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CFBB is pleased to have the opportunity to comment upon the long awaited and recently released Rust-D’Eye Report. Given the fact that CFBB was formed initially three plus years ago due to what we considered a flawed RFP and contract award for the City Hall expansion, we have been following this project with more than a keen eye. We have made numerous submissions to Council and the media on various concerns throughout the process, and continue to do so today. We have submitted a more detailed summary to all Council members for your review.

Our Comments

1) We add our voice to the chorus of upraised shouts in the community and beyond saying that this report lacks credibility. It is largely based on a series of interviews and discussions with staff (some already departed) and consultants, all of whom were deeply involved in the development of the ‘Competitive Dialogue’ process and contract award through to the actual construction and partial occupancy of the City Hall expansion. With a lawsuit hanging over their collective heads, why would anyone admit to a flawed, little understood process, or that the process could have been implemented better, or that staff acted improperly, or without authority? Shouldn’t Council have been able to anticipate the outcome without spending an inordinate amount of taxpayer money, to this point according to the media having reached $268,000?

No attempt seems to have been made to interview outside groups like ourselves that might have had a different view or perspective based on Proposal Call and development experience. That seems an obvious shortcoming. A listing of those interviewed should have been included as an Addendum.

Mr. Rust-D’Eye appears to have had an altogether similar experience in the neighbouring community of Oshawa, where his report there enraged the public and garnered charges of “whitewash”. Perhaps if Councils could set different parameters for these ‘investigative’ reports and how they should be mandated and prepared, credibility of the ‘fact finding’ could be improved. Best practice would have been to hire a well-known specialist in municipal procurement rather than a lawyer whose firm had past connections with the City. It would have allayed any sense of conflict of interest.

2) It seems very hard to understand why the City needed to go to the expense of hiring a highly paid consultant to recommend and help implement the ‘Competitive Dialogue’ RFP process, a European import procurement concept which was totally unfamiliar in Canada. It was only instigated in the U.K. in 2006 to be used in large and complex projects. To date, so few have been completed that there is limited experience with its success or legal exposures. The interpretation of the process by staff and the Canadian consultant resulted in extreme secrecy and control of information, shutting out even the elected politicians as well as the public. In our opinion, it was simply an inappropriate, costly, and unduly complicated concept to be used in Brampton to build its relatively small, straight forward City Hall expansion project for which the public demanded transparency and accountability. Too much authority and latitude was delegated to staff who were themselves unfamiliar with the process and seemingly not schooled in development matters.

And yet, Mr. Rust D’Eye has no trouble exhorting the concept and process as being unflawed, well implemented and appropriate for Brampton. We believe he is a little out of touch with reality here in Brampton.

 

3) When 40 plus RFP packages were taken out by a variety of interested parties, but only three applications were received, why didn’t the alarm bells sound that there just might be something wrong with the Call. After all, the City Hall expansion project should have been seen as an attractive opportunity by the development community, particularly with a solid Brampton city tenancy in an economically difficult climate at the time.

We can speculate on why the response was so completely poor – process too secretive, terms too unfair and one-sided, Brampton past reputation for Calls, a feeling that the outcome was known in advance. Whatever, only three replied; surely a minimum number to indicate a successful competition, and one of those was disqualified. Imagine! Only two potential players remained. Had it not been for Brampton tenant requirements, this RFP should have been cancelled.

Clearly, this RFP Call is seen here and elsewhere as an abject failure. The Brampton public never had the opportunity to see refreshing creativity with the efforts of an enthused development community.

So Mr. Rust D’Eye’s enthusiastic description of the process and outcome carries little weight, and in fact, suggests a not very informed view.

 

4) The report includes the report of Fay Booker, a financial consultant, retained to analyse the entire financial arrangement and whether it represented “value for money”. Her findings in our view are the real Achilles heel for Mr. Rust-D’Eye’s positive conclusions, for she makes it clear that Brampton overpaid by approximately $36 M going the route that they did with the selected contractor, Dominus. That parallels conclusions that CFBB reached a few years ago. Once we were able to find out the areas of the component parts of the project (not from the City but from Freedom of Information Ontario!), we used industry standard and published construction cost information and ascertained that the Dominus project development cost was in excess of 20% higher than it should have been. That, of course, translates into higher annual rental payments.

For Mr. Rust-D’Eye to reach the conclusion that, faced with the Booker analysis, the deal with Dominus represented good “value for money” is quite beyond comprehension. No matter what the report says, the Brampton taxpayer has been “shafted” because of previous Council decisions on this project. They, perhaps, unwittingly allowed it to happen on their watch. What a legacy to leave for the citizens of Brampton who will be paying for this lapse in good judgement for the next 25 years.

