City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement

June 27, 2012

Proposed Contract with Augusta Riverfront, LLC
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 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.

Augusta RFP 11-087 Appendix F Example Contract

ARTICLE 24 SPECIAL CONDITIONS CAPITAL EXPENDITURES AND UTILITIES. AUGUSTA shall assume responsibility for all capital expenditures

Analysis
Observation: RFP Example Contract did not define Capital Improvements because the Manager/Operator was not authorized to purchase such assets. Observation: Under criteria ii) would the $59,000 sweeper in the 2012 RSPD plan qualify as a capital expenditure? Accounting Control Deficiency: Wont allowing the Manager to purchase assets with Augusta Funds result in failure to record fixed assets in the City fixed asset ledger? Observation: The Proposed Management Agreement is retroactive to Fall 2011, when the deck opened. No retroactive effective date was allowed in the RFP Example Contract. Question: What have been the procedures used since the parking deck opened? Do the correspond with the terms of this agreement? Observation: RFP Example Contract. limits operating expenses to those approved in advance by Augusta. The Management Contract with ARLLC expands the

Article I DEFINITIONS Effective Date shall mean the date on which construction of the RSPD has been completed, a certificate of occupancy for the RSPD has been issued, and the RSPD has been fully furnished and delivered to Manager for operation.

No provision for an effective date different than the contract execution date was found.

Article I DEFINITIONS Operating Expenses shall mean all expenses required to be incurred in order to operate and manage the RSPD to the extent the same are authorized under the applicable Annual Plan, including, but not

ARTICLE 4 OPERATING EXPENSES I. AUGUSTA shall reimburse the OPERATOR for all approved operating expenses incurred in the management, operation and

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
Proposed Contract with Augusta Riverfront, LLC
limited to the following: (a) Salary Costs of RSPD Employees and Shared Employees; (b) operating supplies; (c) utility and telephone charges; (d) repair and maintenance costs; (e) equipment rental costs; (f) insurance costs related to RSPD operations, including insurance premiums paid by Manager on behalf of the Owner (but not performance or fidelity bonds); (g) security costs; (h) cleaning expenses; (i) cost of reimbursable event expenses; (j) the cost of obtaining an audited financial statement of Manager; (k) pre- and post-opening marketing, promotional and advertising expenses; (l) sales commissions; (m) maintenance agreements; and (n) any other expenses incurred in the operation of the RSPD that would be considered operating expenses under GAAP.

Augusta RFP 11-087 Appendix F Example Contract

marketing of the Premises. "Operating Expenses" as used herein shall include all expenses relating to the management, operation and marketing of the Premises, including all salaries and wages, workmen's compensation insurance as provided by state law, related payroll taxes, uniforms, supplies, tools, cleaning, maintenance, repair costs to revenue control/office equipment, certified annual audit, tickets, postage, office and marketing expense, hospitalization insurance, and other expenses as authorized and included within an operating budget approved in advance by AUGUSTA. 2. Specifically, Operating Expenses shall not include costs of business licenses, permits, headquarters bookkeeping, administrative, or accounting fees, liability insurance as described in Article 18, bid/proposal, performance and fidelity bonds which shall be paid by the OPERATOR from the OPERATOR's Management Fee as defined in Article 5. Operating Expenses shall also not include taxes on the Operator's personal property, debt retirement, or any other expenditure that is not included in the OPERATOR's approved annual budget as included and defined herein, and not approved by AUGUSTA in writing. ARTICLE 4 OPERATING EXPENSES I. AUGUSTA shall reimburse the OPERATOR .. all salaries and wages, workmen's compensation insurance as provided by state law, related payroll

Analysis
definition to the broader definition of those expenses allowed under GAAP. GAAP can be construed to include costs that the RFP Example Contract excludes.

