Explanation
In December 2006, the City purchased 1111 East Broad Street (now the Jerry Hammond Center, "JHC") as authorized by Ordinance No. 1005-2006, passed by City Council on June 8, 2006. As part of the requirements of the purchase agreement, the City assumed a five-year Facility Management Agreement ("FMA") with Jones Lang LaSalle Americas, Inc. (JLL) for the professional management of the Facility. In February 2008, Jones Lang LaSalle Americas, Inc. submitted notice to the City of its intent to terminate its FMA contract effective June 28, 2008. Thereafter, the City assigned the FMA contract to Paradigm Properties of Ohio, LLC (Paradigm), per Ordinance 0479-2008.
The FMA sets the management fee and details the duties of the management company in procuring services, preparing RFP's and soliciting bids for services, oversight of daily building operations, and the direct payment of all operating expenses except natural gas, electric, sewer and water (which the City pays directly). The FMA requires the management company to establish a building operating account from which all building services are paid. Each August the FMA requires the management company to submit an annual building operating budget for funding of building operating expenses for the next fiscal year. The JHC building operating account for 2008 was funded based on the budget submitted in July 2007 by Jones Lang LaSalle and was based on reasonable assumptions by JLL at the time the budget was prepared. However, since that time there have been a number of changes to building services, unforeseen expenses required for the occupancy of the building by City departments, and the completion of emergency repairs due to storm damage that will exhaust the budgeted operating expense fund before the end of the 2008 fiscal year.
One of the most significant increases is in the cost of security services. In April, an RFP was issued for security services to replace the expiring security contract. Wit...
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