City receives $1.5m cash, contractor $1.75m, in pier legal settlement

Burlington pier legal feesThe city has received $1.5m cash, and the original pier contractor $1.75m cash, in a legal settlement reached in June related to the pier construction.

In addition, the city won’t be required to pay out $500,000 in holdbacks owed to one of the parties in the lawsuit, bringing the total value of the city’s settlement to $2m. The holdback money was already folded into the pier budget and used to complete the pier.

The original pier contractor, Harm Schilthuis & Sons (HSS), also received additional amounts from various parties to the litigation, bringing the total value of their settlement to $2.4m.

The city was one of nine parties involved in mediation on June 18 and 19 in Toronto related to the pier’s first construction contract.

Several of the parties paid into a “pool” of dollars, out of which some parties were compensated. The details of which parties paid into the pool, and which received money from the pool, was not immediately released, other than that the city and the original contractor are both recipients of funds.

The agreement stipulates that no contribution in any form to the settlement shall be deemed an admission of liability, and any such liability is denied.

The city’s cash from the settlement will essentially cover the city’s external legal costs which were $1.3m before adding in the recent legal costs from the mediation. Once the final legal bill is submitted, the total amount of external legal fees are expected to be released.

The pier cost $14.4 million, plus external legal fees, up from the original budget in 2006 of $6.2 million. The Canada-Ontario Infrastructure Program funded $4.4 million of this amount while Halton Region provided $2.5 million.

Resources:

  • Read the city’s press release here
  • Read HSS’s press release here: HSS Press Release June 2014
  • Read Hamilton Spectator article here
  • Read Inside Halton article here
  • Read Burlington Post editorial here
  • Watch CHCH coverage here

My Take: I supported the settlement in a unanimous decision at council as the best we could achieve under the circumstances – the full story of which has yet to be told.

Now that the legal matters have been settled there is no reason we can’t begin to set things right and move forward as a community. I believe that in order to do that, we must apologize to residents and the original contractor for how we’ve handled this situation. Second, we must release information that was kept confidential while the matter was before the courts. It’s the right thing to do.

Recognizing that some of the decisions were made by previous councils, and that hindsight is 20/20, this council knew about concerns raised regarding the design of the pier, had multiple offers by the original contractor to redesign and complete the project, and knew retendering would add about $5m to the cost, for a total cost overrun of $8m. I did not support the retendering, as I believed then, as I do now, the quickest and most cost effective way to complete the project was to work with the original parties.

I think where this project got off track was that city councillors failed to remain neutral and objective after the concrete pour failed, and publicly blamed the contractor. That hampered council’s ability to objectively assess the multiple offers made by the contractor to make design changes and complete the pier. When the project was retendered, design changes were made. Though no parties to the settlement are admitting liability, people will draw their own conclusions about the design changes and the settlement paid to the original contractor.

We also owe it to the public to release the offers made by the original contractor, including the first offer made in September 2010 before the last municipal election, and subsequent offers made in this term of council. What were those offers? Was the cost less than the cost of retendering? You deserve to know, for the sake of transparency and accountability, and an accurate historical record of this significant chapter in the life of our city.

By taking sides in the dispute, council also dragged the contractor’s reputation through the mud, and very nearly bankrupted the company. This is not how the city should treat people who do business with us. We owe them an apology.

To put this chapter behind us, we must understand what happened, and do our best to make it right. I’m confident we can, and will continue to advocate for the release of proposals by the original contractor to complete the project, along with the final external legal bill.

Your Take: What are your thoughts on the settlement, and next steps? Leave a message here below or email me at marianne.meedward@burlington.ca

Summary
Article Name
City receives $1.5m cash, contractor $1.75m, in Burlington pier legal settlement
Author
Description
Siding with the engineer and retendering the pier cost Burlington residents more, and the settlement won’t recover cost overruns.
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