Public gets part of the pier cost story – we now know the legal fees. When will the rest of the story be made known?

By Pepper Parr

January 30, 2014


The cat is now out of the bag.  The number wasn’t horrendous but it does take the cost of the pier that was over $14 million, and now has an additional $1,228,040 added to that.  The actual amount spent was $1,349,952 but the city gets a tax rebate which results in a lower number.  We will use that lower number.

And that is before there is any resolution to the legal disputes, which many expect to cost the city even more.

The city released the numbers at a press conference this morning and explained that while doing so went against the policy they put in place December of 2011, the impending decision from the Ontario Privacy Commissioner, forced their hand.

The city apparently decided that they were better off releasing the number of their own volition rather than being ordered to do so by the Privacy Commissioner.

With the legal expenses now public – the city has to consider its options.  Settling this case is what seems to be in the offing but nobody is saying anything.  There have been offers to settle but it takes two to agree and agreements just aren’t in place yet.

Crane working at the pier site topples. Proves to be the point at which problems with the design became evident.

The buzz in the community is that the city does not have a case against Harm Schilthuis and Sons (HSS) and that there is ample opportunity to settle with them.  The folks over at HSS have been wanting to settle since day 1 – way back in December of 2010, days after the new Council was sworn in HSS published an open letter in which he said:

Harm Schilthuis and Sons would like to express how encouraged we are by the co-operative spirit we are seeing from the new council in the City of Burlington to resolve the issue of the Brant Street Pier.

HSS is also very pleased at the City of Burlington’s decision to replace Aecom as Project Manager for this project. This will allow the challenges we have raised with respect to the design of the pier to be dealt with in an independent manner.   We stand confident that the design build proposal submitted to the City of Burlington earlier this year is the solution to a successful completion of the Pier. The team represents a group of the best companies capable of performing this type of work.  Our design build project is ready to begin work in the Spring of 2011.

Also encouraging is the engagement of the City to communicate with the Bonding Company. We are confident that the Bonding Company will be delighted with the opportunity for dialogue. Prior to the election it was quite difficult to have good communications preventing many of the parties involved to understand the various positions. HSS is hopeful that this will be a new day from a communications point of view.

HSS has a number of claims before the city.  It wants to be paid the $2 million plus that is due for work done and approved.  The process was for HSS  to submit their invoices to AECOM, the project manager and for the city.  AECOM would approve the invoices and pass them on to the city who would pay those invoices.    AECOM was the pier project manager for the city.  Included in this $2 million plus are invoices that were approved but not paid and invoices that were submitted but not yet approved.

Where things got dicey for HSS was when AECOM bought Totten Sims Hubicki (TSH) – the company that designed the pier.  When it became evident to HSS that the problem was with the design of the pier, it was difficult to argue with the project manager when the project manager now owned the company that designed the pier.

The design problems centered around a significant change back in 2005 when a pier that was to be close to 200 metres (656 feet) long got shortened to 136 metres (446) which is what the pier is now.  The original design was much more expensive than the city had hoped it would be – remember, this was back in 2005.

Compromises appear to have been made then, in 2005 that made it impossible for HSS to complete the job despite numerous attempts to make changes 

Marianne Meed Ward, who wasn’t a member of Council, was close to screaming when she was telling the public that the organizational arrangement of the pier construction was a problem.  The people in ward 2 certainly believed her and now a large part of the city wants to see her as Mayor.

There is a second set of invoices that were submitted to AECOM but had not yet been approved before HSS advised the city that it would not complete the construction of the pier because of a faulty design.

All the steel beams that had been installed are stripped out and construction starts on the second construction contract. The platform on the right is a trestle that was put in place for construction equipment to use.

A reliable source informed the Gazette earlier this week that HSS had advised the city it could complete the work for an additional $400,000 – that was back before they sued the city.  The offer took place during the Jackson administration and was rebuffed.  Current council members Craven, Taylor, Dennison and then ward 5 council member Goldring were all fully aware of the offer HSS had made as was then Mayor Jackson.

Jackson lost the 2010 election during which three new members were elected to Council and a new Mayor was installed.  It took this new Council some time to get a handle on the file, which was complex. 

With the contractor now off the job, the city called the insurance bond HSS had put in place (they were required to do so) and the insurance company came back with a revised proposal to complete the pier.  The city turned down that opportunity without telling the public how much the insurance company proposal was going to cost and decided to re-tendered the project which was given to Graham Infrastructure at cost of $6,429,700.00  and the work continued. 

