City of Augusta Convention (TEE) Center Budget Issues and Questions Quantified February 7, 2013

Issue #

Question or Issue

Source Data and Calculation of Question or Issue

Links to Data Source Salaries $ $ $ $ $ 85,000.00 45,000.00 40,000.00 40,000.00 210,000.00 Benefit Factor 0.032 0.032 0.032 0.032 $ $ $ $ $ Vacations 2,720.00 1,440.00 1,280.00 1,280.00 6,720.00 $

Estimate

1 Annual salaries for salaried exempt positions are generally figured Director of Events Convention Services Manager at 40 hours per week for 52 weeks, or 2080 hours for the Accountant year,which is what the budget shows for 4 employees listed. Is budgetting salaried exempt employee vacations in addition to 52 Maintenance Engineer weeks at 40 hours per week a double application of vacation costs? Links to Data Source 2 Holiday pay is also budgetted for salaried exempt employees whose annual salaries might already include holidays. BQT Holiday Pay ADM Payroll and Taxes POM Payroll and Taxes HR Payroll and Taxes Totals Salaried Exempt Ratio
Salaried Exempt Holidays

6,720.00

Payroll $ $ $ $ $ 202,809.00 75,040.00 40,000.00 10,950.00 328,799.00

Salaried Exempt

Holiday Pay 4444 768

$ 85,000.00 $ 45,000.00 $ 40,000.00 $ 40,000.00 $ 210,000.00 $ 64% $

5,212.00 3,328.84 $ 3,328.84

3 The budget shows a total of $64,102 for Payroll Taxes, or about 19.45% of labor. The readily identifiable payroll taxes are less than 12%.What is the balance comprised of? [Employer Social Security and Medicare tax is 7.65% and the State and Federal Unemployment tax rate for a new employer is 2.92% on the first $9000 of wages per employee. (Employee share of 7.65% closely
approximates the difference but that is included in the employee wage.)]

Links to Data Source

Payroll

Payroll Taxes $ 39,539.00 $ 14,630.00 $ 7,798.00 $ 2,135.00 $ 64,102.00 $ (39,455.88) $ 24,646.12

Rate Budgetted

BQT Payroll and Taxes $ 202,809.00 ADM Payroll and Taxes $ 75,040.00 POM Payroll and Taxes $ 40,000.00 HR Payroll and Taxes $ 10,950.00 Total per Budget $ 328,799.00 Identified Payroll Tax Rate @ 12% Unidentified Rate Component

19.50% 19.50% 19.50% 19.50%

$
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24,646.12

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Tee Budget Rev. 1 Questions and Calculations

The budget shows a total of $64,102 for Payroll Taxes, or about 19.45% of labor. The readily identifiable payroll taxes are less City of Augusta than 12%.What is the balance comprised of? [Employer Social Convention (TEE) Center Budget Security and Medicare tax is 7.65% and the State and Federal Unemployment tax rate for a new employer is 2.92% onIssues and Questions Quantified the first $9000 of wages per employee. (Employee share of 7.65% closely February 7, 2013
approximates the difference but that is included in the employee wage.)]

Issue #

Question or Issue

Source Data and Calculation of Question or Issue

Links to Data Source Budgetted

Estimate

4 Credit card fees are budgetted at $3700 . Aren't credit card fees an offset to revenues? Also are hall rentals likely to be settled with credit cards instead of customer checks?

Credit Card Commissions?

3,702.00 Budgetted

3,702.00

5 Light bulbs, elevator parts, and HVAC parts are a total of $15,600. Links to Data Source Shouldn't these costs be minimal in the first year when the facility Light Bulbs is under warranty? Elevator Parts HVAC Parts Total
Adjustment for Warranty Coverage @ 50%

$ $ $ $ $ $

3,600.00 6,000.00 6,000.00 15,600.00 (7,800.00) 7,800.00 $ 7,800.00

6 The budget includes a line item for Property Insurance in the Links to Data Source Budgetted amount of $48,000, but the Tee Center Reciprocal Easement REA Property Insurance Link Agreement states "During the Term of this Agreement, City shall, Budget Amount $ 48,000.00 at its sole cost and expense, procure and keep in effect fire and extended coverage for the TEE Center and all personal property located thereon, including rent loss or business interruption coverage for periods of no less than twelve (12) months, written on an All-Risk Endorsement and Replacement Cost basis, in amounts at no time less than the total replacement cost therefor."

48,000.00

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Tee Budget Rev. 1 Questions and Calculations

City of Augusta Convention (TEE) Center Budget Issues and Questions Quantified February 7, 2013
Issue #

Question or Issue

Source Data and Calculation of Question or Issue

Links to Data Source Budgetted KwH 2,214,992.00 $ 2,214,992.00 $ Variance Rate Costs 0.11 $ 237,381.00 0.06 $ 121,824.56 $ 115,556.44 Electrical Power Budget Georgia Power Rates

Estimate

7 Electrical power is budgetted at 11 cents per kilowatt hour. According to the Georgia Power web site, the industrial rate in Georgia is 5.5 cents per kilwatt hour. (Also, there is a green energy program at 3.5 cents per kilwatt hour.) 8 Should the units of natural gas be Therms instead of MCF? 9 There is no provision in the budget to provide credit for Tee Center Employees who do work for the Marriott or Conference Center. (Under the existing Conference Center contract which has been extended, Augusta only bears a fraction of costs, including labor, and then only if costs exceed revenues) Two managers with the same job titles as appear in the budget, a Director of Events and Convention Services Manager, have been listed on the Marriott/Convention Center website before the Tee Center contracts were approved. SInce there was no Tee Center before, weren't these employees doing Marriott and Convention Center services? Unless there are new employees with parallel job titles, doesn't this indicate that Marriott and Convention Center employee costs for these two managers are being shifted to Augusta via the Tee Center management agreement? Would 50% sharing be reasonable?

$ 115,556.44

Links to Data Source Director of Events

Convention Services Manager

Budgetted $ $ $ $ $ 85,000.00 45,000.00 30,000.00 160,000.00 80,000.00

Incentive Pay for Above Marriott Staff Listing 50% Cost Sharing

80,000.00

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Tee Budget Rev. 1 Questions and Calculations

City of Augusta Convention (TEE) Center Budget Issues and Questions Quantified February 7, 2013
Issue # Question or Issue 10 Other management and nonmanagement Tee Center personnel other that the Director of Events and Convention Services Manager may be shared back to the Marriott and Conference Center, which should produce credits in the plan. Has Augusta analyzed the scope of the events booked for 2013 so see how extensive the use of the Conference Center is and to determine how much should be credited back? Would 20% sharing be reasonable without this study?

Source Data and Calculation of Question or Issue

Links to Data Source Total Labor per Plan Less Event & Services Managers Other Labor Total 20% Cost Sharing $ $ $ $ Budgetted 328,799.00 (160,000.00) 168,799.00 33,759.80 $

Estimate

33,759.80

TOTAL QUANTIFIABLE AMOUNTS FOR ISSUES AND QUESTIONS LOSS PER BUDGET LOSS TAKING INTO ACCOUNT ISSUE AMOUNTS

$ 323,513.20 $ (804,280.00) $ (480,766.80)

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Tee Budget Rev. 1 Questions and Calculations