Category: Augusta Politics

Augusta Being ‘Swept’ for $67,260?

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Mr. Simon, Backcharge your Attorney $67,260 

Friday, July 6, 2012
Augusta, GA
By Kurt Huttar
Mr. Paul Simon of Augusta Riverfront, LLC dutifully submitted a 2012 Operating Budget and Capital Budget to the City of Augusta early in the year, as required by the proposed Reynolds Street Parking Deck Management agreement. Included was the cost of a parking deck sweeper.

Houston, we have a problem. You see, the proposed management agreement only allows capital expenditures under pretty limited circumstances. It reads like this – “Capital Improvements” (Capital expenditures) shall mean one or more items or project(s) – i) the cost of each of which totals $5,000.00 or more, ii) that becomes part of the RSPD, and iii) the cost of which is required or allowed to be capitalized under the accounting guidelines of Augusta, Georgia and GAAP.

Since the sweeper is a piece of mobile equipment, it cannot be “part of the RSPD,” can it?

Hopefully, Augusta Riverfront, LLC has not purchased this sweeper under its interim agreement, because if it has, some citizen might demand Augusta’s money back from this purchase, as it is not allowed.

Since taxes and freight of 14% were added to the $59,000 estimated cost, the total would be $67,260.

Since Augusta Riverfront lawyers missed this point, shouldn’t Mr. Simon bill them for this cost?

For another thing, won’t this sweeper be used over in the TEE Center Parking Deck, where Augusta Riverfront is leasing the parking deck? Doesn’t it create an accounting conflict to have 100% of the cost of the sweeper born by the Reynolds Street Parking Deck, which is totally funded by city taxpayers, instead of the TEE Center Deck?

Here is one analyst who wants answers.***

K.H.

RSPD Capital Equipment List

Commission Tables Parking Deck Management Contract

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June 29, 2012
Augusta, GA
By The Outsider


Augusta Commissioners wisely tabled the latest management proposal between the city and Augusta Riverfront, LLC for the $12 million taxpayer financed Reynolds Street Parking Deck at yesterday’s commission meeting. The nearly 100 pages of legal documents were dropped in commissioners’ laps at the last minute as they were coming back from a Georgia Municipal Conference in Savannah. Several commissioners said they needed much more time to review the documents before voting on them. At yesterday’s meeting, Commissioner Jerry Brigham made a motion to send the documents back to a Finance Committee work session for review. His motion was seconded and easily approved.

Lori Davis, a contributor to CityStink.net, had tried to get on yesterday’s meeting agenda to speak in opposition after learning last Friday that the parking deck contract would be up for approval; however, by that time the agenda had been conveniently closed out. Davis was at yesterday’s meeting nonetheless as a citizen observer. The citizen activists from Augusta Today, like Lori Davis, must consider yesterday’s vote as a delayed victory. Mrs. Davis and Al Gray urged commissioners to reject a similar agreement back on February 7th, but Commissioners went ahead and tentatively approved the parking management agreement with the proviso that the $7 million worth of liens would be released on the property that the deck sits on and the land would be transferred to the city’s Land Bank.

But our investigations revealed that has still not happened. The liens had not been removed and 933 Broad Investment, LLC (a sister company of Augusta Riverfront, LLC) had not transferred the land as promised… yet again. Commissioner Joe Bowles was particularly upset with these new revelations having these stern words for Augusta Riverfront, LLC in an interview with Chris Thomas of WRDW: “If they don’t go ahead and get this straightened out,” Bowles said, “I say it’s time to go ahead and bid the parking deck back out. If we don’t hurry up and get that property donated to the land bank, I would say it’s time to scrap the deal and start over.“

After Bowles’ remarks, Augusta Riverfront, LLC , their lawyers from Hull Barrett, and city administrator Fred Russell went into damage control mode. The lawyers quickly cobbled together nearly 100 pages of documents for a new management contract for the parking decks, and said that there was an agreement in place with Wells Fargo to release the liens. However, upon closer inspection, Wells Fargo was actually only agreeing to a partial release of the liens, maintaining a security interest in the $12 million taxpayer financed parking deck. What that means is that if 933 Broad Investment, LLC defaulted on their $7 million loan, Wells Fargo would become the operator of the deck, and would get all of the revenue from the 160 ground floor spaces.

