If you were on a board commissioned with spending up to $20,000,000 of tax revenue on amenities intended to enhance your community, would you spend the time that was necessary to coordinate the projects yourself, making sure that the public’s money was not wasted in any way, or would you spend some of the money to hire an expert who had a lot of experience coordinating huge community projects?
In an effort to be responsible for the $20,000,000 of 1% sales and use tax revenue that Cook County has been authorized to spend on a number of recreational, energy, and communications projects, the Cook County Board of Commissioners met on January 25, 2011 with consultant Tom Wacholz, president of ORB Management, to talk about what his company could do for the county.
According to a contract that had already been drafted, “The county desires to retain the consultant as its project manager to assist in the management and administration of the projects on behalf of the county….” ORB Management is already under contract with the county as the “owner’s representative” for one of the projects, a new community center/ pool facility.
“We think there’s a high degree of payback,” Wacholz said of the benefits of hiring ORB to oversee all the projects. He described the consultant’s role as a liaison and point of contact for the county board and groups working on the various projects. “You pay us to hold the team accountable,” he said. ORB could help ensure that resources were shared among projects whenever possible and could reduce costs by avoiding overlap of tasks and making use of the economy of scale—like buying cheaper in bulk.
ORB’s biggest value, Wacholz said, would be to bring the board accurate information that would enable commissioners to make the best possible decisions.
The seven projects specifically named in the legislation authorizing the 1% tax are: a community center/pool facility, outdoor recreational amenities on county property adjacent to Fifth Street and Fourth Avenue West in Grand Marais, an addition to the Grand Marais Public Library, capital improvements to Superior National at Lutsen golf course, outdoor recreational amenities at Birch Grove Community Center in Tofte, a biomass-fueled heating plant for public buildings in Grand Marais, and installation of fiber optic technology throughout the county.
Commissioner Sue Hakes said that two of the projects are uncertain right now—a biomass feasibility study has not yet been completed, and federal grants are funding much of the cost of fiber optic build-out throughout the county. Hakes indicated she would want to make sure the county would not be legally bound to ORB too far into the future, particularly with the possibility that a project like the biomass plant might not be underway for several years.
ORB Management suggested several payment options: a) a lump sum fee of $325,000; b) a fee of 2.5 percent of total project costs; and c) a monthly fee of $12,000 plus an hourly fee of $175 per hour for work done in excess of 65 hours a month. Additional expenses for mileage, lodging, meals, travel, postage, photographs, express delivery or courier services, duplicating documents, technology, long distance phone calls, cell phone charges, administrative support at $62 an hour, and related miscellaneous costs would be reimbursed as well.
The contract states, “Payment is based on the assumptions that total costs of the projects will be a minimum of $10 million, work would begin immediately, and performance of this agreement would be complete on or before January 1, 2013. Changes in the cost and/or time assumptions would allow for adjustments to consultant’s compensation accordingly.”
Wacholz said if ORB were hired, the company would not act as consultants on projects for which they were acting as owner’s representatives, such as with the community center project. Commissioner Bruce Martinson estimated that if the fiber optic and biomass projects were not done within the suggested contract period with ORB, the remaining projects, which are smaller, might total only about $2.6 million. Wacholz said they would be willing to include a statement in the contract allowing for changes in reimbursement as plans unfold.
Commissioner Sue Hakes said she thought Option B—paying 2.5 percent of the total cost of the projects—would be the least risky since they don’t know the scope of the projects yet. “It makes a certain amount of sense,” County Auditor-Treasurer Braidy Powers said, “given what we know and don’t know.”
When asked by Board Chair Jim Johnson, all five commissioners indicated they were in favor of entering a consulting agreement with ORB Management. County Attorney Tim Scannell suggested that he and Powers meet with ORB to discuss the contract further. The commissioners took his suggestion, and he will bring the contract, with any proposed revisions, back to them at their next regular meeting on February 8.
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