Article I DEFINITIONS Salary Costs shall mean the gross amount payable by an employer to secure the services of an employee including, without limitation,

Observation: Wage and salary costs in the Proposed Management Agreement over and above those in the RFP Example Agreement include: Accrued and vested

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
Proposed Contract with Augusta Riverfront, LLC
employees accrued and vested wages, salaries, employee medical/disability/life insurance and other health benefits incurred by Manager, vacation pay and sick leave, severance costs, 401(k), profit sharing, pension or similar retirement benefits or other accrued and vested fringe benefits, business travel expenses, and other compensation of whatever nature, including any applicable federal, state and local taxes. For the avoidance of doubt, Salary Costs may also include bonuses for employees or commissions for sales staff.

Augusta RFP 11-087 Appendix F Example Contract

taxes,. hospitalization insurance, and other expenses as authorized and included within an operating budget approved in advance by AUGUSTA

Analysis
wages,401(k) costs, vacation and sick leave when the Manager assigns personnel at its discretion. Observation: Under the Management Contract Salary Costs may also include bonuses for employees or commissions for sales staff The RFP Example Agreement provides for no bonuses. Question: If the Manager can assign personnel with sizable vested benefits, wont that cost Augusta more than an entry level employee would? Observation: The RFP Example Contract allows for only a General Manager and an Assistant Manager. The Proposed Management Agreement allows additional managers, including officers? Observation: The Proposed Management Agreement disallows officers with ownership interests. This is an appropriate clarification.

Article I DEFINITIONS Shared Employees shall have the meaning ascribed thereto by Section 5.3(f) and may include officers, managers or members of Manager.

The RFP Example Contract does not allow for Shared Employees.

Article I DEFINITIONS RSPD Employees shall have the meaning set forth in Section 5.3(a) but shall not include any officer or member of Manager or any person who, directly or indirectly, otherwise owns an interest in Manger or any affiliate thereof. ARTICLE II APPOINTMENT OF MANAGER AND OPERATING TERM 2.1 Appointment of Manager; Powers and Duties Generally. Subject to Managers covenants set forth in 5.1, Owner hereby

The RFP Example Contract does not differentiate between Shared Employees and RSPD employees.

ARTICLE 22 GENERAL PROVISIONS 12. Nothing herein contained shall create or be construed to create a copartnership between AUGUSTA and Operator or to constitute the Operator an agent of

Observation: The RFP Example Contract denies agent status. The Proposed Management Agreement makes the Manager Augustas agent.

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
Proposed Contract with Augusta Riverfront, LLC
appoints, authorizes, and engages Manager, and Manager hereby accepts appointment on the terms and conditions hereinafter provided as agent to: (a) manage, operate, control, license, and rent the RSPD on Owners behalf during the Operating Term. ARTICLE II APPOINTMENT OF MANAGER 2.2 Except as otherwise additionally limited hereby, Manager shall have the discretion to prescribe the terms of the rental or licensing of space at the RSPD based on generally applicable and uniformly applied rates or that are negotiated with the user in arms-length bargaining, in either case, that is consistent with the applicable Annual Plan. ARTICLE II APPOINTMENT OF MANAGER 2.2 Notwithstanding the foregoing, Manager shall not be prohibited by this Section 2.2 from entering into a lease or licensing of space at the RSPD if Manager and Owner have received an Approving Tax Opinion.

Augusta RFP 11-087 Appendix F Example Contract

AUGUSTA. AUGUSTA and Operator each expressly disclaim the existence of such a relationship between them .

Analysis

ARTICLE 12 PARKING RATES Existing parking rates shall remain in effect until authorized and changed only upon approval of AUGUSTA.

Observation: Under the Proposed Management Agreement, the Manager can negotiate rates. Under the RFP Example Contract, it cannot.

ARTICLE 21 ASSIGNMENT AND SUBCONTRACTING 1. The Operator agrees that it will sublease or assign this Agreement or any part thereof, or any rights created thereby, without the prior written consent of AUGUSTA, it being the intention of AUGUSTA to grant this Agreement individually to the Operator. ARTICLE 2 TERM The initial term of this Agreement shall be from ________ 2011 through and including ,__________2014. 2. AUGUSTA reserves the right to renew this Agreement, at the sale discretion of AUGUSTA and under terms to be determined by

Observation: Under the RFP Example Contract, the Manager cannot sublease. Under the Proposed Management Agreement, the Manager can sublease .