New steal beams arrive – construction is underway and the Mayor announces the pier will be opened in July 0f 2013. Not everyone believes him at the time

When the city sued HSS they also sued Zurich Insurance for the value of the performance bond.  In attempt to mitigate their damages the insurance company put together a consortium that included Harm Schilthuis and Sons Ltd., the original contractor.

The city received the proposal through Zurich Insurance Inc. in April 2011, but needed time to review the document. City staff provided advice regarding the proposal to members of City Council in a closed session The Mayor then updated the public at the city’s May 11 Community Services Committee meeting.

Every piece of the new steel used by the second contractor was inspected and then inspected again. The city was not going to get caught with sub-standard steel a second time. Her General manager Scott Stewart, project manager Craig Stevens and the fabrication plant manager close check a beam.

“City Council gave careful consideration to what we saw within the proposal before making our decision,” said Mayor Rick Goldring. “Council does not believe that this is the right solution to completing the Brant Street Pier. As such, the city will continue on its path to finding a new contractor.” City council chose not to make the reasons for turning down the proposal public from the insurance company and is proceeding with the plan issue a tender document for general contractors to complete the pier, with that tender expected to be released in July 2011.

All the steel put in by HSS was taken out – new steel put in place and the pier officially opened in June of 2013.

Now the city has to deal with the proverbial chickens that have come home to roost.

HSS claims they have done everything possible to settle the matter but has continually been rebuffed by the city.

City manager Jeff Fielding said at the press conference that there was a mediation date of June 14th but left everyone realizing that not much would happen on that date.

This is an election year for the city.  When nominations close late in September city council will lose the power to enter into a settlement agreement.  When nominations for public office close Council loses the power to approve any expenditure over $50,000.

The city might find itself facing yet another squeeze play similar to the one with the Privacy Commissioner.  Does this Council want to get into an election and have to tell the voters they have been unable to settle the case when it appears that there was an opportunity to settle for one-third of what the to date legal costs have been?

This is an important point:  The contractor wanted to be paid for invoices that were submitted and approved.  They also wanted to be paid for those invoices that were submitted but not yet approved by then project manager AECOM.  There wasn’t any known dispute over the amounts of that second set of invoices;

The contractor was also asking for an additional $400,000 to complete the construction.  This addition was to cover the cost of changes that had to be made to rectify the compromises way back in 2005 when the length of the pier was shortened.

This is all very complex but it should not be beyond the capacity of the city’s communications people to explain.  The public is not stupid – they know how to do simple arithmetic.

Fielding explained to the media conference that he was leading the event because the file is in the hands of the city manager – it is his problem to resolve based on the instructions he is given by Council.

It is clear then that this council, your council, has not yet given Fielding the authority to settle the matter.  Fielding is believed to want to find a settlement the city can live with.

It is a grand pier, a distinct improvement to the waterfront. It was part of the grand plan former Mayor Rob MacIsaac had for the waterfront. It ran into problems that MacIsaac’s replacement couldn’t manage. The current administration made mistakes of its own – the cost of which are not yet fully known. We do know what the legal fess amounted to

It might be time for city council to get this behind them rather than face an expensive lengthy trial while the voters decide if they still want this council leading them.

The construction problems with the pier didn’t take place during the life of the current council.  However, several opportunities to have the original contractor complete the work for less than has been spent on legal costs was spurned.  Now, a Council that could have made better decisions on several occasions find themselves stuck between a rock and a very hard place.

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4 comments to Public gets part of the pier cost story – we now know the legal fees. When will the rest of the story be made known?

  • James Smith

    Much has been made of the fact that the Contract Admin firm, AECON, purchased the design firm TSH, this is not that unusual. In very many construction projects the DESIGN firm (either Architects or Engineers) also carry on Contract Administration. This is often good practice as the Design firm often has a more complete understanding of the intricacies of a project, and can better approve – or reject work invoiced for than an outside administration firm.
    While the city needs to trust the experts they’ve hired, either staff or outside consultants, experts make mistakes – see today’s news that an Engineer is charged in the Algoma Mall roof collapse. Mistakes were obviously made on the Pier project, from the idea of the project in the first place up to the present. (I expressed my misgivings about this project in all of its iterations to both civic & federal representatives before the project was approved.) I feel strongly that an opportunity to have saved significant money, was missed by both the last council and the present one. While not privy to the details of the proposal by HSS, or the City’s advise from their legal team, it is reasonable to assume councils have accepted their expert advise. Fair enough, but I wonder if there were people on city council who had more than passing interest in construction projects, documentation and construction contract admin who would have asked the right questions of staff & consultants if we would be still talking about the pier.
    We can argue until there is a final resolution of this file what could or should have been done. What Burlington needs to ensure in the future to avoid future fiascos like this one, is a council with the ability to ask not just “How Much” but to UNDERSTAND what staff and consultants are saying. I don’t believe, given the history of this file we have seen evidence of that level of understanding, this needs to change.

