Middaugh's hot rants
Last week we posted a guest column by businessman Dave Lister about Metro government's mismanagement of the Glendoveer golf course. Lister's complaints were several:
- the course was in lousy shape,
- the clubhouse had taken on a forlorn look,
- Metro president Tom Hughes (we call him Waylon) had falsely promised to maintain or improve conditions at the course,
- Metro had unwisely removed private enterprise from running the facility, and
- the recent changes had made the course workers all part-time Metro employees, without benefits.
It wasn't long before Metro's chief flack, Jim Middaugh, jumped into the comments here to accuse Lister of lying about the facts. Middaugh, who makes around $135,000 in a job that deserves about half that, wasn't polite about the matter, either. He got way up on his high horse and started right in with personal nasties:
As usual, Mr. Lister is wrong. Worse, as usual he didn't bother to check his facts with a simple phone call or email.... The lack of honesty and integrity in posts like this is shameful....
People can oppose Metro if they want. When they spread false information I personally believe it warrants a response....
You're facts are still wrong. I don't care how many paychecks you've signed a lie is still a lie.
At our request, Middaugh sent us what he says is the written agreement between Metro and its contractor, a California outfit named CourseCo, for the management of the course. You can read it in all its glory here. Looking it over, we see that Lister may have had one fact wrong, but the gist of what he wrote was entirely accurate. You can argue about a couple of the specifics, but to accuse him of dishonesty and lying is total horsepuckey -- the kind in which Metro specializes.
Under the contract, it appears that the employees at Glendoveer are now employees of CourseCo, not Metro. But Metro pays every single penny of the employees' paychecks, because the contract passes all operating costs on from CourseCo to Metro. Payroll expenses don't even affect CourseCo's annual bonus.
Now bear with us here on the legalese. CourseCo is called the "Operator" in the contract, and here's what the document says:
3.07 Personnel. Operator, as a Direct Cost, shall employ all of the employees of the Golf and Tennis Center and set all terms and conditions of the employment....
So there -- you see? Lister screwed up. The workers are CourseCo employees, not Metro. But read on:
4.0 METRO OBLIGATIONS.
ln consideration of Operator's performance of the work described in this Agreement and the Operator's performance of all duties, tasks and obligations of this Agreement throughout the term of this Agreement Metro agrees to pay Operator the Management Fee and Incentive Fee in accordance with the provisions set forth in Section 6 and to perform any other obligation specifically enumerated in this Section or in this Agreement....
7.01 Combined Management Fee. For the provision of all work and services performed under this Agreement, Metro shall pay to Operator a Management Fee consisting of the annual Fixed Management Fee set forth in Sub-section 7.02 and paid in equal monthly installments and the Incentive Management Fee set forth in Sub-section 7.03 and paid in a single lump-sum payment as provided in Sub-Section 7.04.
7.02 Annual Fixed Management Fee
For Calendar Year 2013, the Annual Fixed Management Fee paid to Operator shall be $105,000.00.
For Calendar Year 2014, the Annual Fixed Management Fee paid to Operator shall be $125,000.00.
For Calendar Year 2015 and for each Calendar Year thereafter, the Annual Fixed Management Fee paid to Operator shall be $145,000.00 [with a cost-of-living adjustment -- JB]....
7.03 Incentive Management Fee. ln addition to the Fixed Management Fee, Operator shall earn, and Metro shall pay, an lncentive Management Fee in the amount that is equal to 5 percent of the first $300,000 of any increases in Gross Revenues above the Gross Revenue Base; and in the amount that is equal to 15 percent of any increase in Gross Revenues above the Gross Revenue Base in excess of $300,000....
That's interesting. CourseCo gets a bonus, but it depends on whether it raises gross revenues, not the bottom line profit or loss. Thus, employee salaries are not CourseCo's concern; what it charges the patrons is. And so as a matter of economic reality, are those really employees of CourseCo?
Don't answer yet. Get a load of how the payroll gets paid:
1.15 Direct Costs. "Direct Costs" are defined as any cost which is directly related to normal and ordinary staffing, operations or routine maintenance of Golf and Tennis Centers approved by Metro....
8.01 Bank Account. Metro will establish and maintain a bank account at a bank designated by Metro (the "Bank Account") for the purposes of accepting deposits of the Gross Revenues and paying Direct Costs. The funds in the Bank Account and all interest thereon, are the property of Metro....
8.03 Payment of Direct Costs. Metro shall pay all budgeted Direct Costs from the Bank Account. Payment of all legitimate claims shall be made in a timely manner. Operator shall submit to Metro an invoice and monthly report detailing Direct Costs pursuant to Section 8.06 no later than the 15th of the succeeding month. Reimbursement shall be net 30.
And so when CourseCo cuts corners on staffing, the benefit of the diminished payroll is enjoyed entirely by Metro. All the expenses are paid out of a bank account established by Metro. In other words, the workers may not be Metro employees, but economically their pay and workload are Metro's concern, and not the contractor's. Their paychecks may say "CourseCo," but those paychecks are in fact paid in full by Metro.
Ad so was Lister "lying"? Clearly not. It seems to us he made an honest mistake, and a minor one at that. Middaugh protests too loudly, revealing the basic truth of Lister's observations.
Middaugh is to public relations as Metro is to government -- arrogant, with too much money to play with, and largely unnecessary. He's the same guy he was when he ran Erik Sten's dopey city hall office -- free municipal wi-fi, "clean money" elections, a regional water authority, a city takeover of PGE, the list of his misguided, expensive, failed projects is as long as your arm. And in the end, Middaugh took an inside tip from Sten to get a jump on the opposition to use public money to run for the city council. Portland voters did not buy Middaugh's act then, and nobody with a lick of sense in the region will be buying it now, except maybe his Metro bosses, the BlueOregon birds, and the born-again smart growth fans at the Pamplin newspaper-sand and gravel conglomerate.
Middaugh, his "professional reporter" flunkies, his bogus Opt-In surveys, and his disgraceful elephant puppy mill constitute an enormous boil that cries out for a satisfying lancing. Portland may need regional land use planning, but everything else Metro does can and should be farmed out elsewhere. Metro and its staff should be about 20 people total. It should not be running zoos, parks, cemeteries, convention centers, expo centers, or anything else. And it certainly shouldn't be forking over six figures a year to a hot-tempered flack with a posse of subordinates to spend his meaningless work days dreaming up new ways to mislead the public. Of all people to question to someone's integrity!