I’ve been doing some  digging into the cause of delays with Burlington’s pier  – and possible  solutions.  There is a way forward, but it likely won’t come quickly and  may cost taxpayers more. I will continue to follow this story, and  provide updates, including a report below that sets the record straight  on some rumours I’ve heard.

Pier dispute may not be covered by  bond

Marianne presenting 229 name petition to city council, asking for transparency on options and costs to finish the pier

When negotiations to complete Burlington’s pier fell apart between the city and the contractor over a design dispute, the city called the  contractor’s performance bond last January. In early July, lawyers for  the city, the contractor, the bonding company, and the design engineer  met to discuss the bonding company’s investigation into the dispute. One  of the key points of discussion: whether a design dispute is covered  under the terms of the bond.  If the bond can’t be used, what are the  costs and options to finish the pier?

To get to the heart of the dispute and possible solutions, I sat down  for separate on-the-record interviews with Scott Stewart, the city’s  general manager of community services; Tom Eichenbaum, the city’s  director of engineering; Henry Schilthuis, president of Harm Schilthuis  & Sons (pier contractor); and Doug Corby of Masters Insurance (an  agent of Zurich, the contractor’s bonding company).

My report is below.  It covers:

• What went wrong: a design dispute
• Tear it down, and other options to finish the pier
• Offer to redesign & build by next year
• Doubts raised whether bond covers design dispute
• Seeking costs from AECOM: risky, lengthy
• Pier costs increase $1 million for “contingencies”
• Decision unlikely before next January
• What you can do

It’s time for transparency for taxpayers. Almost 200 of you have joined the petition seeking transparency on the costs and options to  complete the pier. You can still add your name at mariannemeedward@bell.net.

What went wrong: a design dispute

The pier has been plagued by problems, including a crane accident,  and replacement of steel beams. But the main dispute is over the cause  of a failed concrete pour in 2008, when the concrete sunk too low and  its weight twisted underlying support beams.

Henry Schilthuis, president of Harm Schilthuis & Sons, the pier  contractor, says a design flaw caused the problem. Schilthuis brought in  several independent engineers to review the design, who also raised  design concerns.

AECOM, who designed the pier, says poor construction techniques  caused the problem.

The city is siding with AECOM, and believes the failure was caused by  improper form and false work (temporary supports used during  construction). However, both Henry Schilthuis and Tom Eichenbaum  confirmed that engineers from AECOM, the city, and Schilthuis were  on-site the day of the pour. AECOM inspected the false and form work and  gave the go ahead to proceed with the concrete pour. If the false and  form work were faulty, why didn’t anyone catch it then?

I’ve spent hours going over the fine details of the pier construction  and design, listening to the various perspectives. The bottom line is:  there may never be agreement on whether design or construction  techniques caused the problem. Even professional engineers disagree on  this point. The city could spend a lot of money fighting it out in court  to determine blame and assign costs. Taxpayers may be up for that; but I  doubt it. What I’ve heard is residents want a solution – quickly. So  what are our options?

Tear it down, and other options to finish the pier

There are essentially three options to finish the pier: tear it down;  finish it with another contractor; finish it with the current  contractor. We’re told the cost to tear down the pier would be far  greater than finishing it, because we’d have to return about $6 million  in federal and provincial money already spent.

It’s doubtful another contractor would be able to complete the pier  for the original tender price, given the cost of materials and labour  alone have increased in the two years this project has been delayed.  Further, it’s doubtful anyone else would want to touch this project,  given that even professional engineers disagree on what went wrong. The  engineering/construction community is a close-knit one; everyone has  heard of “the troubles with the Burlington pier.”

So that leaves us with the current contractor.

Offer to redesign and build the pier by next year

In January, Schilthuis presented a design-build proposal to the city,  to redesign and finish the pier at additional cost, with a new team  that does not include AECOM, the original designer.

Neither Schilthuis nor the city wanted to reveal the additional costs  for the redesign/build proposal. Schilthuis says the added costs cover  the redesign, and are “nominal.” Even if the design/build proposal is  accepted, Henry Schilthuis told me his company stands to lose a  substantial amount of money finishing the pier. Schilthuis is prepared  to absorb those costs to see the project completed.

