Posted July 21, 2014
This is a three-part series relating the circumstances that led to the Urbacon trial and the damages that taxpayers will face in the coming years. Part two will be published tomorrow and part three the following day. GB
Our story begins in 2005 when the city administration, headed by Kate Quarrie, finished clearing up the fiscal debris left by the defeated Mayor, Karen Farbridge.
This included settling the Nustadia problem, concerning the new arena, now called the Sleeman Centre on Woolwich Street that cost taxpayers some $4 million. Also shutting down the smelly wet/dry waste processing plant originally set up by the previous Farbridge administration. This ended up costing $40,000 in provincial government fines and the firing of the plant manager.
The decision was made by the Quarrie council to build a new city hall on the site of the former memorial arena, adjacent to the historic existing city hall.
The administration negotiated with the province, and the city agreed to convert the old city hall into a provincial offenses court as part of the plans to build the new city hall.
A building committee was struck composed of councillors Ray Ferraro, Kathy Downer, and Mayor Kate Quarrie along with two appointed members from the public. The key staff people included were Chief Administrative Officer (CAO) Larry Kotseff, Chief Financial Officer (CFO) David Kennedy and city solicitor Lois Payne.
Reporting regularly to council, the team finally completed its needs study and tenders were issued. In 2006, the winning tender was awarded to Urbacon Building Groups Corp of Toronto (Urbacon) in the amount of $42 million.
In the fall of 2006, Karen Farbridge and her supporters defeated the Quarrie council. This set the stage for the new council to manage the city hall project.
Both parties in the contract agreed to allow the architectural firm of Moriyama and Techima (M&T) to act as neutral middlemen. This meant that change orders or directives were filed by the city to the neutral observers, for execution by the contractor. On paper this made sense as the architects had designed the new building.
Suddenly, in the spring of 2007, the city dismissed both CAO Larry Kotseff and CFO David Kennedy. This action resulted in a subsequent settlement of more than $500,000. The cost of the project now reached $42.500,000.
The question is why? Why were the key city executives who advised council on the most important aspects of the Urbacon contract suddenly dismissed?
The reasons for this, including the payments made to each employee were never revealed. Many months later the dismissal payments were revealed under a Freedom of Information Act procedure. The reasons for the constructive dismissals have never been revealed by the Farbridge administration..
This was the start of how the Urbacon project was going off the rails.
Almost at the beginning of construction in early 2007, Urbacon ran into difficulties in removing the old arena structure. The contract called for a wall of the arena to be integrated with the new city hall.
This resulted in serious delays in communication between the three parties, the city, architects M&T and Urbacon. The city demanded a number of change orders in keeping with the council’s determination to make the new city hall environmentally state-of-the art.
These change orders were funneled through M&T who passed them through to the builder. Urbacon for its part said the drawings were inadequate and the proposed changes involved major structural changes.
In other words, the original contract was rapidly being changed by demands of the city through change orders that eventually numbered 340 before the building was completed.
While all this was going on, the citizens were blissfully unaware of what was going on.
To keep the lid on costs, certain elements in the original contract were removed, including sound deadening materials.
The delays created such a problem that the city acknowledged its responsibility and agreed to pay Urbacon $500,000.
This action increased the cost to $43,000,000
Tomorrow, the city fires Urbacon by ordering them off the job and police are sent to back up the decision.