February 7, 2014 Chairman Ketchum: Please accept this letter as my closing communication as OOCEA Executive Director, in fulfilling my duty to the people of Central Florida. While my time there was brief, the issues we dealt with are serious and require documentation and follow up by the Authority. I identified five pressing issues that demand immediate Board attention: 1) Innovation Way – As I discussed with you and the other Board members in your briefings, the proposed agreement as it now stands, that I had the Board delay action upon, will have a severely negative impact on the finances of the Authority. The costs to the Authority for this interchange have increased almost $20 million from previously programmed costs. I advise revisiting the terms of this agreement. Per my OOCEA staff, this item was rushed on the agenda just prior to my starting work, at the request of Orange County staff, under the premise that failing to do so would hold up a major land use amendment transmittal. Senior County staff later relayed directly to me that there was no potential delay, therefore no need to rush. A previous version of this agreement had the County contributing a fair share of almost $6 million due to the need for local access, and to increase the development potential of adjacent properties. However the most recent version of this agreement had the County contributing only $500,000, thus shifting a significant burden to toll payers that should likely have been paid by the developer or by the County. I was advised that the County wanted to redirect this money towards incentives to bring other businesses to Central Florida. Whatever the case may be, jeopardizing the good credit of this authority and removing capacity for future road construction is not good policy, and using OOCEA toll payer funds to give to private businesses is a terrible precedent. 2) All Aboard Florida Funding Shortfall – The All Aboard Florida agreement that you and the Board approved under Mr. Crumit’s direction has a requirement that OOCEA fund a $58 million line item, that staff indicated internal financial plans and models show OOCEA does not adequately have the resources to satisfy. Further, staff indicated that OOCEA will not be able to make this payment at closing without either seriously negatively impacting the work program, possibly delaying the Wekiva Parkway, or drawing down reserves that are required to bolster the Authority’s bond ratings, to keep borrowing costs low.
I was advised that Mr. Crumit contended that he had a “side deal” wherein someone, possibly the FDOT, a private developer or All Aboard Florida, would fund this shortfall. In my brief due diligence I found no document or agreement to this effect. As such, the OOCEA is the only party contractually bound to fund this as of now, and barring a goodwill contribution from the above, you must begin preparations to handle this pressing obligation. Combined, the Innovation Way cost increases and All Aboard Florida budget shortfall account for $78 million in unprogrammed commitments. I have also been made aware of additional right-of-way acquisition cost shortfalls that may total tens of million more dollars. It is imperative that a plan be developed to deal with these costs, as the implementation of the major projects in the Authority Work Program, so critical to our economy here in Central Florida, is likely to be severely negatively impacted. 3) Back office/CCSS Consolidation -‐ Under your direction and as the Executive Director for OOCEA, I voted on the short listing process for the CCSS. I do not believe this will negatively impact the process but you should be aware and confirm that is the case given the specifics of my departure.
4) SB 230/Central Florida Expressway Legislation – The Board’s absence in taking a position on this issue has potentially done extraordinary damage to the Authority. Specifically, your failure to communicate with Senator Simmons a consensus Board position, and concerns that proposed language related to the Osceola County Expressway Authority could allow them to remain independent, jeopardizes the very idea of a regional authority.
5) OOCEA Senior Leadership – During the process of my selection as Executive Director, your actions as chairman, the Mayor’s comments about EEOC policy and the intervention of the State Attorney have sufficiently clouded the hiring process to a point that I recommend you start over from the beginning, but act diligently.
Your actions and conscious delay of the process, along with Mr. Crumit’s termination of the Chief Financial Officer prior to his departure, have left the ship completely leaderless for many months during a critical time in the Authority’s history. First hand I have seen that morale is damaged at every level of the OOCEA, and a full-‐time leader must be brought in free from collateral damage.
