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Report: PRFO Owes the City Over $220,000 in Blair Park Project Costs

The Piedmont Recreational Facilities Organization hasn't made a payment to the City of Piedmont since September, according to a report prepared by City Administrator Geoffrey Grote

The Piedmont Recreational Facilities Organization (PRFO) owes the City of Piedmont over $220,000 for costs associated with the Blair Park sports field project and has not made a payment since Sept 13, 2011, according to a report prepared by City Administrator Geoffrey Grote.

The report was prepared for Monday's Piedmont City Council meeting, when council members are scheduled to consider rescinding their Dec. 5, 2011 approval of the Blair Park Element of the Moraga Canyon Sports Fields Project. The $6 million-plus plan would have built soccer fields at Blair Park on Moraga Avenue, privately financed through the PRFO.

A reimbursement and indemnification agreement between PRFO and the city, dated Aug. 12, 2011, specifies an initial deposit of $118,000 from PRFO to reimburse the city for "legal and consultant costs directly or indirectly incurred by City in connection with review and processing of the Proposed Project, including legal defense costs."

The $118,000 was paid by PRFO in two installments, $43,530 on July 18, 2011, and $74,470 on Sept. 13, 2011, according to Grote's report.

The reimbursement agreement also states, "City shall use the Deposit to pay for Eligible Costs when such costs become due. City shall notify PRFO in writing to replenish all or a portion of the Deposit, and PRFO shall provide such replenishment to City within fourteen (14) days of same written notice. This cycle of withdrawal, notice and replenishment of the Deposit may be repeated from time to time as necessary to cover the Eligible Costs."

It appears from Grote's report that PRFO was not billed for additional costs until Jan. 17, 2012, by which time total eligible costs had reached $241,374.69 for the period between Mar 22, 2011, and Nov. 30, 2011. Subtracting the $118,000 deposit, that left PRFO owing the city $123,374.67.

A second notification to PRFO dated Jan. 19, 2012, upped total eligible costs for the same time period to $253,849.88, with PRFO now owing $135,849.28.

"They [PRFO] have not yet been billed for costs incurred after January 1, 2012, pending the discussions that have taken place and are ongoing," Grote's report says. "Final billing will be presented to PRFO following the City Council’s decision on this matter."

Much of the eligible cost stemmed from work done by attorneys and environmental consultants during October and November 2011 in preparation for the city council's meeting of Dec. 5, 2011, according to Grote's report. In addition, the environmental consulting firm LSA Associates did additional traffic analysis of the plan in December of 2011 and sent a traffic engineer to a January 2012 meeting with the City of Oakland, the report says. 

However, invoices for eligible work done through Oct. 31, 2011, already totaled $155,304.98, or $37,304.98 more than PRFO had paid to the city.

According to Grote's report, "In January of 2012, after bills for November’s work were received and became known, PRFO and the City Administrator began discussions regarding the nature and amount of these costs."

A third bill dated Feb. 7, 2012, showed eligible costs of $303,588.55 for work done through Dec. 30, 2011, with PRFO now owing $185,588.55.

To date, according to Grote's report, eligible costs have reached $338,267.08, with $220,267.08 owed by PRFO.

The report shows the following breakdown of professional costs:

  • Burke Williams Sorenson, $162,888,96. (Legal firm which supplies the services of Piedmont City Attorney Tom Curry under contract.)
  • Burke Williams Sorenson for work connected to a Friends of Moraga Canyon lawsuit challenging the Blair Park environmental impact report, $16,142.70.
  • LSA Associates, $65,936.47. (Environmental consultants for the project's environmental impact report.)

In discussions between Grote and PRFO representatives, Grote's report says, "PRFO correctly points out that much of the work done by the City Attorney and Special Legal Counsel were duplicative of work done for PRFO by professionals either on a volunteer or retained basis.

"These costs were incurred as both the City Attorney and Special Legal Counsel were required to review all documents prepared by the environmental consultants and by PRFO’s attorneys.

"In addition, the City Attorney was required not only to review environmental materials, but to be an active participant in the negotiations for the site lease, which generated significant legal questions."

Grote also says in his report, "During the discussion of the above costs, equally important questions arose regarding who would pay for future costs likely to occur when litigation proceeded, the site lease negotiations resumed, and a second set of story poles needed to be installed.

"In addition, internal and external labor for supplementary City oversight during the project implementation was discussed in the context of costs. Given that higher than anticipated costs were more than PRFO felt it could sustain, PRFO requested that the City pay a portion of these expenditures going forward.

"Given that the City Council and City Administrator had taken the position that all project costs, would, of necessity, be borne by PRFO, the resulting public policy question of whether the City would or should pay any costs became the central issue.

"As the City Council and City Administrator had made their position clear that PRFO must bear all of these costs, PRFO and the City Administrator have agreed that there is no way forward for this project, the application should be and has been withdrawn, and the approval should be rescinded.

"Following the closed session of April 16th, the Council directed that this item appear on the May 7th agenda for rescission of project approval."

In addition to eligible costs, Grote's report says, city staff members have spent an estimated 2,313 hours on the Blair Park project, which would, if figured at appropriate hourly rates, total $246,187.02. However, none of this time is billable to PRFO under the reimbursement agreement.

Grote's complete report, released to the public late Thursday afternoon, is available on the City of Piedmont website.

The city council will meet Monday, May 7, at 7:30 p.m. in the City Hall council chambers, 120 Vista Ave. The Blair Park issue is the first item on the regular agenda.

Council members are also scheduled to hear a presentation on the city's proposed budget for fiscal year 2012-2013. You can see the complete agenda here.

 

 

 

Rick Schiller May 04, 2012 at 04:51 PM
The Piedmonter today (and confirmed elsewhere) stated City Expenses $883,895; these are hard costs paid out. Estimate of billable staff time in Grote's report is $246,187. Total: $1,130,082. Deduct from that PRFO payments, and you have a net cost to taxpayers. The 2011 MTRC recommended no taxpayer money be spent on Blair Park. The MTRC also warned that escalating Pension costs must be controlled. Neither of these recommendations have been followed.
Mary McFarland May 04, 2012 at 05:32 PM
So much for the The Piedmont Recreational Facilities Organization's "promise" that they would pay for all costs associated with the Blair Project...... It is rather naive on their part to presume that the City would not have many costs during the approval process and beyond. Our City Administrator Geoff Grote and the City Council have not been billing the PRFO during the last year as expenses have been incurred as per the signed contract? Or worse yet without getting a signed contract? Were not WE promised no additional expenses per this project by the CITY as well as the PRFO? So much for Promises. All involved have left us all with quite a GIFT!
Jim Hughes May 05, 2012 at 04:19 AM
Some gift. Personally, I believe it was PRFO's intent all along to stick the City--the taxpayers--with as much cost as they could get away with.
David Cohen May 06, 2012 at 01:54 AM
A $1.1 million dollar bill. Wow, with gifts like that, who needs debts?
George Childs May 09, 2012 at 06:32 PM
I once had a mid-level manager at the company I worked for make a statement regarding promises: "Promises are for children; very SMALL children!" Seems to me that the taxpayers of Piedmont are being treated in this manner by many promoters of this failed project. G. Childs

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