The two main contenders for mayor in this fall’s civic election have issued statements on Monday’s court ruling that the city is liable in a lawsuit involving a contractor fired in 2008 from the project to build a new city hall.
The judge ruled that the city is liable in the case, but he hasn’t yet released the reasons for his decision.
In a news release Monday, mayoral candidate Coun. Cam Guthrie had this to say:
Like a broken record, yet again, Guelph taxpayers under the Farbridge leadership are on the hook,
The city lawsuit against Urbacon, the original contractor for Guelph’s new City Hall and Provincial Offenses Court Building, has been quashed by a judge. Reasons have not yet been revealed, but the decision is clear—the taxpayers have lost.”
Instead of working with the contractor to get the job done. Our mayor, some members of council and administration fired Urbacon, which launched a lawsuit against the city, for damages and thrust the corporation into a legal battle for years.”
Noticeably absent from the city’s media statement today are comments from Mayor Farbridge. She may not be commenting on this defeat today, but the taxpayers certainly are.
I’m truly concerned Guelph ratepayers could be in for another huge legal bill like they were when Mayor Farbridge was involved—using taxpayers money—with the construction of the Wal-Mart store in Guelph’s north end. That unnecessary battle, cost the taxpayers hundreds of thousands of dollars along with the diverted attention and focus of our staff and other resources for years.
In an entry on her city hall blog Monday, Mayor Karen Farbridge had this to say:
Today’s court decision is extremely disappointing. The ruling has been posted on guelph.ca.
Council supported the advice given by the administration of the day and is disappointed that the Court decided against the City’s position.
At this time, we are unable to comment much further on this matter until we have received and reviewed the reasons for this decision – they have not yet been provided. I appreciate this will be frustrating for the community. Once we have the reasons for this court decision, there will be further comment.
The mayor elaborated on her blog on Tuesday:
We have a ruling without the reasons on the Urbacon litigation. This makes it challenging to provide responsible comments that won’t put the City further at risk.
However, from the beginning I have found the whole situation infuriating and the cost of this litigation more than discouraging – long before the court released its ruling.
The previous term of Council inherited a contract that was poorly written for a project of this size and complexity. Communication broke down. Deadlines were missed and deficiencies accumulated.
Despite considerable effort, the financial and operational risk to the City simply became unacceptable and our administration believed they had no choice but to take control of the project. We had leases with other landlords to manage and moving an organization our size while keeping the operation running is a monumental task to coordinate.
The City took the step to terminate the contract with Urbacon – with external legal advice – because we believed it was in the best interest of the community and taxpayers. Staff needed to get the job done to move in and to avoid more of the same on the renovation of the former City Hall.
None of this is new. It was all part of the court proceedings. And it may be that this context is simply not relevant to the ruling. It all comes down to the 2006 contract and how it protected – or not – the City of Guelph and its taxpayers.
The subsequent contract for the Court House was structured differently, to suit a project of this magnitude, and it came in on time and under budget. The risk of conflict between the architect and the contractor was mitigated through a design-build contract. We used a design-build-operate contract on the Organic Waste Processing Facility which also came in on time and under budget.
Since 2006, the City of Guelph has tendered almost 400 capital projects valued at over $300 million and less than 2% of those tenders, including this one, were sent to litigation.
Many projects come with challenges but none of them have compared to this.
In July 2006, Toronto-based Urbacon Buildings Group Corp. was awarded a $42-million contract as general contractor for the construction of a new city hall and for the conversion of the old city hall into a provincial offences courthouse. Following many delays in the city hall project, city hall fired Urbacon in September 2008.
Urbacon filed a $20-million breach-of-contract lawsuit against the city a few weeks later. The city filed a $5-million counterclaim lawsuit against Urbacon in 2008, but the counterclaim was dismissed by the judge as part of Monday’s written ruling