Also, when we put the latest management agreement under the microscope, we found that the terms amounted to a blank check for Augusta Riverfront, LLC with no accounting controls and a nearly unlimited revenue stream to ARLLC courtesy of Augusta taxpayers. To put it in the simplest terms: It was a BAD Deal! But it should have been no surprise that this deal was so lopsided in favor of Augusta Riverfront, LLC, since it was crafted by their own attorneys from Hull Barrett. Where was city attorney Andrew Mckenzie and city-hired outside counsel Jim Plunkett in all of this looking out for the interests of the taxpayers? Why would a management agreement totally crafted by the attorneys for the other parties even be placed on the commission agenda by city administrator Fred Russell? And why was this all done in such haste giving commissioners little time to review the volumes of documents and denying the opportunity for citizens to speak out in opposition?

Cost Recovery Accounting Specialist Al Gray, who is also a contributor to CityStink.net, developed a matrix comparing the latest contract proposal with Augusta Riverfront, LLC with one that Ampco Parking Systems out of Houston, TX had agreed to earlier. You can view that matrix here–> Why is the Parking Deck Contract this Rigged? There was no comparison! The Ampco agreement was far superior to the one being submitted by Augusta Riverfront, LLC. So why did Fred Russell ignore this better deal and go for the one giving a “blank check” to Augusta Riverfront, LLC?

Augusta Commissioners deserve accolades for putting the brakes on this very bad management deal and sending it back to committee. Particularly we would like to recognize Commissioners Bill Lockett, Joe Bowles and Wayne Guilfoyle for showing leadership on this issue and providing assistance in our investigations.

How to Proceed
So  what happens next? Well obviously this bad contract should NOT be approved. This is not something that just needs a few tweaks… it needs a MAJOR overhaul. Here are 3 recommendations for Augusta Commissioners on how to proceed in regard to the management of the parking decks:

1. Let ARLLC keep running the decks temporarily as they have since October 2011 with the proviso that EVERYTHING is subject to audit and use the time to cure the issues with the TEE and Decks… or

2. Use the Ampco deal as a template and swap out the deck agreements. Put in strong audit rights. Get all capital purchases to be made by Augusta.

3. *Condemn the land under the decks because Augusta needs to get out from under paying 23% of the costs, then rebid the deck management out.

 
Related Stories:

Special Report: Why is the Parking Deck Contract this Rigged?

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Wednesday, June 27, 2012
Augusta, GA
By Al Gray

Rule Number One in contracting, whether you are the Owner or the Contractor is this: Never, ever sign a contract drafted by the other side, as is.

Why on Earth is the Augusta Commission poised this week to ratify the Reynolds Street Parking Deck Contract when in the upper, right hand corner we find this notation?

Hull Barrett 5/16/12

Version 14

I thought Andrew McKenzie was the City Attorney and Jim Plunkett was serving as Special Counsel for the parking deck and Tee Center deals. Hull Barrett is the attorney for the other side to the RSPD contract, Augusta Riverfront, LLC (I will abbreviate this as ARFLLC in the article). So why is Augusta going to execute their contract?
Being in the asset protection business, I asked Augusta Today and CityStink.net Contributor, Al Gray, a semi-retired Cost Recovery Accounting specialist, to compare Hull Barrett’s contract with the one that the City suggested in its Parking Deck Management RFP as Appendix F . This contract was the one that Ampco Parking Systems tentatively agreed to on its way to becoming the Augusta-recommended parking deck manager, before being jilted by Fred Russell in favor of ARFLLC. The draft contract borrowed a lot of its language from the contract between Augusta and Republic Parking, management firm for the existing Conference Center Parking Deck before the TEE Center.
In this article I am going to dispense with triviality and call the RFP contract “the Ampco contract” because Ampco accepted it without significant reservations.

I wanted to see if the deal Augusta got was as good as the Ampco one Fred rejected. My unpaid consultant balked, saying he had done enough free work and there were powers given to ARFLLC that on their face meant this deal was a “blank check.” Others in our group chimed in and twisted his arm into doing a matrix comparing these contracts. You can view that matrix below.

Deck Contract Matrix 2

The RSPD contract is indeed a blank check. Listen to this:
“Manager shall have discretion and control, free from interference, interruption or disturbance, in all matters relating to management and operation of the RSPD, including, without limitation… and, in general, all activities necessary for operation of the RSPD.”
I was shocked to learn that.

It gets worse. ARFLLC gets appointment as Augusta’s agent, with powers that the Ampco contract denied it. It gives the ARFLLC Manager the right to purchase capital equipment and make capital expenditures, creating risk that Augusta will have unrecorded assets.