ARTICLE II APPOINTMENT OF MANAGER 2.4 Subject to Article IV, the initial Operating Term of this Agreement shall be for a period commencing on the Effective Date and terminating on the fifth (5) year anniversary of the Effective Date.

Observation: Under the RFP Example Contract, the term is 2 years. Under the Proposed Management Agreement, the term is 5 years, 2 times more.

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
Proposed Contract with Augusta Riverfront, LLC
The initial Operating Term may be renewed or extended as provided in Section 2.5, 2.6, and 2.7. Notwithstanding the foregoing, this Agreement shall be binding on the date it is signed by Owner and Manager and provisions of this Agreement shall survive the Operating Term to the extent specifically set forth in this Agreement. ARTICLE III COMPENSATION OF MANAGER 3.1 The parties acknowledge that certain property and services paid for by Owner and required for the operation of the RSPD will also benefit Managers easement for ground level parking facilities located underneath and adjacent to the RSPD. Such property and services include, but are not limited to, traffic control gates and related equipment, sweepers, lighting, and services of a toll both operator (the Incidental Services). The Incidental Services would be required for the operation of the RSPD whether or not Manager maintained easements for 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 the granting of 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 Managers ground level parking

Augusta RFP 11-087 Appendix F Example Contract

AUGUSTA, for two (2) additional two (2) year renewal terms.

Analysis

There was no provision in the RFP Example Contract for the City to bear Incidental Expenses

Observation: Under the Proposed Management Agreement, the incidental expenses include wages and benefits for the toll booth attendant, utilities, and all of the operating expenses, including the Management Fee as these costs relate to 150 of the 650 parking spaces in the parking structure, or 23% of the total expenses. Question: How can 23% of the costs of operating the total parking structure, including the ground floor spaces, be considered incidental? Question: How can $238,000 costs, based upon the 2012 Plan Budget for the 5 year term of the contract, be considered to not materially increase the cost to Owner?

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
Proposed Contract with Augusta Riverfront, LLC
facilities (whether held in fee simple or easement) located underneath and adjacent to the RSPD, so long as such use does not materially increase the cost to Owner. ARTICLE III COMPENSATION OF MANAGER 3.2 The Management Fees shall be due and payable no later than the fifteenth (15th) day after the end of the month for which the Management Fee is owed and may be remitted by Manager directly to Manager from the Operating Account. ARTICLE V SERVICES OF MANAGER 5.2 Manager shall adopt and implement administrative, accounting, budgeting, marketing, personnel, and operational policies and practices consistent with industry standards for trade, exhibit, and event centers of similar size and quality. ARTICLE V SERVICES OF MANAGER 5.3 (a) Manager shall select, employ, promote, terminate where appropriate, supervise, direct, train, and assign the duties of all personnel which Manager reasonably determines to be necessary or appropriate for the operation of the RSPD (collectively, the RSPD Employees). All RSPD Employees shall be employed by Manager.

Augusta RFP 11-087 Appendix F Example Contract

Analysis

ARTICLE 4

Observation: Under the RFP Example Contract, Manager 3. The Operator shall invoice cannot remit its fee to itself AUGUSTA, by the twentieth (20th) day out of Augusta funds and of the month following the month of must invoice the fees no operation.. The monthly Operator's sooner than the 20th.Under Management Fee shall be included in the Proposed Management the monthly invoice. Agreement, the Manager can remit its own fees to itself on the 15th, for payment on the 15th. ARTICLE 7 OPERATIONAL Observation: Under the RFP PROCEDURES AND POLICY MANUAL Example Contract, a An Operational Procedures and Policy procedures and policy manual Manual (hereinafter "Manual"), was mandatory. Under the reflecting the operation of the facility Proposed Management as proposed by the Operator shall be Agreement, no specific submitted to the AUGUSTA within manual is required. thirty (30) days of the commencement date of this Agreement. ARTICLE 11 OBLIGATIONS OF THE Observation: Both OPERATOR agreements are similar with the possible exception that 6. The General Manager shall hire, the Annual Plan is more train, supervise and terminate, as limiting on personnel costs necessary, personnel to operate because compliance with it is cashier booths and perform the mandatory under the RFP required duties; provide supervisory Example Contract. personnel necessary to ensure efficient operation of the facilities; and equip staff and maintain a business office. AUGUSTA reserves the right to approve selection of the Operator's General Manager. The Operator shall additionally employ an Assistant Manager who shall be on

