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

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

  |   Pier   |   5 Comments

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

5 Comments
  • Jerry Fairbridge | Jul 1, 2014 at 10:40 am

    Another case of politicians and public servants evading accountability by delaying the reckoning even though it puts up costs for everyone. Thanks for stating it like it is.

  • Bruce Bond | Jul 1, 2014 at 10:48 am

    Being in the construction industry for over 50 years and 35 of them being in upper management I am familiar with problems arising after projects have started. I have learned very early that is best not to change contractors as any blame for delays, damages and additional requirements is easily passed on to others with no one accepting responsibility. This opens up a whole can of worms as we have had with the pier. I could see from the start that because of bad concrete, defective steel, crane collapse, etc. the only people who were going to be happy would be the lawyers. That is why I was against changing contractors from the start.

  • Julian Varga | Jul 1, 2014 at 3:21 pm

    Having some knowledge of the construction industry, having been there and done that for many years. My company was a sub contractor to the original contractor of the pier but at another project a few years ago and found them to be a first class reliable operation. Marianne Meed Ward, thank you for your diligence and for making our City a better place and watching that our tax dollars are properly spent.

  • Charlie Schwartz | Jul 2, 2014 at 4:48 pm

    I would like all the facts to be put on the table regarding the so-called $10 million performance bond that was SUPPOSEDLY taken out BEFORE “the joke on the lake” construction started. What is the story here? All it seems that happened was the city, or rather “WE” the usual citizens whose pockets the politicians ALWAYS put their hands into, shelled out another $1.3 million to end up settling for a lousy payout of $1.5 million. If ANYBODY thinks this is equitable they’re as CRAZY as the politicians at city hall who are crowing that it is!!! Our whole legal dept & those politicians responsible for this fiasco should be fired & resign.

  • Kenneth Colombo | Jul 10, 2014 at 2:46 pm

    Hello, my name is Jacob. I am an inveterate SIGN COLLECTOR … much like you see in bygone day collector shows. I guess you would call them antique shows. I would like to acquire at least THREE of your campaign signs … which I will call the Gold Standard of Council Communication. I am a totally non-partisan unbiased citizen as long as my viewpoint prevails. We have not been served well by the current council. I am anxious to see the departure of certain specific councillors. The problem is: They either 1. have not done their homework 2. fail at communicating with delegate visitations 3. are objectionably unwilling to listen 4. enjoy the country club atmosphere where every “in-camera” decision is taken for purposes of concealment in an attempt to deny public disclosure. May I request an advanced costing by your good self in the hope I can acquire your signs. Although I do not live in your ward, I would consider the acquisition of your signs MANDATORY in my personal effort to giver representation to the Gold Standard of Communication.

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