Finally, the real cost of the Urbacon debacle is starting to add up

Posted June 8, 2015

It now appears there is some sort of settlement with the Aviva, the completion bond holder for the city hall project who sued the city for $4 million, and architects Teshima and Moriyama who sued for $2 million. No numbers yet but a promise to announce them when negotiations are completed by the middle of the month.

The newspaper report said that the city paid an additional $2.3 million to settle with subcontractors hired by Urbacon. This revelation coupled with the actual settlement with Urbacon of $8.9 million boosts the cost to $11.2 million.

Beside the aforementioned settlements, there are two outstanding costs yet to be revealed. The first is the legal bill from Derek Schmuck, the Hamilton lawyer, hired by the city, to represent its case before Justice Donald MacKenzie. It is safe to assume that the city’s outside legal costs will match or exceed the $2.3 million paid to Urbacon for its legal representatives.

That could bump the costs to $13.5 million or more.

The other outstanding issue, yet to be revealed, is how much it cost to complete the new city hall after Urbacon was fired in September 2008. Burlington-based Alberici Construction Ltd. was hired to do the job. The circumstances of that hiring and the costs are yet to be revealed.

Similarly, Collaberative Construction of Cambridge was hired to complete the conversion of the old city hall into a provincial offences court. Again the method of selecting these two firms or the terms of their contracts, remain unknown to the citizens.

Keep in mind the original contract for both the new city hall and the conversion of the old city hall was $42 million. Chief Administrative Officer, Ann Pappert, was quoted as saying the final cost of the project would be $57 million.

If what she says is true, then it appears the completion cost of finishing the two municipal buildings would be $1.5 million. That being the case, why did the city countersue Urbacon for $5 million? It was dismissed with costs.

How both these firms were hired is in question. Were there procurement tenders issued? Were the contract costs fixed or open-ended on a cost-plus basis? There is no doubt time was of the essence as there were leases for other private buildings, housing city staff, to be settled.

When all the accounts are settled, it appears the cost of firing the city hall contractor, Urbacon Buildings Group Inc, could reach $18 to $20 million over the original contract cost.

That’s an increase of some 42.8 per cent over the contract price of $42 million.

Yet there are people sitting on council today who were part of the decision to fire Urbacon and are still denying any participation in that 2008 decision. They include Leanne Piper, June Hofland, Karl Wettstein, and Mike Salisbury.

The people voted to fire the mayor. Two of her cohort councillors quit, Lise Burcher and Ian Findlay and one, Maggie Laidlaw, was defeated by two of her former friends, June Hofland and Phil Allt.

It doesn’t change anything. The mayor’s fingerprints are all over city hall and her policies are being steadfastly maintained by a majority of newly elected cohorts. They are still adhering to the Farbridge agenda that most people voted against.

This includes a 10-year bicycle lane increase plan costing $3 million; a 20-year waste management plan that is short of numbers but long on promises when it is ever published; a secondary downtown plan, the cost of which is not known.

It’s almost like Ms. Farbridge is still in charge, gulp!

That’s why we received a 3.94 per cent property tax increase this year instead of the maximum of 2.4 per cent promised by Mayor Cam Guthrie during his campaign.

The property tax increase in Oakville and Kitchener was 1.7 per cent.

Maybe we should amalgamate with Kitchener and Waterloo.






1 Comment

Filed under Between the Lines

One response to “Finally, the real cost of the Urbacon debacle is starting to add up

  1. Glen N. Tolhurst

    When the final cost of the Urbacon fiasco is tallied and the city has to pay up while having no reserves to draw from, since they were plundered for the initial $8.9 million settlement, will the tax and spend Karenista council rump just tack it onto their already outrageous 2015 tax increase and continue it for 5 more years?
    Also, if we amalgamate with K-W, can we trade the “lowbridge” for an LRT spur line?

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