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
Proposed Contract with Augusta Riverfront, LLC Augusta RFP 11-087 Appendix F Example Contract
duty on alternate days when the General Manager is not on duty. ARTICLE 4 OPERATING EXPENSES I. AUGUSTA shall reimburse the OPERATOR for all approved operating "Operating Expenses" as used herein shall include .all salaries and wages, workmen's compensation insurance as provided by state law, related payroll taxes, hospitalization insurance, and other expenses as authorized and included within an operating budget approved in advance by AUGUSTA

Analysis

ARTICLE V SERVICES OF MANAGER 5.3 (d) Manager shall set the salaries and fringe benefits of all RSPD Employees consistent with industry standards and the Annual Plan. Costof living increases shall not exceed those given by Owner to its employees. Unless otherwise provided in the Annual Plan, no bonuses or merit raises shall be given without the approval of Owner.

Observation: Both agreements are similar in that the Manager sets the salaries within the guidance of the Annual Plan. However, the RFP Example Contract does not allow the Plan amounts to be exceeded without Augusta approval. Under the Proposed Management Agreement the Plan is only a guide.

ARTICLE V SERVICES OF MANAGER 5.3 (f) Manager may provide certain of the services under this Agreement through employees and agents of Managers Other Businesses (Shared Employees). ARTICLE V SERVICES OF MANAGER 5.4 Maintenance. (a) RSPD. Manager shall (i) maintain the RSPD in good condition and repair, and (ii) maintain, repair, and replace when necessary, furniture, fixtures and equipment for the RSPD. Subject to the limitation of 5.4(b), if applicable, Manager may withdraw funds from the Capital Account to pay for Capital Expenses. Manager shall obtain Owners approval prior to making any non-

There is no provision in the RFP Example Contract for Shared Employees.

ARTICLE 10 OBLIGATIONS OF AUGUSTA 1. AUGUSTA shall operate and maintain the lighting 3. AUGUSTA shall be responsible for any major maintenance or repair of the parking facility, landscaping, entrancelexit roadways, and areas outside of the Premises. 14. The Operator shall be responsible for maintenance of the interiors of the tollbooths, revenue control office, and any other structures that may be provided hereafter. The Operator shall be responsible for keeping the Premises,

Observation: The Proposed Management agreement is so broad to allow billing of salary and labor costs for agents of Managers Other Businesses. Who would that be? Observation: Under the RFP Example Contract, Augusta would make and control all capital Expenditures. The Proposed Management agreement allows for the Manager to make Capital Expenditures outside of Augustas asset accounting and control system.

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
Proposed Contract with Augusta Riverfront, LLC
emergency expenditure of more than $10,000.00 on a single maintenance item or category of Capital Expenses not otherwise authorized by the Annual Plan. ARTICLE V SERVICES OF MANAGER 5.5 Marketing. Marketing of the RSPD shall be the obligation of the Manager, subject to the terms of the Annual Plan.

Augusta RFP 11-087 Appendix F Example Contract

including all parking areas, entrance and exit areas, exit tollbooths,revenue control office, rest room and landscaped areas in or immediately adjacent to the Premises in a neat and clean condition at all times.