The majority of costs under the Deck management agreement is labor and fringe benefits. ARFLLC sets salaries, can assign folks with heavy vested benefits, can assign its own agents as RSPD employees, bill “shared” employees, assign Officers of their company at will, and even pay bonuses for Augusta to fund. The Ampco contract allows almost none of this stuff.

Ampco could have done nothing beyond the limits of the Annual Plan. If it exceeded the costs in the Plan, it would be denied payment. Only the exact same sorts of costs could be billed as were identified in the Plan. The ARFLLC contract that Fred proposes says the Plan is only a goal and gives ARFLLC full authority to exceed the Plan and incur costs to be passed to Augusta not in the Plan.

Ampco was only going to get 2 months to reverse its prepaid operating expenses to Augusta. With ARFLLC, the requirement is 90 days, the balance has to be maintained, and Augusta funds it without limit. (Normally the Plan would be a limit.)

Accounting controls are pathetic, too. Ampco would have had to deposit parking fees by the next business day into Augusta’s account. ARFLLC has no such requirement, with the contract actually looking like it lets that manager hold back funds! If the balance in the RSPD operating account at the end of a quarter dictates Augusta’s need to replenish the account, can’t this defect allow the Manager to withhold revenues then, thereby making Augusta pay up more money? ARFLLC gets to set up an account in Augusta’s name that it controls! It can even directly transfer its fee out of the account. The parking management RFP contract did not allow that.

The Parking Deck RFP that Augusta put out was adamant about having a policy and procedure manual. The ARFLLC  deal does not require any manual at all!

Insurance premiums were going to come out of Ampco’s fee. With this Hull Barrett contract liability insurance is billed to Augusta! Not only that, Ampco would have been required to furnish a $75,000 fidelity bond at its own costs that ARFLLC is allowed to welch on.

I thought the really terrible thing about audit rights and records kept is that most of the costs are in the RSPD payroll and there is a statement in there that the manager doesn’t have to make records available for its other operations – with the RSPD payroll looking to be part of those other operations. Get this – this Hull Barrett contract lets ARFLLC assign folks with high salaries to the RSPD and never show Augusta the actual payroll records!

ARFLLC even gets benefit of 23% of the costs, at nearly $45,000 a year, associated with its 150 parking spaces. The Hull Barrett contract says these are “incidental costs.”  Now this contract says that the “incidental” costs cannot be material to Augusta. I think $238,000 and 23% pretty material, don’t you?

The benefits of the Hull Barrett contract are more numerous than I can get to. ARFLLC can assign the contract without Augusta terminating it. Ampco couldn’t. It can set rates. Ampco couldn’t. ARFLLC can pay itself with Augusta supplying an unlimited funding stream. Ampco couldn’t.

I’ve got the picture. It is one of Augusta caught in a matrix of incompetence, no accounting controls, and powers given to folks outside of government with what looks to be an unlimited revenue stream courtesy of Augusta taxpayers. Thanks a lot, Fred.***

AG

* View the full Parking Deck Management Deal constructed by Hull Barrett below:

Reynolds Street Parking Deck Management Agreement (00412263-14) (2)

Behind Closed Doors, An Attitude Adjustment

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A Frank Audit

Tuesday, June 26, 2012

Augusta, GA

By Al Gray

Auditors have hang ups. Everything has to go through several drafts so one does not ruffle feathers or bruise egos. After an audit report is finally issued, the horse has escaped the barn. By the time a response is expected, the horse has gotten hungry and come back or he has wandered into a glue factory.

When the universe of the audit is a major capital spending project involving major construction, decision making hasn’t the luxury of 30 or 60 day response times. Delaying a week can have six figure consequences.

In 1983 we were constructing a soap plant addition in Augusta. Our writer was the project auditor. In conjunction with project management a very simple, audit reporting form was developed and implemented for specific transactions. Everyone on the construction team was expected to answer within 5 days, pledging action in most instances. Bigger reviews went through a more formal process, but foot dragging was not allowed there, either.

The process worked so well, that it was taken down the road to the mega $1 billion tissue mill that Fort Howard Corporation decided to plop down in a swampy tract in Effingham County. Trouble reared its head, because the nucleus of the management team had just finished a paper machine addition at Muskogee, Oklahoma. They had gotten into some habits that didn’t include pushy auditors, much less one with a whole staff.

Begrudgingly they all came around.

There was one holdout – Frank Buck, the construction manager. Frank was a big boned former carpenter who had worked his way up to a lofty position from getting results. Frank balked at responding to the few reports that came his way. He even balled one up and threw it at this auditor, snarling “I don’t DO paperwork!” Eventually Frank came around a little.

