May 31, 2012
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 deck 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.”
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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