Unlimited Billing and Questionable Practices for GAI and Tom Cloud

We've done some further research into the relationship between Attorney Tom Cloud, a partner in the Gray/Robinson Law Firm, and Mr. Gerald Hartman, Vice-President of GAI Consultants, Inc., both from Orlando.  They have been working together as a team for many years in handling sewer/water disputes and consultations for towns in Florida.  Like ambulance-chasers, these guys refer business to each other when they see a vulnerable situation where there is a lot of money to be made.  Tom Cloud uses Gerald Hartman as an expert witness in his legal disputes in the courts, and Gerald Hartman recommends Tom Cloud when his contracts require legal advice.  Many of the small municipalities do not have experienced city officials, and rely blindly on the advice of these "highly experienced" professionals with very impressive resumes.

But this experience comes at a price, and in most cases this price is very unpredictable, even if a contract is signed.  As in the case of a joint utility committee that was composed of Indian River County, the Town of Indian River Shores, and the City of Vero Beach hiring GAI to provide a comprehensive evaluation of complete consolidation, partial consolidation, or status quo for the water, wastewater, and reuse systems that exist within the three jurisdictions. The County decided not to participate in the study, and Vero Beach and Indian River Shores entered into separate contracts with GAI Consultants and Attorney Tom Cloud as a legal consultant. 

GAI was retained by the Town of Indian River Shores on July 22, 2010 to negotiate a franchise agreement and purchase and sale agreement for the Town.  On August 17, 2010 The City of Vero Beach entered into a similar agreement with GAI.  Here is a link to the "estimated" costs of these services, both from Tom Cloud and Gerald Hartman for GAI.  Utility Management Consulting Fees.  Page 2 of the link gives the background for the study, and Page 4 shows the agreement entered into with the City of Vero Beach.  Mr. Hartman then approached Tom Cloud, of Gray/Robinson Law Firm to represent GAI Consultants regarding certain services for the City of Vero Beach.  If you scroll down to Pages 9-11 you will see Tom Cloud's letter addressed to Gerald C. Hartman of GAI Consultants, Inc. discussing his fees for this particular case.  He states, "an initial estimate would be a range between $25,000 to $35,000, not including litigation fees and costs."  This contract is very open-ended since his, "firm charges for services on an hourly basis."  He goes on to say that, "I will be primarily responsible for all matters, but we reserve the right to utilize other members of the firm whenever, in our discretion, we deem it appropriate."  "Further, computer research, and other technology may also be utilized if and when appropriate and in your best interest.  You will be billed for the use of the same."  He also states that, "we have a legitimate business concern in being paid in a timely fashion."

On page 1 of the above link, the GAI Proposal to perform Utility Management Consulting Services is in the amount of $49,900.00.  Page 8 of the same link shows the rate schedule for GAI Consultants, Inc. Environmental Group.  GAI entered into an agreement with both the Town of Indian River Shores and the City of Vero Beach separately and simultaneously over the same issues.  Conflict of interest issues were raised prior to entering into these contracts, but GAI insisted that this was not going to be a problem, due to his professionalism.

On November 18, 2010 the VeroBeach32963.com website published the following article:
Double Billing Issues with GAI  This article reported that invoices GAI Consultants sent to the Shores and to Vero had the same 4 consultants working for both parties, including possibly billing them for reviewing work the Shores had done themselves.  Based on the article in the VeroBeach32963.com article, Shores Councilman Gerard Weick made a motion which passed, to hold up payment until the GAI Consultants clear up the charges at the October 28, 2010 Town Council Meeting.

Statements were also made that GAI favored the City of Vero Beach in their evaluations.  In this link, 3-Way Water/Sewer Talks May End in Consolidation, "GAI's Gerald Hartman, an engineering consultant who is recommending Shores residents cast their lots with Vero, glossed over two important factors..the financial strength of the competing bidders and projected long-term rate stability."  "GAI did not even raise the fact that Vero's rates were slated to rise drastically over the next five years until the last City Council rescinded the rate increases.  The decision was made with no financial analysis or modeling of the aging system's capital needs going forward."  An angered County Commissioner, Peter O'Bryan, also noted that GAI provided the Shores proposal to Vero Beach before any member of the Shores Council got a look at it.

"The county claims the Shores' consultant, GAI, sent the county a proposal so riddled with legal quandaries and impossible deadlines that it could not even respond."  "The proposal as written would have required the county to purchase the Town's assets, purchase Vero's assets in the Town and be ready to service the Town by Jan. 31, 2011, not withstanding the fact that Vero Beach still has a franchise to serve the Town until Nov. 2, 2016.  County Commission Chairman Bob Solari, directly connects the problems with the proposal sent to the county to the fact that GAI is working for both Vero Beach and Indian River Shores.  "We certainly do see it as a conflict of interest," Solari said.  "In any event, by any standard that I grew up with in N.Y. and have come to understand in Florida, in no way you can say this is in any way a level playing field."

"We are very anxious to work with the county to discuss the consolidation of the water and sewer systems," said Vero Beach Mayor Jay Kramer, noting that he sees consolidation as a way to "drive the costs down."

"Throughout GAI's presentation to the Town, Hartman reminded council members and the audience of his four decades of experience, his credentials as a certified appraiser and his vast knowledge in the field of utilities." (Sound familiar??)   "That only led critics to suggest Hartman should have known better than to write a flawed proposal to the county." 

With Mr. Hartman always touting his expertise, will anyone question his "facts" and "findings"?  Why did Mr. Hartman write a study blatantly favoring Vero Beach and did not include key factors which would have substantial impact on the study?  Were they paying him more money?  Do we really want a company that operates with questionable ethics working for Polk City?  We think NOT!!  Is Mr. Hartman going to approach Polk County to utilize his expertise for a utility study next?