There has been much said about the Urbacon issue in the print and electronic media, and most of it I would categorize as misinformation, particularly if it came from any of the “Guelph Tea Party” slate of candidates. As someone who has been on council since 2000, here is my take, in terms of rumour/innuendo vs. what I know to be true:
Rumour 1. Former CAO Hans Loewig did not seek independent legal advice, or, if he did, why didn’t he just ask the advice of the city’s lawyers?
Mr. Loewig did indeed seek external legal counsel – an expert in construction contract law. This external legal counsel told him that we had sufficient grounds to terminate the agreement. The city only had 2 or 3 lawyers at the time, none of whom had any expertise in construction contract law. In addition, in-house lawyers might have been perceived as biased, i.e. recommending whatever they thought would be in the city’s best interest, rather than the best advice.
Rumour 2. The mayor and council were involved in the whole Urbacon termination, so they are partly to blame.
No-one around the Council Horseshoe, from the mayor on down, is an architect, a developer, a builder or a construction boss. Thus we would not presume to tell staff what to do, particularly on big-ticket items such as the new city hall. We rely upon the expertise of our CAO, senior staff, lawyers, external consultants and their reports and advice. In this instance, the mayor and council listened to the direction the CAO had taken, but were not involved in any way in that decision. Our only involvement was a motion to receive the information after the fact. Here is a copy of an email sent to Council on April 3rd of this year, by our CAO, Ann Pappert:
Good Afternoon Madam Mayor and Members of Council,
I wish to provide you with clarity on the decision to terminate the contract with Urbacon.
Council received verbal updates from the then CAO on the status of the City Hall construction project. The CAO was advised by legal, professional external consultants and project management staff. After consideration of their advice, the CAO made the decision to terminate Urbacon’s contract. On Sept 19, 2008 the Administration terminated Urbacon’s right to work to completion and ordered them off the site. A complete legal search of Council files has resulted in the following: there was no report to Council seeking Council approval of this decision. There is no resolution of Council directing staff to terminate the contract. Rather, on October 17, 2008 the Administration formally terminated the contract with Urbacon. After that, on October 27, 2008 Administration brought the matter to a closed session report to Council seeking direction on litigation. These are the facts of the matter.
Even Councillor Gloria Kovach, in an interview with the Guelph Mercury on September 27th, noted that “….clearly that vote did not come to council to terminate Urbacon…..It did not come to council. Council as a whole cannot wear that decision as there was no vote from council”.
The Municipal Act notes that “the head of council may be called a warden, chair, reeve, or mayor”. As the head of council, the mayor is part of council; therefore all references to council in any of the above includes the mayor.
Rumour 3. In a letter to the Guelph Mercury, Hayes Murphy (lawyer and former city alderman) stated “This disastrous decision to terminate the Urbacon contract should not have been allowed to happen, and when it did happen it should have been immediately rectified and corrected. However, the mayor and council of the day supported, and continued to support this unlawful termination leading to this horrendous loss.”
According to all of the evidence and documentation we received, the termination was NOT unlawful. However, the mayor and council NEITHER SUPPORTED NOR OPPOSED the termination, and had NO ROLE in the termination; we merely received the information AFTER THE FACT. Perhaps things were much different when Mr. Hayes was an alderman during the 1970s, but I can assure you that nowadays council’s every move is controlled by regulations.
Having said that, does this whole experience teach us anything? Should council be more involved in “big” decisions such as this one? Should we have been allowed to weigh the evidence and make a motion re the possible termination of the contract with Urbacon? Perhaps. The process was carried out as per both the authorizations given to staff in the Municipal Act, and the city’s processes and procedures documents. I am sure we will be doing a thorough “post-mortem” on the whole Urbacon issue, so perhaps any such future occurrence (let us hope not!) will be handled differently.
The role of city councillors, including the mayor, is to set the vision for a city and to define the parameters within which a city functions. It is also to represent the views and wishes of the residents who elected them. There are several guidance document and books about the role of the city councillor and of city staff, including the Municipal Act, and they are pretty specific on those relative roles. I have included below a dialogue between the mayor and the Guelph Tribune’s reporter Doug Hallett, on April 8th of this year.
Question 1 from Doug: – Given what I think I know about how city hall operates, I assume that Hans Loewig would have needed your go-ahead to order Urbacon off the work site on Sept. 19. Am I wrong?
Ms. Pappert’s response: You are incorrect Doug. Under the CAO By Law, the CAO has the full administrative, delegated authority from City Council to make administrative decisions e.g. cancelling contracts. Furthermore, the CAO does not receive direction from the Mayor or any individual member of Council. The Municipal Act does not give any authority to the Mayor as Head of Council or as the CEO to give “a go ahead” to the CAO or City Staff. Only Council as a whole gives direction to City Staff.
Question 2 from Doug: Also, what’s the explanation, in your view, for why council’s prior approval was not sought before the action was taken on Sept. 19?
Ms. Pappert’s response:The CAO is delegated the role and responsibility to administer all business affairs of the Corporation including “to direct the coordination of all policy decisions of Council and to deal with all matters arising from Council’s decisions without further reference to Council except to regularly report to Council upon actions taken.” While City Council did receive updates related to how administration dealt with issues throughout the construction of City Hall, the CAO is responsible for the administrative decisions.
Mayor Farbridge has posted an excellent summary of the Urbacon issue. Here it is:
Urbacon – What does this mean for the City?
The builder of the new city hall was terminated in late 2008 after almost two years on the job.
The project was experiencing significant cost overruns and had been given two deadline extensions both missed by the builder. There were frustrations on both sides. Something needed to give.
Council was regularly briefed on the significant risks associated with the inability to secure a completion date and the renovation of the old City Hall still waiting to get started.
After considering options, and on the advice of external legal counsel sought for their expertise in construction contract law, our Chief Administrative Officer terminated the contract with the builder to gain control over the completion of the project.
The courts have since ruled that we did not have the right to terminate the contract. We then moved quickly to reach a settlement out of court to avoid further legal costs and finalize the cost of this project.
Let me be clear – every dollar of the Urbacon settlement that wasn’t spent on the people of Guelph is a wasted opportunity. We have learned from this costly experience. We changed the contract for the renovation of the old City Hall. Because of these changes, the building was completed on time and almost $1 million under budget. We changed the contract to rebuild our Organic Waste Processing Facility. Because of these changes, the building was also built on time and was more than $1 million under budget.
Our new way of writing these contracts is one of the ways we have fixed this problem. There are other ways. We have proven this by completing projects on time and under budget. Key staff involved with the cancellation of the Urbacon contract are no longer with the city. I deeply regret that this experience cost us so much. Being a leader is about being guided by strong values. My values of community, responsibility and hard work guided me through this challenging time and today we have a better way of doing business. These values will continue to guide me everyday that I am your mayor – today and tomorrow.
Maggie Laidlaw 