Vote at council: Mon. July 4, 7pm, City Hall
The pier will cost $15 million, excluding legal fees and staff time spent on the project, based on a budget presented last week at council’s Community Services Committee meeting. The committee (myself excluded) supported an additional $5.7 million for this phase of the project, planned for completion in 2013. The hope is to recoup some of these cost overruns through legal action. The recommendation needs a final vote at council July 4.
Dismantling the pier remains an option until a tender is awarded, though we have been advised that would cost as much as completion. That seems high, so I’m asking for a breakdown of those numbers.
Risks come with all options
Everyone at the city is committed to completing the pier, and minimizing risk to taxpayers, although we have disagreed about how best to achieve that.
I favoured negotiating with the current contractor, and the bonding company instead of retendering the project, adding time and money, and pinning our hopes – and dollars – on recovering money through legal action.
Undoubtedly, this option carried risk, as did all the options we considered.
With the release of the budget, residents are now aware of the increased budget and later completion date associated with retendering. There are also risks: What if the bids come in too high? What if something goes wrong again? What if the design is faulty? This was at the heart of the dispute between the engineer and contractor and has never been fully resolved.
The legal process also carries risk: What if we don’t recoup anything from the legal action? Legal action is expensive. I’ll be asking for those figures to be made public, and the Information and Privacy Commissioner has recently ruled in a case in Waterloo that they can be – see story below.
So residents are rightly asking: what are we doing to mitigate these risks? What has changed to avoid a repeat of what’s happened?
The good news is that several changes have been put into place, and you’ve been a part of making that happen.
My research on the pier 15 months ago as a private citizen uncovered that the contract administrator – tasked with settling disputes – was also the design engineer. That handicapped impartial resolution of the design questions that were raised. An industry best practice is to separate the two. You asked for changes. The city has now hired a project manager that’s independent of the design company.
My research also revealed that there was no mandatory mediation clause in the original contract, so the contractor and engineer were never forced to sort this out. When we review the contract, I’ll be asking for that.
Shortly after joining council, I learned there was no regular reporting on the pier – council got reports as issues arose but often key deadlines had been missed or positions became entrenched and intractable. So, I asked for reports every three weeks at each Community Services Committee, and council and staff agreed. This allows us to stay on top of costs, timelines and any issues that arise, so we can deal with them before they become insurmountable. It also encourages much more discussion and reporting in public – as council gets an update, so do you.
In addition, much more stringent criteria are now being used to prequalify potential bidders, staff told council last week. Eleven contractors have sought prequalification; up to eight will be invited to bid, with bids due in August, and a decision by council in September or October.
The bid also states a $4-6 million price range for the project, to discourage bids that are wildly out of line with the new budget.
These are all steps in the right direction which will help mitigate risk, and you’ve been a part of advocating for this change.
My take: Like you, My commitment is to ensuring that we stick to the new timeline and budget, and maintain openness and accountability. Making the budget public is a step in the right direction. We need to do the same with our legal fees, staff time spent on the project, and the costs of other options considered by council, back to the original offer from the contractor in September 2010. I would also consider demolition if the bids are unacceptable.