Category: All

A Tax Recovery Yarn

  By , , , ,

How a multidisciplinary review of an already-negotiated sales and use tax exemption package, including analysis of equipment purchase orders and contracts, produced $millions in additional savings.

This effort required study of the technical data and vendor operating manuals, knowledge of sales tax exemptions and application in a “direct-use” state, understanding of how tax codes were input to produce tax accrual reports, and taking the initiative to appeal that which had already been established.

The Aurelius Principle to Success, Money and Power

Image

  By , ,

Looking at major projects, programs, and government regulations with a multidisciplinary approach produces astounding success that can be leveraged up to unlimited heights in a once-in-300-year socioeconomic and political upheaval.

Along came the Aurelius Principle and things might be changed forever.

Unraveling Rick Allen Before His Time

Image

  By , , ,

By: The Arrowflinger

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

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

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

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

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

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

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

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

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

Who knows, one day an Arrowflinger might call in.

TAF

Dekefeating the Tyranny of Credentials

Image

  By , , , , , ,

The
Aurelius Principle

A Multidisciplinary Approach
Works Wonders

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

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

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

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

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

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

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

Tenneco

 

Fort Sterling

 

Maryland Cup

 

Procter and Gamble

 

USG

 

Hanes Brands

 

Sara Lee

 

Con Agra

 

National Gypsum

 

Georgia Pacific

 

Lilly Tulip

 

3M

 

Sunbeam

 

McDermott

 

Johnson and Johnson

 

Fulghum Industries

 

Lowes

Medimmune

 

Home Depot

 

Corning

 

Bass Pro

 

CarMike

 

W.R. Grace

 

Eli Lilly

 

Bristol Myers Squibb

 

Intel

 

St Joseph Foods

 

Georgia Iron Works

 

Boise Cascade

 

Stone Container

 

Fort Howard

 

Weyerhauser

 

Willamette

 

Packaging Company of America

 

Temple Inland

 

Fluor

 

 Lenzing Fibers

 

 Kahn’s

 General Electric

 Hillshire Farms

 

 Fort James

 Unilin

Jacobs

 

Fulghum Fibres

 

Donahue

 
 Duke Energy  Sweetheart Products  Hoku Corporation
 BCE Outdoor  Control Plus  Arale Woods LLC

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

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

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

 

–          AG

The author was President of Cost Recovery Works, Inc., a provider of multidisciplinary contract cost avoidance, cost recovery, and public policy services to industry and government. Cost Recovery works is no longer in business, as of December 31, 2020.

Mission “Impossible” In a Slum

  By , ,

Originally posted September 18, 2013

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

Mayor Copenhaver and Commissioners:

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

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

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

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

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

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

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

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

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

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

Augusta Commission Asked to Chill Out

  By ,

by Al M. Gray

Originally posted September 8, 2013

Trane Chiller – 500 Ton Air Conditioning Unit Image included under FAIR USE for purposes of reporting and education to the public.

The Controversial Urban Redevelopment program is on the Augusta Commission Public Services Committee agenda for Monday September 9, 2013, but something else is attention-getting. It was the request to approve the addition of a chiller to the Convention/TEE Center Chiller Plant. This item might not normally draw a commissioner’s attention, since the Marriott is said to be paying for it.

Let’s not beat around the bush. There are some pretty serious questions, old and new, that this request summons forth. We will begin with the new questions and end with the old questions.

Issue One: Cost Responsibility for Additional Chiller Space and Piping

The Commission Committee Coversheet – Chiller contains this statement:

During the design of the TEE Center project, the chiller plant

was designed for future expansion. All piping stub outs and

additional space has been provided to add two additional chillers

and cooling towers.

 

Some of this space and capacity is now proposed for use in service of the Conference Center. However, the Conference Center CORE agreement, which I understand remained in place when the TEE/Convention Center was authorized, seems to place responsibility for Conference Center HVAC Equipment on Marriott owner Augusta Riverfront, LLC. Did Augusta pay for the “additional space” and the piping stub outs under the Convention/TEE Center Contract?  If so, where did the contractual responsibility shift to Augusta?

Issue Two:  Effects of Chiller Deletions on Convention/Tee Center Construction/ Mechanical Contracts

 In the Attachments_for_Central_Chiller_Plant is a letter from Morris Communications Corporate Architect Robert Kuhar dated August 19, 2013 discussing the expansion of the chiller plant. It contains this statement:

… the central plant was a part of the design very early on in the project… however due to budget constraints, it was not fully implemented. Addition space was provided for expansion of the system.

“Not fully implemented,” suggests partial implementation. How much of the design providing additional capacity and expansion to include the Marriott and Conference Center was implemented? Also, since the Convention/TEE Center project was built on a fast track basis on a partially complete design, did all of the non-Augusta Convention/TEE costs get deleted from the contractor’s and mechanical contractor’s scope of work when the earlier design was deleted? This writer has seen large overpayments occur in similar circumstances.