I would also offer the following important recommendations moving forward: A) Comprehensive External Audit of OOCEA Financials – The Board should immediately retain and empower an outside auditor to come in and fully understand the funding commitments and capabilities of the Authority. I had hoped to be able to help the Authority avoid raising tolls. It appears that what you’ve done over the last year or so has now boxed you into either raising tolls automatically as you have already voted to do, or delaying
projects that are crucial to our economy and to which you have already committed the Authority – and perhaps both. Absence of a disciplined management approach and a lack of institutional control, combined with a lack of information as to the extent of these commitments led you to this point. I would advise getting real clarity on the issue before further damage is done. B) Obtain an All Aboard Florida Deal Summary – The Board must be provided with a comprehensive “road map” of expenditures and commitments the Authority has made as it relates to this important and valuable project. I have never seen or been involved with a major project so lacking in summary documentation and analysis of the comprehensive deal. Despite my many requests to various staff members and your consultants, I received nothing even approaching such a list.
General Counsel Passiatore jokingly referred to it as “Max Crumit’s Rubik’s Cube, existing only in his head”. Unfortunately this description, combined with the possible “side deal” to substitute $58 million in other people’s money for money to which OOCEA is contractually obligated, paints a terrible picture of a lack of management discipline, institutional control, transparency and accountability to toll payers, citizens, bond rating agencies and the bondholders. C) Immediately update the 5 Year Work Program – The lack of leadership over the last 6 to 8 months has allowed the annual update of the work program to languish. You must have a financially feasible work program to guide the Authority’s efforts, financial plans and investments. This lack of leadership is contributing to the instability in the overall financial plan.
Finally, I would like to comment on your actions related to my hiring as the Executive Director. First, the manner in which the job search was managed was embarrassingly bad for the Authority on many levels. One only has to count the number of news articles and broadcasts much less read or see them all, to get a feel for the problem. You joined the mayor in supporting Max Crumit as director, who oddly enough would have been unqualified to be rehired by the Authority under the qualifications that you set forth in the hiring process. You then allowed candidates to be shortlisted and vetted that did not meet the strict interpretation of those qualifications. You further made those qualifications an issue in my hiring, even after you had months earlier personally told me that I’d make a fine Executive Director for the Authority if I applied. Your actions led me down a road that you must have known was a dead end. The hiring process dragged on far too long. You let months go by when nothing happened. Morale at the Authority was damaged, deals weren’t completed, the CFO has not been replaced, the Work Program Update has lapsed, deadlines were missed
and the opportunity to constructively participate in a discussion of the future of the Authority with the legislature has perhaps been lost. After a majority of the Board voted in support of me (whom I believe that in this process and in general have been trying hard to do the right thing) you negotiated with me in what appears to be bad faith. After sealing a final and binding employment agreement with me, noting to the Board that we had “successfully negotiated a contract”, having me start at the Authority and formally act as Executive Director for several days including handing over full access to staff, consultants and all sensitive information, you then proposed an amendment to my employment agreement substantially altering and repudiating the agreement and terminating my employment. This has damaged my family. We spent a large amount in legal fees to establish a blind trust and negotiate the employment agreement you later repudiated. I walked away from my final session in the legislature, forfeiting almost a full year’s participation. Those are opportunities and costs to us that are wasted. More egregious than all of the above though, appears to be your backdoor dealings. In comments you made to me, and which I subsequently confirmed through others, you indicated that you worked with the State Attorney in advance on his letter to the Authority. You claimed to have “crafted” the Ashton letter with him, attacking my employment and using me as a pawn in requesting the Board hold off on changes in leadership (meaning as you said to keep you as Chairman), and to hang a cloud over my employment as negotiated. I could only surmise that your intent was to lay the groundwork to dismiss me in short order. This behavior is morally and ethically wrong, as well as wrong on so many other levels. The people of central Florida deserve to know these things, and I believe deserve much better. Respectfully, Steve Precourt, P.E. CC: Vice-‐Chairman Scott Batterson FDOT District Secretary Noranne Downs Board Member Marco Pena Orange County Mayor Teresa Jacobs