It was just a little, though. Frank’s favorite description of an auditor was, “One who comes in after the battle is over and bayonets the wounded.”

One day in the later years of the project, some dust got under my contact lens inside the office building. I ran into the men’s room to a mirror over a lavatory to pop the burning contact out and wash it. Having accomplished that, I turned to leave.

I had not noticed, but the far stall door was closed. When I turned to leave, this sort of small, embarrassed voice said “Al Gray, is that you?”

It was Frank.

Turning to face the stall door, I responded, “Yes, Frank it’s me.”

He said “Can you believe I walked in here and sat down and there ain’t one scrap of toilet paper? Can you hand me some?”

“But Frank you don’t DO paperwork!”

That sure was a flimsy door.

Frank’s missing paperwork was my best ever audit report.

Frankly, that was my best audit retort.***

A.G.

Special Report: Hotel Transportation Tax Heist?

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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 September 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 transferred because the parcel that the Manager and TEE Center Partner, Augusta Riverfront, LLC 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 m

Ord 7083 to Amend the Arc Code by Adding Subparagraph (a) to Paragraph 111 (1)

Tee Land Acquisition

Signs of Desperation for the Tax Hikers

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Money No Object to Ram T-SPLOST Down the People’s Throats
 
Originally posted on CityStink
Saturday, June 23, 2012
Appling, Georgia
Hwy221

The author, Al M. Gray, was 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. Cost Recovery Works is no longer in business, as of December 31, 2020.

From the $8 million Lobbyist Shill Group ConnectGA2012, birthed to pitch the Transportation ‘Investment’ Act, to the various tax-loving Chambers of Commerce cheerleaders, the “New Jobs!” cries from Helen to Hahira sound like some obsessive mantra, the people of Georgia have never seen a slicker effort to separate them from their money than from these TSPLOST salesmen.

With a little effort, salesman-in-thief Nathan Deal almost begins to look like Eustace Haney from Green Acres (go watch the old bit with Mr. Haney’s Airplane Service, from Economy Flight to Washington, Season 4 Episode 19). When old Nathan came back from Congress, pursued by an ethics investigation, yet elected in a landslide over Roy Barnes, he was encouraged to think that Georgians are all rubes like Sam Drucker and Oliver Wendell Douglas.

If we buy off on his TSPLOST scam, well maybe we are past all hope.

Take a gander at what folks headed west on Washington Road (Highway 104) have been treated to starting this week. Scarcely 100 yards apart, with no visible ROAD WORK between, are two signs like this, one on each side of the road.

 

For what purpose are they there?

Based upon the positioning of these signs and the obvious lack of road improvements around, our sales tax dollars are only at work buying loudly colored signs pitching more sales taxes.

These people are shameless in their manipulative hijinks aren’t they?

The sure sign that we see is very clear – COLUMBIA COUNTY HAS MORE SALES TAX MONEY THAN IT NEEDS!

TSPLOST? Let’s make that into the bug-on-a-windshield thing it sounds like.

Just say NO! to TSPLOST!***

Related Story:

Al Gray Warns Rural County Leaders About ‘Shameful’ TSPLOST

Al Gray Warns Rural County Leaders About ‘Shameful’ TSPLOST

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Originally posted on CityStink
Friday, June 22, 2012
Lincolnton, GA
By Al Gray

The author, Al M. Gray, was 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. Cost Recovery Works is no longer in business, as of December 31, 2020.


Below is a presentation by tax activist Al Gray before the Lincoln County Commission on June 14, 2012, warning county leaders about the “shameful” TSPLOST and its disastrous effects on the region, especially small rural counties like Lincoln, which can be easily outvoted and forced into this abominable regional government with little to no representation.

*Click Video to play (Fast forward to the 1:20 min mark for Mr Gray’s remarks)*

*Below is the text of Al Gray’s remarks to the Lincoln County Commission concerning TSPLOST* (Graphs and charts referenced in the video are included below)

Chairman Johnson and Gentlemen of the Commission, thank you for allowing me to speak tonight. I have come to sound a warning about the proposed new 1% Transportation sales tax that comes before voters July 31st. Frankly, in all the years following public policy I have never seen anything this shameful.