Analysis

ARTICLE V SERVICES OF MANAGER 5.9 Contracts. Manager is hereby authorized, without Owners prior approval, to enter into contracts, in its own name or as Owners agent, with vendors or service providers of its choice, provided, in addition, that the contract in question: (i) does not have a term exceeding the lesser of one year and the then remaining Operating Term, (ii) the aggregate annual Operating Expense attributable to the contract does not exceed $5,000, (iii) does not authorize the vendor or service provider to use any portion of the RSPD unless the compensation therefor is not based on the net profits arising from such service or activity, and (iv) is not inconsistent with the applicable Annual Plan. ARTICLE VI BANK ACCOUNTS 6.1 Bank Accounts. Manager shall open, at one or more banks in Augusta, Georgia selected by Manager, a bank account for the benefit of Owner, which will serve as an operating account for the RSPD

ARTICLE 4 OPERATING EXPENSES I. AUGUSTA shall reimburse the OPERATOR for all approved operating expenses incurred in the management, operation and marketing of the Premises. ARTICLE 11 OBLIGATIONS OF THE OPERATOR 17. The Operator shall maintain all of the revenue control equipment. Maintenance contracts shall have the approval of AUGUSTA prior to their execution by the Operator. Such costs shall be reimbursable under the Operator's approved annual budget.

Observation There is no notable difference in the 2 agreements

Observation: Under the RFP Example Contract, no maintenance contracts could be executed by the Manager without Augustas approval. Under the Proposed Management Agreement, they can be executed without Augustas approval.

ARTICLE 11 OBLIGATIONS OF THE OPERATOR 20. Operator shall provide a cash bank sufficient to accommodate parking transactions. ARTICLE 3 GROSS RECEIPTS

Observation: Under the RFP Example Contract, the bank accounts would be controlled by Augusta, with the exception of the small cash bank for parking transactions. Under the

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
Proposed Contract with Augusta Riverfront, LLC
(the Operating Account). and (b) a bank account for the benefit of Owner, which shall serve as a capital account for the RSPD (the Capital Account), as the source of funds for Capital Expenses. ARTICLE VI BANK ACCOUNTS 6.2 Operating Account; Payment to Owner. Manager shall deposit all Operating Revenues into the Operating Account. All Operating Revenues, whether or not deposited into such account, shall be solely the property of Owner.

Augusta RFP 11-087 Appendix F Example Contract

2. The OPERATOR shall deposit all Gross Receipts into an account as designated by AUGUSTA and in the name of AUGUSTA, prior to the end of the next banking day after collection.

Analysis
Proposed Management Agreement, the Manager sets up an Augusta-funded bank account that it controls.

ARTICLE 3 GROSS RECEIPTS The OPERATOR shall deposit all Gross Receipts into an account as designated by AUGUSTA and in the name of AUGUSTA, prior to the end of the next banking day after collection. A penalty for failure to deposit said Gross Receipts by the end of the next banking day following collection shall be assessed equaling ten percent (10%) of the total amount of that day's Gross Receipts. Failure to deposit the Gross Receipts within the required time period in excess of two (2) occurrences per month shall be cause for immediate termination of this agreement.

Observation: Under the RFP Example Contract, revenues have to be deposited by the end of the next banking day. Under the Proposed Management Agreement, the Manager can withhold revenues from deposit in the Operating Account for an unspecified period. Question: Why would the Proposed Management Agreement fail to address the requirement of immediate deposit, while including the phrase whether or not deposited into such account?

ARTICLE VI BANK ACCOUNTS 6.2 Operating Account; Payment to Owner e Operating Account shall, at all times, contain a permitted reserve sufficient to cover Operating Expenses for the next 90 days, without regard to the future receipt of any Operating Revenues.

ARTICLE 3 GROSS RECEIPTS 4. The OPERATOR shall be granted an operating fund advance equivalent to 2 months operating expenses, to be credited against the first two months of operation. This advance is applicable solely to the initial term of this agreement.

