekly print tabloid thought it was funny that some Augusta commissioners snickered when Paul S Simon admonished Lori Davis and us here at CityStink.net for an article we did a couple of weeks ago that showed how the management contract under consideration with Simon’s company was riddled with loopholes that had Augusta on the hook for maintenence and equipment costs  for the entire 640 space parking deck, when Simon’s company would still own and control the entire ground floor.We rightly pointed out this did not appear to be a fair deal for the city. But Simon took to the podium last Friday to complain,
You see all this stuff on these blogs that’s just wrong…they had me on a little street sweeper.” This prompted giggles from some commissioners in a scene that the weekly tabloid described as a “bunch of fraternity brothers” and according to the tabloid, this surely must have been embarrassing for that pesky Davis woman.
Notwithstanding the not-so-subtle undertones of sexism in all of this, the point that was also completely missed by the weekly tabloid is that amid all of these snickers from the good-ole-boys club, no statesman emerged to call Mr. Simon out, instead they fell over themselves to kiss his ring. Here was a man coming before them acting as though his company was doing Augusta a huge favor by allowing the city to use the Marriott brand on the $12 million parking deck the taxpayers had paid to build on his land. Simon’s company not only got a wonderful $12 million new parking deck courtesy of the taxpayers, but also a $38 million gift in a brand new convention center attached to his hotel, giving his company exclusive use of the facility. And we pay him hundreds of thousands of dollars a year for this honor. And now he was coming before the commissioners pretty much demanding that they sign off on a hideously lop-sided management contract that added more insult to injury. Talk about looking a gift horse in the mouth!
And Lori Davis should be made to feel humiliated in all of this? If anyone should feel humiliated, it’s the city leaders who have allowed themselves to be taken for such a ride. You build a $12 million parking deck on land you don’t even own, and even worse it has over $7 million worth of bank liens on it. You build a $38 million convention center without an executed CORE agreement and also on a parcel of land still owned by Paul Simon’s company. Maybe the snickers should have been directed at themselves. Surely, Paul Simon was probably saying “you suckers” under his breath.
But at the end of the week a majority of commissioners saw the bad deal for what it was and put a halt to it. Good for them. Commissioners Wayne Guilfoyle, Bill Lockett and Mayor pro-tem Joe Bowles have shown particularly outstanding leadership on this matter and should be applauded by the taxpayers. Sure, the buildings cannot be unbuilt now, but commissioners can now see to it that the taxpayers get the best return on their investment, and that has always been our primary goal from the beginning. People like Lori Davis should feel proud and the taxpayers of Augusta should thank her for her courage and perseverance in this ordeal.
And despite the ridicule from the folks at that struggling weekly print tabloid, there have been others in the local Augusta media who have provided commendable coverage of this story. Particular accolades go out to George Eskola of WJBF, Chris Thomas of WRDW, Renee DeMedicis and Doug at WNRR 1380 AM, Ben Hasan’s Urban Pro Weekly, The Metro Courier, Austin Rhodes and Scott Hudson at WGAC.
A free press is an integral part of any democracy, holding our government accountable to the people. The role of a free press is to cut past the spin and propaganda to get at the truth. This is a duty that some in the Augusta media obviously still believe in. Some though, like the folks at that struggling weekly print tabloid, seem to think it is more important to ridicule those of us who still believe in that principle. As they belittle the government watchdogs who have been breaking the big news stories over the past 8 months, perhaps it is out of frustration, as they see the writing on the wall and their role in Augusta’s media world slipping rapidly into irrelevancy. Oh and by the way, we can handle the ridicule. If we are making this many people angry in Augusta’s establishment, then we must be doing something right.***

OS

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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