  • Frank McKeown

    There seems to be an intense desire in the community to look at this issue from the contractor perspective. While Council and Staff have listened to the contractor, they have a different perspective and made a series of decisions.
    The Council and Staff that I worked with were and are determined to get the best possible outcome for the resident/taxpayer. This isn’t about the legal fees but about the joint responsibility of the Designer, Project Manager and Contractor to deliver as contracted. As a group, they have failed and there is and will continue to be a lot of finger pointing. After all, the three parties all stand to take a financial hit. In these types of projects, determining responsibility is always a challenge. Those familiar with Construction actions are well aware of this.
    This project is a lightning rod that some members of the community are determined to attack certain members of Council with. I see a Council taking extensive legal advise and trying to recover costs for the taxpayer.
    Have there been points in this long process where different decisions could be made? Of course there are. However my bet is that any group of rational people would have reached a decision very similar to the decisions reached by the current Council.
    While this project has been a focus of attack and recrimination, the City’s legal department has successfully dealt with a much bigger case – Nelson Aggregate as well as setting a national precedent on the Airport case which will change how the Federal Government deals with airport authority. In fact the Feds have already issued some new guidelines as a result of this case.
    On the construction side, the City has completed hundreds of millions in projects while this project dragged on. Those projects were successfully completed, on time and on budget with little exception.
    We are attacking a group of competent people. There may have been mistakes, there always are, but I just don’t see the value of the attacks. There is no political gain being achieved by members of Council on this, they are just trying to recover costs for the taxpayer.

    • parrking

      In an email to us Ward 2 Councillor Marianne Meed Ward commented on the remarks former Office of the Mayor Chief of Staff Frank McKeown posted:

      If mistakes were admittedly made, then our role as a community is to ask the tough questions and learn from them. Merely asking the questions shouldn’t be construed as an “attack” on anyone, but a desire to understand and learn. Residents understand mistakes; they simply want a full accounting of what happened, and what we’ll do differently out of this experience.

    • Mr. Wonderful

      This is funny. Just a couple days ago, the current chief of staff’s husband publicly comes out to defend the chief of staff, and now the previous chief of staff comes out publicly to defend I guess the current chief of staff, previous chief of staff, his buddy the mayor, staff, and who knows what else. Something must be bugging this former chief of staff to make him come out in public again (should know better).

      Frank, if anything, you should have taken Goldring with you when you left.

      There is no excuse for this continued loss, and the ‘learning from our mistakes attitude’ is getting a bit tiresome. This city’s management (including all council members who were attached to the life of the file) dropped the ball. Nobody wants to pay for on the job training and for big mistakes like this which are caused by lack of leadership and hard decision making skills.

      The city should have cut bait and settled. That is what rational people do. Get legal advice, fire the lawyers, and make a decision; why are lawyers making decisions? I don’t recall legal counsel being on the ballot in the last election.

      Here is the problem: the current culture at the city is to hide behind legal opinions. Who is running the show? the people who are supposedly in charge, or, lawyers?

      Here is the answer: use the lawyers, but, make the business decisions that will result in better solutions; ahead of any personal political protection. Why is Fielding speaking on this? Where is Goldring? Don’t we have a communication department to spin the tale? I would rather hear from the Privacy Commissioner.

      The airport fiasco was 5 years in the making; did nobody at city hall see the fill activity taking place; jurisdictional confusion? are you kidding? So happy to hear about new federal guidelines; who cares. And where then is our fearless federal rep Mike Wallace? This is yet another example of our city staff, management, council, legal department; all asleep at the switch. The city’s director of planning together with the real estate department could have told you that something was wrong – did you really have to wait for 5 years and the Blair Lancaster Project to embarrass everybody? Frank, you were there when the filling was going on; is everybody that stupid at City Hall?

      So, now Fielding comes out at a press conference forced upon by the FOI request. Did Fielding mention that the total legal costs could also include payment of legal costs from all sides? Did Fielding come out and say, ‘hey, I just also wish to tell everyone that the city will only be on the hook for its own legal costs incurred to date as well as in the future’; I doubt it. And what happens to the legal genius at city hall from today going forward; just another day at the office? Unbelievable.

      Competent people? where? It is their job to bring in projects on time and on budget; that is what people get paid to do; to deliver the assignment. In the private sector you either deliver or you don’t get paid.

      Those that do not deliver, typically get shown the door; kind of like in a private sector company.

      All you had to do Frank, was be transparent when it was time, at the beginning when this started. Now the story starts.

      Bunch of Amateurs.