ARTICLE VI BANK ACCOUNTS 6.3 Capital Improvements and Capital Account. Owner agrees to provide all necessary funding for

Observation: Under the RFP Example Contract there is a prefunded balance for 60 days, and then the fund balance is recouped by Augusta. Under the Proposed Management Agreement, the Manager has Augusta prefund, and continuously fund, a REVOLVING 90 day fund balance. ARTICLE 10 Observation: . Under the RFP 5. AUGUSTA shall provide the parking Example Contract the revenue control equipment. AUGUSTA Manager cannot make capital shall review the need for additional expenditures and hence

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
Proposed Contract with Augusta Riverfront, LLC
Capital Expenses that are reasonably necessary to maintain the RSPD to the Standard in accordance with the Annual Plan. Fifteen percent of all net operating revenues shall be earmarked annually by Owner for Captial Expenses until the balance of earmarked funds is the lesser of $250,000.00 and the capital reserve approved in the Annual Plan. Upon Manager notifying Owner in writing that a portion of such earmarked funds are needed for payment of Capital Expenses, then Owner will within fifteen (15) day deliver funds to Manager as necessary for the payment of Capital Expenses and Manager will deposit such funds into the Captial Account. ARTICLE VII BUDGETS 7.3 Approval of Annual Plan. Operating Revenues will be especially difficult to predict, the Annual Plan will be only a planning tool. Furthermore, expenses related to the RSPD vary in proportion to business volume, making budgeting imprecise and unpredictable. During the initial three Fiscal Years, Owner authorizes Manager to deviate from the Operating Expenses or Capital Expenses as set forth in the Annual Plan, following notice to Owner and without any prior approval of Owner if, in the reasonable judgment of Manager, such deviation is necessary to achieve Owners objectives to operate RSPD

Augusta RFP 11-087 Appendix F Example Contract

equipment which may be requested from time to time by the Operator in order to meet the demands of new technologies or in order to provide more effective an efficient service due to revised operating procedures. Approval for the purchase of such requested equipment shall be at the sole discretion of AUGUSTA. Any such equipment approved for purchase by the Operator shall be purchased according to established AUGUSTA purchasing procedures and shall be included in the Operating Budget as approved by AUGUST A.

Analysis
needs no prefunded Balance. Under the Proposed Management Agreement, Augusta has to prefund as much as $250,000 and maintain the balance.

ARTICLE 6 ANNUAL BUDGET 1. The OPERATOR shall submit to AUGUSTA, ninety (90) days prior to each anniversary date of this Agreement, an annual and monthly budget, for all Operating Expenses to be incurred during the year. AUGUSTA shall notify the OPERATOR of any changes to the budget or budget approval, on or before the anniversary date of this Agreement. 2. Upon approval by AUGUSTA, all Operating Expenses included in the annual budget shall be considered authorized and reimbursable, as incurred, to the OPERATOR. Changes to the annual budget shall be approved in writing by AUGUSTA. Any expense incurred by the Operator above the pre-approved budget in any single month period shall not be reimbursed

Observation: Under the RFP Example Contract adherence to the Annual Plan is mandatory for the entire contract period. Under the Proposed Management Agreement adherence to the Annual Plan is optional for the first 3 years.

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
Proposed Contract with Augusta Riverfront, LLC Augusta RFP 11-087 Appendix F Example Contract
by AUGUSTA unless prior written approval is received from the Assistant Director. ARTICLE 8 RECORDS AND REPORTS 1. The Operator shall keep and maintain true and accurate records of gross receipts and operating expenses in accordance with generally accepted accounting principles. The Operator shall submit daily to the Assistant Director or designated representative a validated deposit slip for the previous day(s)'s receipts. The Operator shall submit monthly to AUGUSTA, the following: a) An activity report reconciling total Gross Receipts to the daily deposits. b) Daily report of Gross Receipts, overnight vehicle count, ticket validations and exceptions, and ticket reconciliation in accordance with the Operations Procedures and Policy Manual. c) Monthly activity and Gross Receipts summaries and certifications, to be reconciled to daily reports. ARTICLE 9 AUDIT Within 90 days following the end of each fiscal year, Operator shall provide an unqualified statement certified by an Independent Certified Public Accountant in accordance with generally accepted accounting principles (GAAP) certifying that Gross Receipts due AUGUSTA and Operating Expenses are true and accurately reported as defined within this

Analysis

ARTICLE VII BUDGETS 7.6 Books and Records. Manager shall establish and maintain for the benefit of Owner complete, current, and accurate records and books of account reflecting all transactions of the RSPD and of Manager with respect to the RSPD that are separate from Managers Other Businesses. Manager shall make such books and records available during normal business hours and at all other reasonable hours at the RSPD for inspection, copying, and audit upon reasonable notice by Owner and its agents.