 

5) The so called ‘Option Agreement” regarding a small piece of land needed for Phase Two (Library Phase) appears to be one of the great “sleight of hand” moves. Apparently, through a little known capital acquisition fund mentioned in Addendum One of the RFP, staff have the right and authority to make land acquisitions without specific Council approval. Staff used that fund to pay a fee for a three year, irrevocable land option for $480,000 to secure the land for Dominus, unbeknownst to Council. The question we would have: Is use of this fund legitimate to purchase an option only, money which would be lost unless Phase two proceeded and which would require a further outlay of $2M to actually purchase the land in three years’ time, all without verification by Council?

The Rust-D’Eye report seems to sanction and not be troubled by this move. We are not so sure. Why should Council not have been informed, just to be open and accountable? But that seems to be the way with this whole project.

 

6) The former CAO has stated that staff had the authority to transfer the Dominus lease agreement (and, presumably, the original agreement with Dominus) to the new landlord Fengate without ever advising Council. That seems to us to be a real stretch, given that the deal with Dominus described them as “the long term partner with the City”. Did staff assume authority to, in effect, free wheel with formal agreements using their own best judgement? Did Council even know about their new “long term partner” before the deal was papered? And shouldn’t it have? Mr. Rust-D’Eye seems not to have been bothered by this extraordinary assumption of power by staff.

By the same token, staff along with the Mayor, agreed to cap the penalty for Dominus for missing delivery dates. Shouldn’t that have been a Council decision?

Had substantial completion been achieved last summer and so certified by the architect when Dominus decided to depart the project and sell their interest to Fengate? Was the building ready for tenant occupancy with appropriate occupancy permits issued to allow tenants to occupy the space without liability and for rental payments to commence?

So many questions arise when the Council and the public are not made privy to basic information to which they should be entitled or be made aware. Secrecy begets secrecy, and trust is easily eroded.

Summary

For us, the conclusions of the interim Auditor General’s report on a whole host of accounts does not stand muster. It lacks credibility, particularly so because it ignores the Booker findings that show the Dominus deal to have been far more expensive than a more traditional and transparent arrangement to build the needed facilities. Additionally, to have found and supported interviewee accounts of implementation perfection defies reality.

A process to improve our SWQ really began in 2005, that’s 10 years ago! It regained momentum in the summer of 2009 and almost 6 years later we still don’t have a project that is complete, a project that actually re-developed the SWQ of the Downtown, a project that ignored any architectural integrity and design, didn’t involve the public or elected officials, was too expensive, has made re-development of the actual SWQ more complicated, was secretive and filled with controversy. We have only one comment…..…WHY?

Many of you ran for elected office on the promise to “clean up” City Hall, make it more open and transparent, more accountable and to restore business community and taxpayer confidence.   Quite frankly, if it wasn’t for the efforts of a few Council members, a few concerned residents and business owners, and one reporter, the sweeping change of voter sentiment that helped you get elected might have never happened.

We believe everyone here is familiar with the saying, “you learn from your own mistakes”. So please tell me how can the city of Brampton move forward and become a leader, a model for accountability and transparency if we don’t even admit that any mistakes were made?

Thank you.

Doug Bryden and Chris Bejnar, and John Buch

Co-Chairs – CFBB 


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To Mayor Jeffrey and Council

There will be a public meeting to discuss the Rust-D’Eye Report next Monday night. Here is a little background on CFBB concerns regarding the City Hall expansion for your interest.

CFBB came about largely because of our concerns over the Competitive Dialogue RFP for the expansion, its lack of transparency, and the contract award. We have not been shy in commenting upon the process, the architecture, the construction methodology used, and the all too obvious shortcomings of the building itself and particularly the late delivery, which is at this time, still on the horizon.

The report covers some 134 pages, and is a tough slog for a volunteer group such as ours to make detailed comment.

Some overall comment:

1) The report seems largely based on interviews with City staff and various consultants who were connected with the process throughout. Those involved would, we would think, paint the best picture possible to ensure that the process went well and as expected, and that there were no flaws or staff acting improperly and without delegated authority. No one is going to admit wrong doing, nor probably have an opinion that things could have been done better.

The result of all the interviews gives process, staff and consultants a clean bill of health. The report appears like a $160,000 white wash, but given our knowledge and experience, should we have expected otherwise? Had serious flaws and misdemeanours been found and acknowledged, it would simply have provided additional ammunition for the Inzola lawsuit, so acknowledgement of any shortcomings in the report was unlikely to occur.

