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~ ~ ~ , ~~~ <br />' <br />___ ____ ___ __. to get us from the original starting point to today, and from today to the end of construc~ion. This gave <br />' us a check on the level of services required. We then asked the consultant to give us the ma~icetplace <br />fees for such services if being provided by his own company or "brand x" The consultanYs fees <br />matched those we had heard from others in the industry and from our financial and legal counsels. <br />There was substantial differential between the marke~lace and Mr. Berre~s proposed fee. The <br />' difference could amount to $1-million dollars. <br />Obviously, as public servants, Randy Curtis and I could not by any stretch of the imagination justify <br />' such a large discrepancy and conciuded that, if Mr. Berrey was unable to match the marketplace fee, <br />we should negotiate a settlement with Mr. Berrey for services performed and retain the servioes of <br />another project manager at the maeketplace rate to oomplete tlie project. Mr. Bemey decGned to accept <br />' a lower fee, and thus the impasse. We are now entering tt~e settlement negotiation Qhase. The ac~ual <br />settlement may exoeeci what tfie ma~lcetplace compensation for those senrices would have bcen, but <br />inasmuch as we were all wo~lcing together in good faith, ~nd oonsidering fhe t~se of litigaation, a <br />somewhat higher compensation may be warranted. However, ou~ beginning pasipon will refled the <br />' ma~icetplace value of tl~ose services. The actual negotiations will be handled by our legal oounsels <br />inasmuch as Mr. Bemey has potential ongoing intere.sts a~ the project upon whidi he and Randy Cufis <br />and I must be able to work oo~tively, for the best ~te~e.st of tlie project, and having Randy and I <br />' negotiate the settleme~t could be oontrary to that ongoing relationship. Be~ Fethe~ston Hn'll. therefore, <br />be Salem TransiYs negotiator. I have inf+ormed FTA of tt~is issue and we do not f~+esee any difficul6es <br />there. In fad, our questioning of the use of public funds to pay a potent'rally inflated project <br />management fee was in our favor. rather than the opposite. <br />' The SJ artide said we were "dumping" Mr. Berrey. That is not true. There is an ho~est differe~ce of <br />opinion on the oompensation i.ssue. How Mr. Berrey values his time and servioes is his business and <br />' we do not in any way question his personal value. Our ~esponsib~ity, however, is to spend the public's <br />money in acoordance wffh aocepted marketplace norms and it is thene that the two value systems <br />collide. Randy Curtis and I do not feel we have the prerogative nor justification to aocept a fee level that <br />' outpaces the marketplace, even if we believed personally that Mr. Berrey is worth i~ <br />While we are negotia6ng a settlement, which we have proposed go to binding art~itration ff we cannot <br />~each mutually acceptable agreement, Randy Curtis and I will assume the pnojed ooordinatior~ ro1e <br />' previously perFom~ed by M~. Berrey. We will begin developing an expedited selection process to ~tain <br />the servic~s of another project manager, this week It will probably take us three weeks to a month to <br />final'¢e the selecfion, however. <br />' Mr. Berrey still has a oontract with Marion County to complete the th~ee aoquisiti~ons the Cainty needed <br />to have ownership of the entire Senator Block, and to act as the County's agent in handling all the <br />relocation of businesses and residents o~ the block. In addition, the County has a cuRent contrad witli <br />' Mr. Berrey to act as their agent in leasing the Count~s expansion space witliin the new building. <br />Though Salem Transit also has expansion spaoe to lease, we do not cu-rently have a contract with <br />anyone as our leasing agent. We will not do so until the current issues a~e resolved. <br />' Mr. Ben-ey also has the first right of refusal to own the private retail faa'lities on the ground floor of <br />Courthouse Squa~e. In order to retai~ this right he will be ~equired to meet oertain timelines with resped <br />' to his financial commitrnent to that pordon of the project. Randy Cu~tis and I are woiicing on 'Wvhat iP <br />plans in the event Mr. Berrey deades not to participate or is unable to meet the financial dmelines. <br />• Page 2 <br />Co~'idential Memo <br />