Observation: Under the RFP Example Contract adherence to the Annual Plan is mandatory. Under the Proposed Management Agreement there is a significant exception to keeping books reflecting all transactions , that being that RSPD employees are on the Managers payroll within the Managers Other Businesses. The contract exempts such costs from record keeping and disclosure requirements.

ARTICLE VII BUDGETS 7.7 Financial Statements. (a) Annual Statements. Manager shall prepare and deliver to Owner by the 90th day after the end of each Fiscal Year the following financial statements and reports (the Financial Statements) using GAAP,(goes on to itemize required statements)

Observation: Both contracts require annual audited financial statements Under the RFP Example Agreement Augusta can audit with 48 hour notice. The Proposed Management Agreement makes the limited books and records at the RSPD available any time during normal business hours.

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
Proposed Contract with Augusta Riverfront, LLC Augusta RFP 11-087 Appendix F Example Contract
agreement. The cost of the audit will be considered an operating expense. AUGUSTA reserves the right to audit all books and records of the Operator at any time upon forty-eight (48) hours advance notice to the Operator. If the audit results reflect a shortage of funds over three percent (3%) per annum, the Operator shall bear the full cost of the audit and reimburse AUGUSTA for any shortage. ARTICLE 3 GROSS RECEIPTS The OPERATOR shall submit to AUGUSTA a monthly statement accounting for all "Gross Receipts" due by the twentieth (20th) day of the month following the month of operation. The monthly revenue statement shall be in a format approved by the Assistant Director. Failure to submit this statement on or before the indicated date may be cause for immediate cancellation of this agreement. ARTICLE 21 ASSIGNMENT AND SUBCONTRACTING 1. The Operator agrees that it will not sell, convey, transfer, mortgage, subcontract, sublease or assign this Agreement or any part thereof, or any rights created thereby, without the prior written consent of AUGUSTA, it being the intention of AUGUSTA to grant this Agreement individually to the Operator. 2. Any assignment or transfer of this Agreement or any rights of the Operator hereunder, without the prior written consent of AUGUSTA is invalid, and shall convey to AUGUSTA the right to terminate this Agreement

Analysis

ARTICLE VII BUDGETS (b) Quarterly Statements. On or before 30 days after the end of each calendar quarter, Manager shall prepare and deliver to Owner a statement showing Operating Revenue and Operating Expenses for the previous calendar quarter and Statement of Capital Expenditures.

Observation: The RFP Example Contract calls for monthly statements, but they would exclude reporting of Expenses. The Proposed Management Agreement calls for Quarterly statements, but fails to enumerate the details required beyond simply reporting summary figures.

ARTICLE VIII ASSIGNMENT 8.1 Assignment by Manager. (a) Manager shall have the right, without the prior written consent of Owner (but only upon not less than five (5) business days prior notice to Owner), to assign this Agreement or any duties arising hereunder to any entity controlled by, or under common control with, Manager,

Observation: The RFP Example Contract does not allow assignment and provides for the termination of the contract if the Manager does it. The Proposed Management Contract allows assignment, even assignment without Augustas consent.

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
Proposed Contract with Augusta Riverfront, LLC
DEFINITIONS Operating Expenses shall mean all expenses required to be incurred in order to operate and manage the RSPD to the extent the same are authorized under the applicable Annual Plan, including, but not limited to the following: (f) insurance costs related to RSPD operations, including insurance premiums paid by Manager on behalf of the Owner (but not performance or fidelity bonds)

