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Inter Department Correspondence Sheet

TO: City Manager FROM: Andrew Protogyrou

COPIES TO:

SUBJECT: Hampton Roads Transit (HRT)

Hampton Roads Transit (hereinafter HRT) in the near future will besubject to numerous investigations as reported in the Virginian-Pilot to includethe State Attorney General, United States Department of TransportationInspector General, and the Federal Transit Administration. Each of theseagencies has an independent function in an investigation of HRT and the NorfolkLight Rail Project (hereinafter Project) that was subject of the special review ofthe Virginia Department of Transportation, report no.: 2010-211 (hereinafterReport).

Three conclusions were detailed in the report regarding HRT. Of the

three conclusions, one focused on the interface of HRT with the City of Norfolk.Three issues were highlighted regarding this particular interface.

First, the facts affecting the Citys decision making process to enterinto the Funding Commitment Agreement (hereinafter Agreement) to assumethe obligation for completing the Project in the event that the total project costexceeded the baseline cost estimate of $232 million. Distressing in the reportwas the fact that as of May 31, 2007 the obligation of the City of Norfolk appearsto have already been $9 million dollars over the baseline of $232 million. (ReportAppendix Items 3, 4) As of the aforementioned date the City had not signed theagreement.

Second is the chronology of disclosure to cost and completeinformation after the Citys entrance into the agreement. In particular, receipt ofinformation and its dissemination within City Hall regarding liability upon the Cityas to changes and/or upgrades by the City. Each change or upgrade costing Citycapital. (Report Appendix Items 6, 7, 13, 24, 149)

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Third, the issue of communication of the project with Norfolk StateUniversity as it was discussed before entering into the agreement and theinformation received during this time within City Hall that ultimately added to thecost of the project. (Report Appendix Items 20, 21, 28, 30)

HRT in a June 28, 2008 email regarding who will acceptresponsibility for project problems states Not the city, nor any of their staff,because through ignorance or premeditation they are setting HRT up to fail. Wehave turned over more and more control to the City while, at the same time, theyaccept no responsibility. Earlier in the same email the former HRT Chief CapitalProgram Officer says to the HRT Senior Vice President for Development I see alot of decisions made through political accommodation that will eventually be veryharmful to the project. (Report Appendix Item 59)

Council members commenting on the report have been quoted in theVirginian-Pilot saying Investigateat whatever level. Further quotes have

read what ever remedies.. pursuing them to the fullest extent possible. Ofcourse, these mean examinations that would appear to request certain agenciesherein mentioned to do what they are currently being asked to do by HRT.

However, our own investigation into the foregoing issues must occurso that it can never happen again. A renewed sense of confidence in ourleadership for the citizens of Norfolk depends on councils investigation. As toHampton Roads as a whole, we must establish a renewed sense of public trustthrough a sincere examination of the Citys conduct.

I hereby request that as a council the City Auditor, who by NorfolkCity Code 16-61 .shall make such reports as the council... shall require andshall especially report to the council any neglect, inefficiencies or improperconduct with any officer that may be brought to his notice.

Some citizens at this time may say that the city auditor is not theproper person to conduct the investigation on behalf of the City. However, Irespectfully disagree. The auditor has an obligation to conduct an investigationas a matter of law.

As a council we all agree we have a duty to the citizens of the Cityand the region in requesting such an audit. The auditor should examine allcommunications, including but not limited to, emails, telephone conversations,memoranda and contracts entered into by the City with HRT and any other entityinvolved in the Project. Further, all individuals involved whether Council Membersor City Hall employees should be free and comfortable to discuss their facts,beliefs, and opinions of the above referenced issues noted within thismemorandum and also to offer to the auditor ways to rectify these situations inthe future so that these issues or matters do not result again at any time.