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 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.”
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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