Augusta RFP 11-087 Appendix F Example Contract

at its sole discretion. ARTICLE 15 PERFORMANCE AND FIDELITY BOND 1. Upon execution of this Agreement, the Operator shall furnish AUGUSTA with a valid performance bond in the principal sum of seventy-five thousand dollars ($75,000) issued by a company acceptable to AUGUSTA, authorized to do business in the State of Georgia, and payable to AUGUSTA in case this Agreement is canceled for cause or upon default by the Operator. Said bond shall be kept in full force by the Operator during the term of this Agreement and any extension hereof. The bond shall be conditioned to ensure faithful and full performance of all the terms of this Agreement by the Operator. Evidence of the maintenance of this performance bond shall be submitted annually, on the anniversary of this Agreement, to AUGUSTA. 2. The Operator agrees to obtain and maintain during the term of this Agreement a fidelity bond in an amount not less than $25,000 guaranteeing the faithful performance of the General Manager, Assistant Manager, Supervisors and employees handling or responsible for the handling of daily Gross Receipts . The fidelity bond shall be in a form and drawn on a surety acceptable to AUGUSTA. ARTICLE 16 INSURANCE AND INDEMNIFICATION 1. Operator shall provide and maintain, at its own expense which is

Analysis

Observation: Under the RFP Example Contract the Manager would provide performance and fidelity bonds at no cost to Augusta. Under the Proposed Management Agreement there is no mention that a performance and Fidelity Bond is to be provided.

ARTICLE IX INSURANCE 9.4 Cost and Expense. Except with respect to insurance premiums that

Observation: Under the RFP Example Agreement insurance costs are not reimbursable and are paid

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
Proposed Contract with Augusta Riverfront, LLC
are paid by Owner other than with funds held in the Operating Account, insurance premiums and any costs or expenses with respect to the insurance described in this Article shall be an Operating Expense of the RSPD. Any reserves, losses, costs, damages or expenses which are uninsured, or fall within deductible limits or self-insured retentions, shall be treated as a cost of insurance and shall be an Operating Expense. ARTICLE IX INSURANCE Owner shall either self-insure or selffund or provide insurance equal or greater the following insurance requirements 9.1 General Liability Insurance. Owner shall carry comprehensive general liability insurance, including contractual liability, personal and bodily injury, and property damage insurance, on the RSPD, with a combined single limit in an amount sufficient to protect Owner and Manager, but in no event will such insurance be in an amount less than a combined single limit of $3,000,000 per occurrence.

Augusta RFP 11-087 Appendix F Example Contract

not reimbursable, the following types and amounts of insurance, during the term of this contract: ~ Comprehensive General (Public) Liability - to include (but not limited to) the following: Combined Single Limit for Bodily Injury and Property Damage: $1,000,000

Analysis
out of the Managers fee. Under the Proposed Management Agreement, liability and most other insurance costs are either borne directly by Augusta or are a reimbursable cost under the agreement.

ARTICLE 16 INSURANCE AND INDEMNIFICATION 1. Operator shall provide and maintain, at its own expense which is not reimbursable, the following types and amounts of insurance, during the term of this contract: ~ Comprehensive General (Public) Liability - to include (but not limited to) the following: Combined Single Limit for Bodily Injury and Property Damage: $1,000,000

Observation: Under the RFP Example Agreement, where Augusta only required $1MM coverage, the Manager would have paid the costs. Under the Proposed Management Agreement, liability insurance cost for $3MM is passed on to Augusta.

Disclaimer This analysis was performed without compensation to its author and was expedited in an effort to inform the Board of Commissioners of Augusta Richmond County of potential issues, observations, and questions with respect to the Proposed Parking Deck management agreements. The Conference Center Management Agreement was not included due to time constraints. The Management Fee was excluded in order to compare the commercial terms of the Proposed Agreement with the RFP 11-087 Example Agreement.

City of Augusta Richmond County Comparison of Proposed Reynolds Street Parking Deck Agreement to RFP 11-087 Example Agreement June 27, 2012
The RFP 11-087 Example Agreement is considered to be a valid instrument for comparison as it was accepted, in most part, by recommended Manager, Ampco Parking Systems, and it represents much of the pre-existing Republic Parking agreement with Augusta. Sources: Augusta Request for Proposals RFP 11-087 Package