The greater shame is on this county’s legislators – Bill Jackson, Lee Anderson, and Tom McCall for springing forth such an assault upon the people of this county. The bill that gave rise to this abomination was called the Transportation Investment Act. This bill set up a regional transportation roundtable for 13 counties, including Lincoln County. While it is true all had input, the law set up an executive committee of 5 to have the final vote for the 13 counties. They set it up so that Lincoln County is forced to be in this whole new level of regional government, whether we vote to pass or fail, so that our votes are diminished.

This is taxation without representation. Worst of all they committed EXTORTION against us all, by denying state funds if we say, “No!” Beyond this, this is a 14.2% tax increase that they swore to never vote for. Nor were any options even offered, like dedicating the 1% to our county.

Yes, the shame is upon them and tonight I come to ask you to stop embracing this nonsense lest you bring greater shame on yourselves and the Chamber of Commerce, a group that risks its reputation by hawking this tax.

Politicians and Chamber Representatives have been going around the CSRA saying this tax will raise $841 million under a base case. This is a LIE and the Promoters’ own data shows that. Here is a chart showing the base case. It is built on wild income growth numbers – 8% next year – that are a fantasy. The real numbers knock holes in these projections!

Will we get only $650 million? Sales tax revenues are WAYYYYYYY down as the blue charts show over the last 5 years. Can we pretend our way back to prosperity?

Gentlemen YOU HAVE BEEN HOODWINKED!!!!!!! What these real revenue numbers show is that area wide, revenues will probably only cover $500 million to $540 million of the investment list projects! This will mean that the ones in the last years of this deal won’t be funded. Incredibly $6.6 million of the $7.7 million of Lincoln’s projects are to be built in these final years.

 Source: Constrained List Spreadsheet from CSRA Regional Commission

The numbers say these projects will lack funding. You have been deceived and now are being asked to foist this deception upon the people of Lincoln County.

Beyond that, this is a terrible 14.2% increase in the sales tax. Frugal folks just cannot stand such an increase in any cost, for a 14.2% increase doubles living costs in 5 years. For this? This comes on top of a 23% sewer rate increase and several double-digit school tax increases. Look around! Who can afford that?

These deceivers have managed you get some of you excited over Lincoln County getting $722,000 a year in new discretionary funds. Well, based upon the data above this looks to be far less. This money is only coming to us because this scam makes Richmond and Columbia counties give up $7 million to bribe us into this wicked partnership with them. How is that right? A 1% new tax dedicated to Lincoln County would raise more revenue. Why are you excited about the same money or less with strings attached? Why are you willing to destroy your credibility for this?

Gov. Sonny Perdue said that DOT committed ENRON ACCOUNTING when it lost control of highway funds 4 years ago. Now they are all excited about getting their hands on this money. They want us to bail them out.

Mark Twain once said there were three kinds of lies….Lies….Damned lies and statistics……..now we can add a fourth lie – TSPLOST.

My warning is this: Don’t go forth using these phony numbers after tonight. You know better and the people now know better.

Just vote no on TSPLOST. It is the only honorable thing to do.

A.G.

Join the Anti-TSPLOST movement on Facebook here–>  Vote NO to TSPLOST

Special Report: A TEE Total Mess!

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Making a Hash over $1.3 Million Kitchen Equipment

Originally posted on CityStink
Thursday, June 21, 2012
Augusta, GA
By Al Gray

The author, Al M. Gray, was 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. Cost Recovery Works is no longer in business, as of December 31, 2020.

In the waning weeks of Winter 2012, Augusta Today contributor Lori Davis submitted an exploratory, wide ranging Georgia Open Records Act Request.

for the City of Augusta’s payments under major contracts. The documents response was massive. Deep in the supporting subcontractor billings to the R.W. Allen, LLC contract for the TEE Center was a most intriguing invoice from Norvell Fixture and Equipment Company showing that $199,656.00 of kitchen equipment as work completed and an additional $76,289.25 worth was stored, for a total billed and paid of $275,845.32! (less 10% retainage). The contract total for kitchen equipment is a surprising $1,329,418.00.

Why was this invoice noteworthy? There was no detailed partnership agreement executed between the City and its TEE Center Partner and Manager, Augusta Riverfront, LLC going into the contracts for construction, leaving the last word on the partnership being the unsigned, undated August 2007 Term Sheet. Repeated references to kitchen equipment are pretty clear that such equipment are the responsibility of the LLC, including this: “Augusta’s Capital Funds shall specifically not be used for items related to Kitchen Equipment, Laundry Equipment, and any Convention Center or Hotel Capital Cost.” Similar language making the LLC responsible for Kitchen Equipment remain within the executed 1999 Core Agreement of record in the Offices of the Clerk of Augusta Richmond County Superior Court.