Issue Three:  Chiller Redundancy and Cost Responsibility

Within the attachment to the Chiller Agenda Item, appears this:

A central chiller plant cools the new Convention Center with cooling towers located on the roof. Two chillers provide 400 tons of cooling each. There is a total of 800 tons of cooling available. When fully occupied during the warmest time of the year the current Conference Center requires approximately 400 tons of cooling. There is 100% redundancy provided by the second chiller.

If this redundancy is to cover the Conference Center, shouldn’t that portion of the capital expenditure have been born by the Manager, Augusta Riverfront, LLC, if the existing Conference Center Agreement still governed?

Issue Four:  Convention versus Marriott and Conference Center Separate Metering Status

In the supporting memo from Robert Kuhar, Corporate Architect of Morris Communications, dated August 19, 2013 and with the subject line, “Centralized Cooling Concept” there is this:

…the Marriott and Conference Center could be metered by either flow meters or BTU meters to determine cost of operation between the different facilities.

 

This brings an old matter back up. You might recall that when Augusta citizen activist Lori Davis requested to see the electrical single line diagrams that will show how power is being distributed between the Conference Center, the Convention Center and the Marriott, she was rebuffed under the guise of “security.” Wasn’t there supposed to be separate metering of utilities to segregate Convention/Tee Center costs , from Marriott and Conference Center Costs? Where does this stand? Can you, the public, or this writer now see the documents and audit trail for these costs?

Issue Five:   Conference Center and old Radisson Hotel versus the 8 Air Turn Marriott Standard

On August 17, 2012, activist Lori Davis submitted a Georgia Open Records Act Request inquiring into the design of the Heating Ventilation and Air Conditioning systems for the existing Marriott/Conference Center before integration with the Convention/ TEE Center HVAC system. The response she received was a CD with empty file directories. The purpose for the inquiry was to evaluate the $399,000 change order to the smoke handling system, which was supposedly based upon a Marriott requirement for 8 air turns, instead of the 2.5 designed. Since the Conference Center and Marriott hotel date back to 1999 (at that time the first building was a Radisson), we wondered whether those older buildings themselves met the 8 air turn requirement. Our next question, had that one met a negative response, would have been to ask why the new Marriott standard would apply to the TEE/Convention Center HVAC, which doesn’t appear to feed directly into either Marriott hotel, but into the Conference Center. Also, any upgrade of the Conference Center to 8 air turns would have had to receive Augusta’s approval.

A final reason that might have brought responsibility for that $399,000 change order cost into question was that the governing Conference Center CORE agreement says this:

Section 7.2 HVAC O1perations. Insofar as certain of the Improvements of the Parties shall be internally connected through common conidors (sic) and passageways, Developer, 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.

 

Doesn’t this imply that the TEE/Convention HVAC would stand alone, with no requirement to meet the higher Marriott standard of 8 air turns? Was the $399,000 change order a necessary Augusta cost, given the authoritative documents? The Augusta Commission settled the construction contract issue by approving the change order, but did that settle the issue between the partners?

 

Issue 6: Morris Communications Employee Involvement

 

Is the involvement of a Morris Communications Executive indicative that Morris employees are the members of Convention/ TEE management firm Augusta Convention Center Management, LLC? What role does the corporate architect play in the management of these facilities?

 

Update: The Public Service Committee of the Augusta Commission voted to approve the installation of the additional chillers and related piping in its September 9, 2013 meeting. In the meeting, Paul Simon of the Augusta Marriott asserted that there is separate metering of utilities between that which Augusta pays and that which the Augusta Marriott and manager Augusta Riverfront, LLC absorbs.

Augusta’s administration continues to hold the as-built drawings that would confirm the existence and contractual correctness of the separate metering. A review of the HVAC design must be the subject of a follow-up Georgia Open Records Act request to answer the questions as to whether the HVAC system design for the Convention/TEE Center followed contractual divisions of responsibility between the Manager and the Owner, the City of Augusta.

-AG

Dear Arthur, Tipped Balls Hurt

  By , , , , , ,

Originally posted March 12, 2013

Are the Falcons underestimating the Atlanta City Council?

By Al Gray

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

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

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

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

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

On first down –

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

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

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

(Editor’s Note: Legal Summary no longer available online.)

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

Second Down –

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

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

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

 Third Down –

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

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

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

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

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

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

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

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

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

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

-AG

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

Point Blank Video: The Art of a Finely Feathered Nest?

  By , , ,

Originally posted March 7, 2013

Point Blank on agraynation.com is an irreverent point of view at events in and around the state of Georgia, including Augusta, Atlanta, and the public policy meaning of it all, to a perhaps-slightly-addled refugee of the late, great American middle class.

Today, in Point Blank, the topic for consideration is the haste with which the Georgia World Congress Center Authority and the City of Atlanta look to be pursuing a bad deal for the taxpayer.