Court Rules That City Was in the Wrong When Urbacon Was Fired

With really only the controversy of the "Green Wall" mucking things up, life in the new city hall building at 1 Carden St has been pretty good these last four years. Still, getting the darn thing built came not without its fair share of controversy, including the eleventh hour firing of the contractor Urbacon. Naturally, court action followed, and the other day the ruling came down and it was in favour of Urbacon. The reasoning will be revealed later when the full decision is released, but for now, the spin has begun as the Urbacon ruling has become the season's first, full-blown election issue.

City Hall itself shed first blood (so to speak) with a press release Monday morning that framed the loss as a moral victory. "A judge has ruled the City did not have the right to terminate the contractor hired to build City Hall and Guelph’s Provincial Offences Court, despite the City having done so with the best interests of Guelph taxpayers in mind," the release read.

To recap, Urbacon was hired to build the new city hall building and renovate the old one to be the new provincial court house. Construction on the building began in 2006, but in February 2008 delays in finishing it began to take effect, and the city was under the gun with a number of leases on downtown office spaces about to expire. There were further delays in August and September of that year, which pushed the city to cancel Urbacon's contract, and resulted in the contractor bringing a $20 million suit against the City of Guelph; Guelph countered with a $5 million countersuit.

“Today’s court decision is disappointing,” said Guelph’s chief administrative officer Ann Pappert in the statement. “The City decided on its course of action because construction delays were costing the City—and Guelph taxpayers—thousands of dollars. Based on the contractor’s performance, there were deep concerns about Urbacon’s ability and commitment to complete the second part of project;  the renovation of Guelph’s Provincial Offences Court.”

Later on Monday, the issue went partisan when mayoral candidate Cam Guthrie release a statement criticizing the administration and Mayor Karen Farbridge for a decision that may cost the city in excess of the $20 million. "Like a broken record, yet again, Guelph taxpayers under the Farbridge leadership are on the hook," said Guthrie in the release.

"Instead of working with the contractor to get the job done," says Guthrie, "Our mayor, some members of council and administration fired Urbacon, which launched a lawsuit against the city, for damages and thrust the corporation into a legal battle for years.

"Noticeably absent from the city’s media statement today are comments from Mayor Farbridge," he added. “She may not be commenting on this defeat today, but the taxpayers certainly are."

Perhaps sensing that the gauntlet had been thrown down, Farbridge commented about the Urbacon ruling on her blog yesterday. "The previous term of Council inherited a contract that was poorly written for a project of this size and complexity," she wrote. "Communication broke down. Deadlines were missed and deficiencies accumulated.

"Despite considerable effort, the financial and operational risk to the City simply became unacceptable and our administration believed they had no choice but to take control of the project," she continued. "We had leases with other landlords to manage and moving an organization our size while keeping the operation running is a monumental task to coordinate."

With this one announcement it seems that the battle lines for fall have been drawn with Guthrie setting himself up the common sense fiscally conservative candidate, and Farbridge as the mayor who made a tough call and risked legal action in the name of saving taxpayers the cost of inaction. It's an interesting debate because this might be the kind of situation where there might have been no right answer. Might Farbridge and Co. have taken it on the chin from taxpayers if the delays on city hall continued under Urbacon? 

We may never know, but still the battlelines are drawn now between those that say they've done good:

The subsequent contract for the Court House was structured differently, to suit a project of this magnitude, and it came in on time and under budget.  The risk of conflict between the architect and the contractor was mitigated through a design-build contract.  We used a design-build-operate contract on the Organic Waste Processing Facility which also came in on time and under budget.

And those that say they can do better: 

I’m truly concerned Guelph ratepayers could be in for another huge legal bill like they were when Mayor Farbridge was involved—using taxpayers money—with the construction of the Wal-Mart store in Guelph’s north end. That unnecessary battle, cost the taxpayers hundreds of thousands of dollars along with the diverted attention and focus of our staff and other resources for years.

The choice will be the people's to make on October 27.