No Augusta Funds are to be used to procure kitchen equipment, when $1.3 million of it is under contract?

During negotiations that have not yet produced a signed partnership agreement there was certainly a commitment for Augusta to construct new kitchen space within the TEE Center and relocate the combined kitchen from the existing Convention Center. That had no impact upon equipment ownership. Real property improvements and tangible personal property, such as equipment, are different.

In order to advance the investigation, Augusta Today member Dean Klopotic submitted a follow-up GORA request seeking the most recent R.W. Allen LLC billings under the Tee Center Contract. The City responded with Progress Billing Number 24, covering costs through March 24, 2012, including Kitchen Equipment Invoice Number 6, through March 20, 2012.

The details show $792,984.52 equipment work completed, materials stored of $162,544.34 and a total billed of $955,528.86, less 10% retainage. The R.W. Allen monthly invoice shows no additional kitchen equipment stored. Both Construction Manager and Subcontractor show most of the kitchen equipment as work completed.

At 11:00 AM on Thursday, June 7, Barry White of the Convention and Visitors Bureau conducted a TEE Center tour, which was attended by Ms. Davis and this writer. Project Manager Jacques Ware of Program Management firm Heery International would not permit the use of a video camera, suggesting that we come back for the Media Tour to be held Thursday June 14.

When the entourage reached the second floor of the TEE Center, the empty space was pointed out where the kitchen is to be located. At that juncture, an inquiry was made about the kitchen equipment invoiced back in December. Mr. Ware said that he didn’t authorize payment for a kitchen equipment invoice, asking what kind of equipment was on it. This writer responded, “A number of tilting kettles and ranges,” then pondering out loud if they might be stored. Mr. Ware said the only kitchen equipment there would have to have been, “for the Marriott.” (The Marriott is owned and operated by Augusta Riverfront, LLC.)

An email request to Mr. Barry White to be included in the Media Tour on the 14th received no response. Other attempts were made to get a separate tour along with one or a group of commissioners to investigate the matter. Commissioner Joe Jackson had just returned from vacation and could not schedule a tour in the next week. Commissioner Bill Lockett managed to get the Heery project liaison to get permission to join another June 14 tour, only to see it canceled after several hours.

Commissioner Wayne Guilfoyle was provided with a copy of Kitchen Equipment Invoice on the morning of June 20, whereupon he sought explanation of where the kitchen equipment is from Program Manager Heery International, receiving assurance that the materials were, “either stored or installed.”

It is fairly common practice to bill stored materials. There is clear language on billing documents that they are, “Materials Stored on Job Site (Invoices if Required).”

Where does the situation stand? What are the issues?

Issues and Questions

  • Where is the equipment that Augusta paid for?

  • Has Augusta Riverfront, LLC been relieved of its responsibility for the purchase of kitchen equipment? If so, where? If not, is Augusta being reimbursed for the $1.3 million cost?

  • If the Kitchen Equipment was delivered and used in Conference Center operations and events ($955,528.86 having been delivered, installed or stored prior to the Masters upswing in events) where is the accounting for the revenues?

  • Without an Effective Date having been established for the successor catering agreement, where does accountability lie, especially since Augusta Riverfront, LLC’s Paul Simon having declared the TEE and Conference Center merged months ago?

  • Why do both the R.W. Allen and Norvell Fixture and Equipment Company invoicing show the equipment as “Work Completed” if the equipment is “Stored?”

  • Should Augusta have paid for nearly a $million of equipment months before it is installed in the new kitchen?

  • Why does the invoicing include future charges for repairing Augusta Riverfront, LLC equipment? Whose equipment will it be after Augusta repairs it?

———–

Commissioners Joe Bowles, Joe Jackson, Wayne Guilfoyle, and Bill Lockett have provided Augusta Today and CityStink.net with substantial cooperation in this investigation and report. The public can feel confident that these gentlemen will pursue this matter to a conclusion.

Several of them need to participate in a tour and inspection of the paid-for kitchen equipment. Perhaps the city’s internal auditor can vouch for the accountability of the equipment, including verification of delivery documents to a storage facility before the dates that the invoicing was submitted.

It is hoped that all will aggressively protect the interests of the citizens of Augusta and seek wise counsel as they deal with the aftermath of the total mess that the TEE Center currently represents.*** Stay tuned, more to come.

A.G.

