Updated January 31, 2013
How does the city go about hiring an outside lawyer or consultant to provide services not available within the ranks of staff? The trial between Urbacon Buildings Group Corporation and the City of Guelph over the $42 million new city hall construction, is a case in point.
Currently, there are 13 litigation actions against the city.
In addition, 17 disputes being adjudicated by the Ontario Municipal Board (OMB) are outstanding. In the past year, four OMB issues have been resolved.
There are three other unspecified legal matters to be resolved. Two other legal matters were resolved since 2012.
Added to the list are 19 actions with insurance protection that involve using legal professionals. The report states that two insured matters have been resolved.
This is enough work to keep a moderately sized private legal firm in business for years at the present growing rate of deputes with the city administration.
The City of Guelph has become a mecca for lawyers not employed by the city. Most interesting is the high number of OMB disputes that points to the failure to encourage business to establish in the city.
The taxpayers are entitled to know the details of hiring outside experts. Also what provisions in the budget are set aside for settling legal matters? These details are almost never forthcoming. If one trusts the annual audited multipage financial statements of the city, the real costs are not readily available.
Take for example the public trial of the City of Guelph versus Urbacon now underway in Brampton. This trial is scheduled to take five weeks to complete. The judge will then study the evidence provided by both sides to reach his judgment. Assessing the costs and damages will occur next October at a separate hearing.
At stake are claims worth millions of dollars. Urbacon is seeking $19 million while the city is counter-claiming $5 million. The dispute arose when former Guelph Chief Administrative Officer (CAO), Hans Loewig, fired Urbacon September 2008 claiming that the company failed to meet completion deadlines.
The city has already spent money in an abortive mediation attempt last fall to resolve the matter. The cost of this process has not been revealed. The two sides failed to agree so the matter has gone to trial.
It is not difficult to figure out that win or lose; Guelph taxpayers are already stuck with extremely high legal costs. And if the city loses, those costs will soar.
So, how does the administration choose to settle or proceed with an action?
Mark Amorosi, Executive Director of Human Resources, Legal and Realty Services, plays a vital role in the analysis and strategy concerning the many legal issues facing the city. And there are a bunch of them.
The city solicitor also gets involved along with CAO Anne Pappert. Where it gets murky is who makes the final decision and does council get involved? Taxpayers have no idea.
One would believe that the Mayor must be involved as well as her governance committee. Does council blindly follow the staff recommendation to hire outside experts and professionals?
Take the case of the hired gun representing the city in the Urbacon case. Derek Schmuck, 55, practises law and resides in Hamilton.
What are the terms of his open-ended contract including his fees? How was he selected? In which area of the law does he specialize? Has he been hired by the city prior to this engagement?
Is he a friend or acquaintance of Mr. Amorosi who also lives in Hamilton? Did Mr. Amorosi hire him?
For all the public knows, Mr. Schmuck may be doing a first rate job defending the taxpayer’s interests. It’s about how he got the job and the process used to hire him.
These are but a few questions to which taxpayers are entitled to know the answers. Spending on outside services has increased exponentially under the Farbridge administration.
The record of obfuscation, lack of clarity in city generated information, and obscured transparency, is the legacy of a tired and arrogant administration.