What we found odd is that Rust-D’Eye never interviewed CFBB for an outside opinion, given our profile on this matter, and that is a serious omission, we believe, and makes his report less credible.

2) At the get-go, we always believed that Dominus should have been disqualified at the start because they had no office building expertise or experience. Their renderings at the public meeting at the Marriott Hotel back in November 2011 showed only condo/residential buildings in support of their submission. When we asked that question at the meeting chaired by our former City Manager Deborah Dubenofsky, we were met with a chorus of boos from the Fennell cheering section. One of the Dominus executives did say that they were intending to hire expertise in office building construction. Our question – how did Dominus get into the starting gate? (The result of not being familiar with office construction was daily evident to passersby and with discussions with on-site project management personnel).

3) One of our founding members, Doug Bryden, was one of the many interested parties who took out the RFP package (over 40 in all). He says: “My reading of the RFP certainly dulled any interest in proceeding to try and put a bidding group together. The process was unfamiliar, the terms unusually restrictive, and in the legal section patently unfair, giving the City total control of submissions once made. There was no guarantee that favoured or innovative information wouldn’t end up being shared with other proponents, or, like previous Brampton Calls, the project wouldn’t proceed at all for political reasons. In fact, it could be looked at as a “fishing expedition” at no cost to the City. They refused to pay any moneys for submissions”.

In the end, only three submissions were received – Dominus, Morguard and Inzola. That should have started the alarm bells ringing at the City, for this project should have been seen as a splendid opportunity by the development community. With the economy still dealing with uncertainty, the expectation should have been for significant interest from developers anxious to lock into a high profile, three phase, $500 M Downtown revitalization project. That didn’t happen. In conversation had with a senior executive of one of the largest construction companies in the country, he said: “the outcome is already known, it’s not worth the trouble”. He was also concerned about the commitment of Brampton to the project.

We believe the reason for limited interest was also because the process was so secretive and the terms so restrictive and unfamiliar, with no guarantee of public involvement, transparency and fairness in selection. As well, it was getting close to the election, so there could be political consequences in decision making.

4) In the submission package outlining what the proponent was to supply, there was a requirement to enter into a confidentiality agreement, but the schedule outlining the agreement and its contents was not available for review, an unacceptable omission. There was also no requirement to include an “order of magnitude” of the submissions made, so costs were not to be considered in the initial submission, a rather strange condition.

5) The ‘Competitive Dialogue’ process was a procurement import from Europe, suggested by Professor McKellar of York University who was hired as a special consultant to frame the RFP, and then asked to stay on to oversee its implementation. (Optics not great). It was clearly unfamiliar territory for potential bidders in Canada. It was intensely secretive, hardly acceptable in this day and age in Canada which demands transparency. To have Rust-D’Eye, Emmanuelli, and McKellar sing its praises in the report, I think, shows an incredible disregard and disrespect for the taxpayer, who is the ultimate funder of the project. And to keep the elected representatives of the public ignorant of broad details of the process, making them appear foolish in the public eye for not having answers on the project and having to take the wrath of the public, is simply beyond the pale.

Was Council properly briefed by staff and given the required time and information to fully understand this new and untried process? It would appear that Council delegated altogether too much latitude and authority in decision making to staff (and consultants) – a staff which had limited understanding of the process and even less on matters of development experience. Their inability to answer basic and simple questions allowed them to hide behind the secrecy dictates of the RFP and the requirement for non-disclosure of reasonable information to Council and the public. Several times, CFBB had to go to the Information Privacy Commission of Ontario to ferret out basic statistical information to allow reasonable analysis of the project and its cost.

Why should citizens need to file an IPO request to obtain such basic information as the square footage of the building, a fact that is readily and normally available for any construction project? Why where there no comparables presented to Council in the staff report on similar sized GTA office projects? A request to explain how senior staff calculated the $242 cost per square foot presented to Council before the March 28, 2011 vote to this day has not been explained. In fact, a second IPO request revealed that no such document even exists. How is this possible?

6) There seems to have been no one promoting the tried and true public RFP Calls which focus on competition of architectural concepts, often with a guaranteed concept fee, totally transparent for the public to see and weigh in on. Once selected, the competitive bidding on contracts to build the facility based on approved plans and municipal approval and inspection is a fundamental. It allows a myriad of qualified contractors and sub trades to bid on local projects, and best and optimum pricing to be obtained from the market place. Why was it necessary to choose a completely new, unfamiliar and never tried process for this important project?

