By Doug Hallett
Unless the city can reach a financial settlement with Urbacon before then, a trial to determine the amount of damages to be paid to the fired city hall contractor is set to start on Oct. 14.
“The city is prepared to negotiate with Urbacon in hopes of resolving the matter and minimizing the financial impact on Guelph taxpayers,” city CAO Ann Pappert said in a news release issued after council got an update from staff behind closed doors on Monday night.
During the open part of Monday’s council meeting, Mayor Karen Farbridge read an apology to Guelph residents for the fact that the city hall project will exceed its budget as a result of the lawsuit.
Her statement, which she said had “the support of Guelph city council,” drew a stinging response the next day from Coun. Cam Guthrie, who is also running for mayor.
If no prior settlement can be reached with Urbacon, it’s expected that a trial to determine damages would last three to four weeks. The result of the trial, including the amount of damages to be paid to Urbacon, would likely be released by the court in late 2014 or early 2015, the news release said.
“If the city decides to appeal any ruling in the case, the appeal would take place after receiving and reviewing the result of the damages trial,” it said.
Toronto-based Urbacon Buildings Group Corp. was awarded a $42-million contract in 2006 to be the general contractor for the construction of a new city hall and for the conversion of the old city hall into a provincial offences courthouse.
The contract included about $32.5 million for the new city hall and $9.5 million for the POA courthouse. After many delays in the city hall project, the city fired Urbacon in September 2008.
Urbacon filed a $20-million breach-of-contract lawsuit against the city in October 2008, and a lengthy trial was held last year.
In late March, Justice Donald MacKenzie of Ontario’s Superior Court of Justice ruled in Urbacon’s favour, and the judge released the reasons for his decision on June 17. He said the city didn’t have the right to terminate Urbacon’s contract.
No matter what council’s next steps are regarding the lawsuit, “this capital project will cost more than was budgeted for,” Farbridge said Monday.
“For that, on behalf of the City of Guelph, I want to apologize to the people of Guelph,” she said.
“The construction of city hall has involved four terms of council and many senior city employees, some no longer employed with the City of Guelph. Collectively, we are responsible for this project,” she continued in the prepared statement that she read out Monday, which was also posted on her city hall blog.
“There have been many lessons learned as a result of these events,” Farbridge said. “While we can’t undo what happened with the city hall project, we can – and are – making sure it’s not repeated.
“I personally believe everyone at the city acted with the best intentions for the community. The motive behind the contract termination was to protect taxpayers from a project that had gone off the rails, and a contract that also included the renovation to old city hall to become a courthouse – a project that had not yet begun. None of this changes the fact that the project has exceeded its budget.”
To minimize the impact on local taxpayers and protect the city’s financial position, the additional costs arising from Urbacon’s lawsuit will need to be accommodated within the city’s “existing capital budget envelope,” the mayor said.
Given the size of the additional costs, some other projects in the capital budget might have to be delayed as a result, she had said in an earlier statement.
“City hall, Market Square and the courthouse that is housed in the old city hall are serving the community well,” Farbridge concluded in her statement.
On Tuesday, Guthrie had this to say about Farbridge’s statement, in a news release headlined “An apology?”
“Mayor Karen Farbridge’s Urbacon apology regarding the enormous cost overruns to taxpayers lays blame everywhere except where the blame belongs,” the release said.
“She attempts to lay blame on everyone else, hoping that by sacrificing as many people as possible (and as far back in time as possible) it might minimize the consequences of the actions taken under her watch.
“The fact is that the termination of Urbacon occurred under Karen Farbridge’s leadership as mayor.
“So now, grasping at straws, she frantically searches for yet another excuse that she hopes might work. And that is to blame the previous four terms of council.
“As a result of her continued lack of leadership, I’m extremely concerned for the taxpayers of this city.”