Even as scrutiny for the city’s budgeting and spending continues, records indicate Columbus has invested significantly less in project management and engineering over the past two fiscal years.
Documents The Dispatch obtained through a public records request show the city has spent 68 percent less with project management company J5 and cut 65 percent in engineering expenses with Neel-Schaffer since Fiscal Year 2017 (the city operates on a fiscal year from Oct. 1 through Sept. 30). The city charged The Dispatch $1,077.51 for access to the documents.
Those cuts are indicative of the city tackling fewer projects in that span. In FY 2016 and 2017, the city paid J5 $287,703.35 and $347,431.20, respectively. Those totals include a $7,500 monthly retainer fee and a percentage of projects J5 monitored for the city — such as the amphitheater construction, the Riverwalk extension, City Hall renovations, street paving and the former Gilmer Inn demolition and clean up.
For the last two fiscal years, J5 billed the city $108,540 in FY 2018 and $92,500 to date for FY 2019. A fiscal year for the city runs from Oct. 1-Sept. 30.
Similarly, Neel-Schaffer billed the city $516,701.39 in FY 2016, compared to $383,465.19 FY 2017. With fewer projects underway, the engineering firm billed the city $221,509.47 in 2018 and $128,120.85 through March of this fiscal year.
How that compares to what the city budgeted to pay those entities is unclear, as those projected expenses are budgeted across multiple line items that also include costs for things not related to those firms.
With major projects complete or on hold (additional phases for the amphitheater await funding sources to commence), Ward 6 Councilman Bill Gavin is hopeful expenditures to those independent city contractors will at least level off, if not continue to decrease.
“Hopefully some of the project costs will drop,” Gavin said. “There’s still some work to be done, but I think the major work has been done from the engineering side. As far as the amphitheater goes (where a stage is built but little else), we are still $2.5 to $3 million short of being completed.”
Ward 3 Councilman Charlie Box said with the city’s continued financial struggles, he anticipates those project-based fees to drop in the coming years.
“The past year we have tried to eliminate big projects,” Box said. “They probably will (decrease) because I’m going to keep pushing to not do any big projects for a while because that’s what got us in trouble. I don’t want to see us take on anything for a while that will costs us $100,000 or $200,000.”
J5’s relationship with the city
J5 contracted with the city in 2013, which alleviated Neel-Schaffer of project management duties it had been undertaking. Project management includes coordinating subcontractors for construction or street work and supervising those projects through completion, among other things.
The contract with J5 states the firm can receive a retainer fee for $90,000 a year plus 6 percent of construction the firm oversees. Since March of this year, J5 has eliminated the remainder of its retainer fee, a total of $7,500 a month.
J5 President Antwann Richardson said that decision to cut its retainer fee was to help the city financially during its crisis — two consecutive years of large operating fund deficits and the possibility of depleting its operating fund balance by Sept. 30.
“We saw them struggling financially and we wanted to make sure we could add value without adding a financial burden to that,” Richardson said. “… We wanted to make sure we were there for the city during that time and doing the right thing is what it boiled down to.”
J5 works with Neel-Schaffer on all major city projects, with the engineering firm providing designs and J5 assuring those plans are executed.
“We take that design, get with the contractor and make sure that things are done to the planning specs of the engineer,” Richardson said. “We have been able to save the city money by taking that design and getting it done.”
Neel-Schaffer also works on smaller-scale projects for the city that do not involve J5.
Richardson said though the contract states J5 can charge 6 percent of project costs, to date the company has only charged 4 percent. The call to eliminate the retainer fee entirely for the foreseeable future, Richardson said, came from J5 Owner Jabari Edwards.
He added J5 is taking a financial hit in eliminating some of those costs to the city. With J5 handling projects outside the city, it’s a cut J5 can afford to make.
“We do projects in other areas where we are able to offset some of the costs, but more than anything this is Jabari’s way of giving back to the community,” Richardson said.
J5 and the storm
Nearly half of what the city has paid J5 this fiscal year reflects the company’s storm recovery efforts. But even that, Richardson said, came at a deep discount.
When an EF-3 tornado tore through north Columbus on Feb. 23, J5 assessed damage throughout the city for the Federal Emergency Management Agency. Richardson said despite more than 500 hours of labor, the city was never charged for J5’s storm assessment.
After the assessment, J5 began charging the city for “billable hours,” with ranges in costs depending on personnel and the scope of the job. J5 has managed the debris cleanup and helped monitor and collect data for FEMA, and has charged $40,000 for that.
“With storm cleanup, you cannot charge a percentage of the project like a normal project,” Richardson said. “… We are managing the (debris pick-up), do all the labor logs for FEMA. That’s the only portion we charge for. … That $40,000, that’s the majority of the recovery, the debris removal. You’ll see that number trickle down.”
Kevin Stafford, with Neel-Schaffer, said though qualified to manage projects, the firm often takes a “back seat” when J5 is in play.
“J5 is a project and construction management firm,” Stafford said. “(J5) will oversee projects and fill that role. Neel-Schaeffer is simply a technical arm in that project.”
Neel-Schaffer’s work scope includes civil engineering for roads, drainage, sewage, streetlights and Columbus-Lowndes Airport projects.
The city’s contract with Neel-Schaffer is billed through three different options: hourly “as needed,” hourly “not to exceed” a certain amount, and separate contracted work. Neel-Schaffer does not charge the city a retainer.
For example, Stafford said, if the city has a project through the Mississippi Department of Transportation, those projects often require different billing and documentation that requires a separate contract.
Stafford said the city primarily is billed for hourly as needed, which includes charging the city for the firm’s time. Those hourly rates range depending on the personnel working on a project. For example Stafford’s hourly rate with the city is $64.92, whereas Zach Foster, an engineer who primarily works with the Columbus-Lowndes Airport, is paid $40.25 an hour.
“Different projects drive different contracts,” Stafford said. “(Hourly as needed), that’s the most common way we bill the city. I would say ballpark that’s probably 80 to 90 percent of the way we bill the city.”
Like J5, Neel-Schaffer’s cost are directly project-driven, Stafford said.
“We work on a project-by-project basis,” Stafford said. “… If our phone never rang and the city wasn’t doing any projects we would get paid zero.”
Neel-Schaffer’s relationship with J5
Stafford said the city bringing J5 on board offers both firms the opportunity to do what they’re best at.
“I no longer need to provide a day-to-day inspector or day-to-day construction manager,” Stafford said. “… J5 can handle that. We tell them at milestones of the project to call us out so we can verify everything is good. In turn, it only takes us an hour or two of our time versus being involved in the entire process.
“Nobody is stepping on anybody else’s toes,” he added. “… We never are both providing full oversight. Never do J5 and Neel Schaffer run parallel tracks on the same projects. We understand and know each other’s capabilities.”
For Box, he’s never supported the city having a contract with J5. He said he would prefer for the city to have one firm that serves as both the project manager and the engineer, though he admits doing so would not save the city much money.
“I’m not a big fan of J5 and I let it be known ever since they started,” Box said. “If we got rid of J5, which is not likely, a lot of that expense would just be passed over to Neel-Schaffer. … You could do away with one of them, but I don’t think you would save much money.”
Contrary to Box, Gavin said the city needs both entities working together for projects to operate most efficiently.
“I think we need both of them on the bigger-scale projects,” Gavin said. “They confer with each other. … They work together. J5 relies a lot on the engineering part. It kind of relieves Neel-Schaffer from the every day task of overseeing the projects.”