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Deck Contract Matrix 2

Deck Contract Matrix 2

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Published by CityStink Augusta

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Published by: CityStink Augusta on Jun 27, 2012
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06/27/2012

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City of Augusta Richmond CountyComparison of Proposed Reynolds Street Parking Deck Agreement to RFP11-087 Example AgreementJune 27, 2012
Proposed Contract with AugustaRiverfront, LLCAugusta RFP 11-087 Appendix FExample Contract
 Analysis
Article I DEFINITIONS
 
Capital Improvements
” shall mean
one or more items or project(s) - i)the cost of each of which totals$5,000.00 or more, ii) that becomespart of the RSPD, and iii) the cost of which is required or allowed to becapitalized under the accountingguidelines of Augusta, Georgia andGAAP.
ARTICLE 24SPECIAL CONDITIONS
CAPITAL EXPENDITURES ANDUTILITIES.
AUGUSTA
shall assumeresponsibility for all capitalexpenditures
Observation: RFP ExampleContract did not define
“Capital Improvements” 
because theManager/Operator was not authorized to purchase suchassets.Observation: Under criteria ii)would the $59,000 sweeper inthe 
 qualify asa capital expenditure?  Accounting Control 
Deficiency: Won’t allowing
the Manager to purchaseassets with Augusta Fundsresult in failure to record  fixed assets in the City fixed asset ledger? 
Article I DEFINITIONS
Effective Date
” shall mean the date
on which construction of the RSPDhas been completed, a certificate of occupancy for the RSPD has beenissued, and the RSPD has been fullyfurnished and delivered to Managerfor operation.No provision for an effective datedifferent than the contract executiondate was found.
Observation: The Proposed Management Agreement isretroactive to Fall 2011, whenthe deck opened.No retroactive effective datewas allowed in the RFP Example Contract.Question: What have beenthe procedures used since the parking deck opened? Do thecorrespond with the terms of this agreement? 
Article I DEFINITIONS
Operating Expenses
” shall
mean allexpenses required to be incurred inorder to operate and manage theRSPD to the extent the same areauthorized under the applicableAnnual Plan, including, but not
ARTICLE 4OPERATING EXPENSESI. AUGUSTA
shall reimburse the
OPERATOR
for all approved operatingexpenses incurred in themanagement, operation and
Observation: RFP ExampleContract. limits operatingexpenses to those approved in advance by Augusta.The Management Contract with ARLLC expands the
 
City of Augusta Richmond CountyComparison of Proposed Reynolds Street Parking Deck Agreement to RFP11-087 Example AgreementJune 27, 2012
Proposed Contract with AugustaRiverfront, LLCAugusta RFP 11-087 Appendix FExample Contract
 Analysis
limited to the following: (a) SalaryCosts of RSPD Employees and SharedEmployees; (b) operating supplies;(c) utility and telephone charges; (d)repair and maintenance costs; (e)equipment rental costs; (f) insurancecosts related to RSPD operations,including insurance premiums paidby Manager on behalf of the Owner(but not performance or fidelitybonds); (g) security costs; (h)cleaning expenses; (i) cost of reimbursable event expenses; (j) thecost of obtaining an auditedfinancial statement of Manager; (k)pre- and post-opening marketing,promotional and advertisingexpenses; (l) sales commissions; (m)maintenance agreements; and (n)any other expenses incurred in theoperation of the RSPD that would beconsidered operatingexpenses under GAAP.marketing of the Premises. "OperatingExpenses" as used herein shall includeall expenses relating to themanagement, operation andmarketing of the Premises, includingall salaries and wages, workmen'scompensation insurance as providedby state law, related payroll taxes,uniforms, supplies, tools, cleaning,maintenance, repair costs to revenuecontrol/office equipment, certifiedannual audit, tickets, postage, officeand marketing expense,hospitalization insurance, and otherexpenses as authorized and includedwithin an operating budget approvedin advance by
AUGUSTA.
2. Specifically, Operating Expensesshall not include costs of businesslicenses, permits, headquartersbookkeeping, administrative, oraccounting fees, liability insurance asdescribed in Article 18,bid/proposal, performance and fidelitybonds which shall be paid by the
OPERATOR
from the
OPERATOR's
Management Fee as defined in Article5. Operating Expenses shall also notinclude taxes on the Operator'spersonal property, debt retirement, orany other expenditure that is notincluded in the
OPERATOR's
approvedannual budget as included and definedherein, and not approved by
AUGUSTA
in writing.
definition to the broader definition of those expensesallowed under GAAP. GAAP can be construed to includecosts that the RFP ExampleContract excludes.
Article I DEFINITIONS
Salary Costs
” shall mean the gross
amount payable by an employer tosecure the services of an employeeincluding, without limitation,
ARTICLE 4OPERATING EXPENSES
I.
AUGUSTA
shall reimburse the
OPERATOR
.. all salaries and wages,workmen's compensation insurance asprovided by state law, related payroll
Observation: Wage and salary costs in the Proposed Management Agreement over and above those in theRFP Example Agreement include: Accrued and vested 
 
City of Augusta Richmond CountyComparison of Proposed Reynolds Street Parking Deck Agreement to RFP11-087 Example AgreementJune 27, 2012
Proposed Contract with AugustaRiverfront, LLCAugusta RFP 11-087 Appendix FExample Contract
 Analysis
employees’ accrued and vested
 wages, salaries, employeemedical/disability/life insurance andother health benefits incurred byManager, vacation pay and sickleave, severance costs, 401(k), profitsharing, pension or similarretirement benefits or other accruedand vested fringe benefits,business travel expenses, and othercompensation of whatever nature,including any applicable federal,state and local taxes. For theavoidance of doubt, Salary Costsmay also include bonuses foremployees or commissions for salesstaff.taxes
,….
hospitalization insurance, andother expenses as authorized andincluded within an operating budgetapproved in advance by
AUGUSTA
 
wages,401(k) costs, vacationand sick leave when theManager assigns personnel at its discretion.Observation: Under theManagement Contract 
“ 
Salary Costs may alsoinclude bonuses for employees or commissions for sales staff 
” 
The RFP Example Agreement provides for nobonuses.Question: If the Manager canassign personnel with sizablevested benefits, won
’ 
t that cost Augusta more than anentry level employee would? 
Article I DEFINITIONS
Shared Employees
” shall have the
meaning ascribed thereto by Section5.3(f) and may include officers,managers or members of Manager.The RFP Example Contract does not
allow for “Shared Employees.”
 
Observation: The RFP Example Contract allows for only a General Manager and an Assistant Manager. TheProposed Management  Agreement allows additional managers, including officers? 
Article I DEFINITIONS
RSPD Employees
” s
hall have themeaning set forth in Section 5.3(a)but shall not include any officer ormember of Manager or any personwho, directly or indirectly, otherwiseowns an interest in Manger or anyaffiliate thereof.The RFP Example Contract does notdifferentiate between
“SharedEmployees”
and RSPD employees.
Observation: The Proposed Management Agreement disallows officers withownership interests. This is anappropriate clarification.
 
ARTICLE IIAPPOINTMENT OF MANAGER ANDOPERATING TERM2.1 Appointment of Manager;Powers and Duties Generally
.Subject to
Manager’s covenants set
forth in § 5.1, Owner hereby
ARTICLE 22GENERAL PROVISIONS
12. Nothing herein contained shallcreate or be construed to create a co-partnership between
AUGUSTA
and Operator or toconstitute the Operator an agent of 
Observation: The RFP Example Contract deniesagent status. The Proposed Management Agreement makes the Manager  Augusta
’ 
s agent.
 

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