The city says the additional costs are “significant” and include  unacceptable conditions.

“We were open to their proposal,” said Tom Eichenbaum, the city’s  director of engineering. “But the expectation was that the city put more  money on the table. That wasn’t deemed acceptable.”

I asked whether the city will probably spend that money anyway – and  more – on litigation, consulting fees and inflation if an agreement  isn’t reached soon. Eichenbaum responded that the city is hopeful the  bonding company will cover the costs.

Doubts raised whether bond covers design dispute

The contractor’s performance bond  – from global giant Zurich -  provides funds to complete the project under certain conditions.  Typically, bonds come into play if the contractor is bankrupt – not the  case here – or defaults on the contract. That is under debate.

The city considers Schilthuis to be in default for refusing to  complete the pier under the terms of the contract, which include the  original design. Schilthuis says this is a design dispute, and that it  can’t complete the pier as currently designed, for safety and structural  reasons.

“In this case, there doesn’t appear to be clear default or clear  breach of contract, and nobody is insolvent,” said Doug Corby, of  Masters Insurance, an agent of Zurich. “We are not intended to be a  dispute resolution mechanism. You don’t turn to the bond to say ‘solve  it’.”

Zurich has every intention of honouring the bond, said Corby, so long  as the claim falls under the terms of the bond. Zurich has assigned an  independent adjusting firm to look at merits of city’s position and  Schilthuis’ position, and has been working closely with the city to find  an appropriate solution. Lawyers from the bonding company, the city,  and Schilthuis met in July to discuss the bonding company’s  investigation into this dispute.

Scott Stewart, the city’s general manager of community services, said  those results will be made public. Worst case scenario: the bonding  company doesn’t agree with the city calling the bond. “That could lead  to litigation and claims,” acknowledged Tom Eichenbaum, the city’s  director of engineering.

Seeking costs from AECOM: risky, lengthy

If the dispute falls outside the terms covered by the bond, is the  city prepared to recover costs from AECOM?  AECOM designed the pier and  carries $5 million in general liability insurance and $5 million for  professional liability. I put that question to Scott Stewart and Tom  Eichenbaum from the city.  “If there were deficiencies in the design, we  would hold them responsible to aspects they are responsible for,” said  Eichenbaum. Added Stewart, “We just want the pier built. So if this is a  problem with the construction, the person hired to build it is  accountable. If the problem is design – and not everything has led us to  that [conclusion] -  then we will hold that person to account as well.”

Going after AECOM, however, will likely lead to delays and costly  litigation. In the end, it may not be possible to determine fault in  this case – whether design or construction techniques – at least not in a  timely, cost-effective way. So where does that leave taxpayers?

Pier costs increase $1 million for “contingencies”

The budget for the pier is $9.25 million, up from $8.1 million in  2006. Included in the budget is $1 million in unspecified  “contingencies.” Are these amounts enough to cover the additional costs  requested by the contractor?  It’s time for transparency on the costs  and conditions to complete the pier.

Decision unlikely before next January

Municipal rules prevent new spending over $50,000 in an election year  after Sept. 10. If a decision on the pier isn’t made before then, the  new council will inherit this matter, but likely won’t get to it till  the New Year (the inaugural council meeting is in December). If the new  council determines that the most prudent financial course is to complete  the pier with the current contractor’s design-build proposal, we’ll be  back to where we were a year ago – having lost a year and paid  significant legal and consulting fees in the intervening months.

What you can do:

Add your name to my petition seeking transparency on costs and  options to complete the pier, by emailing mariannemeedward@bell.net.

What I’m asking for. I will seek transparency on  costs and options to complete the pier, and solicit your input on the  most timely, cost-effective solution.

The contractor isn’t bankrupt, and other pier rumours dispelled

We may never know whether poor design or poor construction techniques caused the delays in building Burlington’s pier. Even professional engineers disagree on that point. But maligning the contractor’s reputation and spreading false rumours does nothing to advance dialogue and understanding of the situation, nor find a productive solution. Click here for a primer dispelling some of the rumours I’ve heard (including from city officials!), followed by the reality.

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