15 Reasons to Detest TSPLOST and Punish its Promoters

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TSPLOST creates 12 new “regional” governments

Originally posted by CityStink
Tuesday, June 12, 2012
Augusta, GA
By Al Gray

The author, Al M. Gray, was 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. Cost Recovery Works is no longer in business, as of December 31, 2020.

*Please see a video presentation by Al Gray warning county leaders about the perils of TSPLOST—>Here

The Transportation Investment Act of 2010 (also referred to even in the legislation as the ‘Transportation Investment Act’) is being called TSPLOST all over Georgia. The legislation establishes a new 1% sales tax supposedly dedicated to regional transportation.

Our region is the Central Savannah River Region, consisting of populous Richmond and Columbia counties, along with 11 rural counties. The tax covers a 10 year period. The funds are totaled for the region, then allocated based upon 75% a “constrained investment list” of projects and 25% discretionary funds based upon an 80% non-state road miles per county, and 20% based upon population. Funds are collected by the Georgia Department of Revenue, then transferred to the Georgia Finance and Investment Commission for distribution.

Confusing? You bet. That is intentional.

Here is the evaluation, from a cost recovery and fiscal conservative policy point of view, of why TSPLOST is an abomination:

  1. The bill says only the 5 member executive board has a vote on the final project list. Rural voters have no representation in that vote. See the Executive Committee paragraph halfway down the page. This is Taxation without Representation #1.

  1. Rural voters in 11 counties can vote it down, but still are subjected (See Special Districts, paragragh 2) to this regional government, if it massively passed in urban counties. This is Taxation without Representation #2.

  1. It is an Act of Extortion. The bill says regions that do not pass it see their state funds matching TRIPLED from 10 percent to 30 percent. (See Line 687-692, page 20, House Bill 277) Good news is that it will fail in a region or two prompting a HUGE lawsuit. Bill Jackson, Ben Harbin, and Lee Anderson voted to allow Nathan Deal to extort money out of us in this manner.

  1. Richmond County and Columbia Counties are Donor Counties, giving up an estimated $5 million and $2 million respectively, to fund the 25% discretionary funds for the other 11 counties. McDuffie County is said to be also a minor donor county, although the author’s analysis suggests it has a very slight benefit of less than $100,000 over 10 years.

  1. It is a 14.2% tax increase. Frugal folks get WIPED OUT by anything that increases living costs by double digits as your living costs double in less than 5 years (see Rule of 72). Worse, it compounds the 14% Georgia Power rate increases that Jackson, Anderson and Harbin gave us.

  1. The $840 million figure the Chamber is presenting is A LIE AND THEY KNOW IT. It is built on a wild income growth figure of 8% next year. WHO is getting 8% pay increases???? Their own figure is $689 million, apples to apples. Even that is too high by $50 million because the “low case” numbers are known to be off for this year by more than 50%. (More on this later.)

  1. It introduces a whole NEW LEVEL OF GOVERNMENT!!!! Ron Cross contests that with your author, but it has its own governing body, revenue stream, financial apparatus, and it calls for NEW STATE/REGIONAL positions (House Bill 277 New Code section, lines 236-329) written into the bill.

  1. It turns over nearly all funding in the rural counties (HB 277, line 786-789) to DOT, an agency this whole deal is bailing out after it lost track of its contract obligations, a failure so bad that Governor Perdue accused DOT of “ENRON ACCOUNTING.“

  1. Politicians already see this as a NEW way to divert or tie highway funds to such things as deepening the port at Savannah. This shouts WARNING!!!!!,for the state cannot be trusted with its TRUST FUNDS. Look up the Tire Fund, 911 fund, and Tobacco funds. What really is absurd is that this whole imbroglio was set up to CLAIM that it protected us from these SCAMS.

  1. This legislation creates a NIGHTMARE FOR RETAILERS as it requires separate sales and use tax reporting for each location! (See HB 277 lines 762-768).

  1. 17% of the revenues collected on motor fuels in Georgia go into the General Fund, not transportation. If transportation is the priority claimed, WHY is this true? What about the $750,000 to take a black bear census and to build bear underpasses on a state highway? Is that a transportation ‘priority?’

  1. Columbia County has huge funds from SPLOST which it uses for road improvements even on state highways. DOT keeps the motor fuel taxes. THIS IS A THIRD HUGE POT OF MONEY. Neither of the other two go away!

  1. Looking at the bill, it allows COUNTIES to charge Administrative costs (HB 277 Line 474). This is HIDDEN from cursory examination of this bill. No wonder the county administrators are drooling.

