Can this city continue to afford $15 million mistakes?

Posted September 14, 2014

When the Chief Administrative Officer, Ann Pappert, is quoted in the Guelph Tribune that the end-cost of the new city hall and provincial courthouse is $57 million, citizens must now wonder where the truth lies.

The contract for the work was $42,000,000 and awarded to Urbacon Buildings Group Corp in 2006. According to Ms. Pappert, that’s an increase of $15 million, and citizens are now asking what is the cost of those overages?

They might also ask why, in eight years, the two Guelph newspapers failed to investigate the Farbridge administration’s handling of this major project. Neither paper sent a reporter to cover the five-week trial held in Brampton last year. Indeed, Scott Tracey, the Mercury reporter responsible for covering city hall for seven of the Farbridge years is now a candidate in ward four. Could this be some belated form of redemption?

Let’s dig into it.

The project started to fall apart within weeks of the beginning of construction. The newly-elected Farbridge administration wanted changes in the contract to bring environmental standards to a higher level than the original contract.

Contract law states that a 10 per cent change in the original contract price requires a renegotiation of the original agreed price, in this case $42 million. That did not happen. Nor did the city use the provision in the contract to mediate differences.

Instead, after demanding more than 300 changes in the structure, and Urbacon being unable to meet a completion deadline, the city ordered the company off the job site. At that stage, according to testimony at the civil trial, the new city hall was 95 per cent complete. Due to the flood of change orders, work had not started on the renovation of the old city hall. That project was part of the original contract. There was a serious breakdown of communications between the architect, Urbacon and the city.

Following five weeks of testimony, Judge Donald MacKenzie found that the city wrongfully dismissed Urbacon. The contractor had sued the city for $19.2 million.

Recently the city announced it had settled with Urbacon for $6.635 million. It then announced its legal costs being $2.3 million. Still to come is a costs settlement with Aviva, the bonding company the city sued and lost.

So how does one figure where the real project deficit of $15 million went?

Some $8.935 million are current settlement costs. That leaves $6.065 million of unexplained costs.

The city hired two construction companies to complete the Urbacon contract. Those costs have never been revealed by the administration.

Then there are legal costs that the city says cost $2.3 million but does not provide details of the breakdown. For example, how much was paid to Derek Schmuck, the Hamilton Lawyer who acted for the city in two trials? There was the original Urbacon trial. Then the city requested the courts to delay the damages portion of the Urbancon trial until after the October 27th election. They lost on all counts. How much was paid to the lawyer who advised the city to terminate the Urbacon contract?

What were the costs of city staff supporting the city’s cases before the courts?

How much was paid to subcontractors after Urbacon was kicked off the job?

How much were the architects paid to act as overseers and mediators during the construction period?

Is it true that there was an HST charge of 13 percent on the $15 million overages totaling $1.95 million?

What were the costs associated with the creation of Market Square? What were the totals of the donations to create the skating rink and water splash pool? What are the annual operating costs associated with Market Square?

What are the annual operating costs of maintaining the “living wall”in the reception area and green roof on the new city hall?

Citizens will never know the real costs of this abortive project. Because the city administration mingles budgets and accounts to the extent that no one really knows the real costs and probably never will.

It certainly calls for a new management team to clean up the financial mess that has been created by Karen Farbridge and her elected cohorts.

To spin their way out of this situation, the mayor says that this debacle will not cost the taxpayers because the costs will come from reserves and will be replenished in five years.

Tell us again, Madame Mayor, what is the source of funding for your spin on this??

And this bunch is seeking your support on October 27.

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2 Comments

Filed under Between the Lines

2 responses to “Can this city continue to afford $15 million mistakes?

  1. Glen N. Tolhurst

    It would appear that the “Karenistas” do not have a clue as to the meaning of “open” and “transparent” as applied to their actions. Perhaps a resounding defeat for them at the ballot box will aid in their belated comprehension. Let’s hope the electorate votes for change and a better Guelph.

  2. Len H.

    Just wondering. Is anyone circulating “Anyone but Farbridge(ites)” property signs? Love to have the concession rights to that.

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