  1. Looking at the bill, it forces counties (HB 277 lines 800-850) to use DOT and envisions DOT as ‘consultant’ on the discretionary projects. The DOT’s Todd Long alluded to this during the Chamber of Commerce forum in Evans on Wednesday, June 6.

  2. House Bill 277 also states that the collection of TSPLOST funds is subordinated to collection of the state sales and use taxes (see HB 277, lines 750-752).

As a past member of the Greater Augusta Chamber of Commerce, this writer is concerned that championing this outrageous deception will ruin recruitment for Chambers of Commerce. It might be an easier sell for the Communist Party to sign up new members after this misguided foray into public policy!

Let’s defeat TSPLOST on July 31.

Along the way we need to make ALL of the county commissioners tell us their positions on this new tax so that we can be informed voters. They are calling it a “fair” tax, so isn’t requiring disclosure of their stance on TSPLOST likewise FAIR?

Then make the politicians PAY.***
A.G.
Join the Anti-TSPLOST movement on Facebook here–>  Vote NO to TSPLOST

TEE Parking Deck Exclusive: Augusta’s $714,357 “Incidental” Cost?

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May 31, 2012
Augusta, GA
By Al Gray

  

The story Fred Wrestles, Augusta Gets Decked?, published on Tuesday, May 29, 2012, offered a detailed and documented exploration of a story of rejected parking management bids, a questionable management firm selection, and a detailed comparison of Augusta’s bid contract with the administrations proposed contract. The questions and issues documented required a lengthy recitation to convey the magnitude of the subject. It was an epistle for those liking details.

Today’s key word is “incidental.” What is “incidental” within the Reynolds Street Parking Deck (RSPD) agreement? Can “incidental” be measured? Is “incidental” subject to debate?

What brought this subject to the fore was how the RSPD agreement deals with costs relating to the ground floor of the parking deck structure owned by designated manager Augusta Riverfront, LLC, specifically Article 3, Section 3.1 which includes this:

“The parties acknowledge that certain property and services paid for by Owner (Augusta) (editor’s unitalicized text) and required for the operation of the RSPD will also benefit Manager’s (LLC’s) (editor’s unitalicized text) ground level parking facilities located underneath and adjacent to the RSPD. Such property and services include, but are not limited to (editor’s emphasis), traffic control gates and related equipment, lighting, and services of a toll booth operator (the “Incidental Services”). The Incidental Services would be required for the operation of the RSPD whether or not the Manager owned the ground level parking facilities, and allowing Manager to benefit from these Incidental Services does not materially increase the costs to Owner. Accordingly, in further consideration of granting air rights and easements to Owner for the construction and operation of the RSPD, Manager shall have the right to utilize the Incidental Services for Manager’s ground level parking facilities located underneath and adjacent to the RSPD, so long as such use does not materially increase the cost to Owner.”

 

Whoa!

 

This caused a scurry to do some math on the RSPD 2012 Budget dated 8/29/2011  (see last page of linked documents). The budget totals $206,370. The deck structure (ground floor and floors above) has 650 spaces, of which 150 are property of the LLC, for 23% of the total spaces in the deck structure. The LLC percentage of the total deck structure, 23% times the total budget, is $714,358!!!! This is “incidental?” Is it not material?

To be clear, the legalese also essentially defines the “RSPD” as the ground floor parcels that Augusta bought, plus the structure above the ground floor. We laymen think the entire building structure from the foundations up as the “parking deck.” However, the annual budget didn’t restrict the numbers to the Augusta-owned portion,did it? Doesn’t the language of the agreement allow the LLC to bill Augusta for its fee and costs of the entire structure, including the ground floor it owns? The language allows the LLC to bill Augusta for the toll booth operator, while labor costs are the bulk of the budget. Shouldn’t there be language clearly prorating the costs instead of provisions that costs “are not limited to” those cited, which seems to open Augusta up to a cornucopia of costs?

 

With labor costs that are the vast majority of the agreement, the probable allocation of shared employee costs from the LLC’s hotel operations, further allocations between the RSPD and Conference Center deck, and, finally, the need to further allocate labor costs between levels of the RSPD, and only an annual audit allowed to verify the costs, aren’t the phrases “incidental,” “not limited to,” and “materially increase” plain dangerous to the taxpayer? Did the length of the agreement get reduced to five years, as indicated to the Augusta Commission in February?

It is a $714,358 question and then some. “Incidental” can be costly.***

 

— Al Gray

 

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