7) The report shows that a more conventional route for financing the project by the City would have resulted in a significantly lower cost to the taxpayer, primarily due to lower financing cost for the City over private funders. The stated reason is that the City wanted to lay off risk to the private sector so as to know what their end cost was going to be. Statements by Dominus executives and City Manager Dubenofsky proclaiming that “the total cost of the project was irrelevant to the taxpayers” were confusing and quite frankly irresponsible. Surely they would have realized that negotiating the best financing rates and the best price for the project would have made a favourable impact on the $8.2 M annual lease payments taxpayers are now paying for the next 25 years. So why would the cost be irrelevant?

Laying off risk suggests that the City and staff are ignorant and incompetent in development matters, and that cost overruns are unacceptable whatever the reason. There is some truth to this argument based on experience. But how should the risk cost be measured by laying it off to the private sector? The private sector has to provide for the risk on the project, plus add an appropriate premium and profit. There are no bargains, and often the private sector adds a premium because they are having to deal with government and their personnel and process.

We believe that this approach smacks of the P3 (Public/Private/Partnership) process that seems all the rage these days, and in some cases is appropriate at the more senior levels of government on more major, complex projects. But it is so hard to measure the cost of laying off risk, and in the end, the P3 process is much more expensive.

(One untried and potentially best solution at the local level is for the City to retain a private Development Management firm on a fee and performance bonus basis to coordinate the various facets of the project, be part of contract awards with the general contractor who himself/herself is a competitive winner, contracted with to administer the general conditions and the various contracts for a set fee. The financing would be the responsibility of the City at their more advantageous rates).

For your interest and recall, CFBB took significant objection to the stated development cost of the project. Once we were able to determine the project areas (not from the City but from access to the Freedom of Information Ontario), our analyses using published Industry standards indicated that the agreed to Dominus cost was over 20% higher than it should have been. And that resulted in 25 year annual rental payments that were well beyond what they should have been!

Now for some questions:

1) Does the report adequately deal with the fact that the project is late by over a year, and still to our knowledge has not been certified by the architect as being substantially complete (98%). And yet it is being partially occupied. What are the liabilities being assumed by the City for tenants and their personnel? What about warranties and their start date? And the list goes on.

2) Are we satisfied that the City Manager had the authority to settle, with the Mayor’s signature, the penalty clause, and did the Councillors know or understand that the penalty amount was capped, well below what it might have been?

3) Why did Dominus sell to Fengate, and did the City Manager have the authority to agree to the sale? Was Dominus financially challenged? Was there a default involved, and if so, it would be normal for the City to take over the position and finish the project using the completion bond. That would have allowed significant savings on the project rental over time. Was that ever considered?

4) Does Fengate have the credentials to finish the building now that they are the long term landlord and was that company pre-approved by the City?

5) Did the report adequately cover the option on the second phase land, and why did Council not know that the agreement with Dominus indicated that the City would supply the funds for the option to Dominus? Questions from Council in 2011 if in fact Dominus was responsible to secure the land and pay for the option were answered yes. The option fee of $480,000 was a “fee” to hold the property required at a fixed price for three years. This was not for land acquisition as staff suggested in the Auditor’s report. A copy of the Option Agreement should have been included in the Rust-D’Eye report.

6) It became obvious that the staff seemed to have amazing authority to change the rules of the game throughout the construction process in the City’s favour when they ran into an on-site problem.

- staff never required an approved Site Plan for the project from Dominus at the beginning of construction. In fact, the Site plan was a work in progress throughout, which allowed Dominus to keep the project going whenever they ran into a problem on site. Experience suggests that this is not a professional approach.

- staff was able to circumvent the planning guidelines for George Street, approved by Council, so that the building could encroach on the sidewalk and thwart the much desired pedestrian ambiance of the streetscape. That would never have been allowed to a private sector developer.

- did staff ever consider the purchase of additional Queen Street properties (which were offered to the City) to improve the dimensions of the City owned site, to simplify excavation, to prevent the need to add an additional floor of parking, to allow separated ingress and exiting of the garage, and to allow the building to have appropriate setbacks on George Street?

- did staff take into consideration the internal conflict between parking ingress and exiting for car and service traffic?

- did staff consider the possible and likely conflict between the exiting from the garage onto George and the exiting of the garage under City Hall at the same location?

- did staff ever consider how the design and architecture would relate to downtown Brampton? And how the pedestrian overpass on George would block the sightline to Gage Park?

7) Why was the decision made to remove the possibility of expropriation by the City which had been a possibility originally, thereby making it well-nigh impossible for any proponent to assemble property at the SWQ corner at Main and build the expansion adjacent to the existing City Hall?

8) Why did Rust-D’Eye describe the building expansion as being “impressive” (his subjective opinion) when most in the community find it to be an eyesore, not in keeping with downtown Brampton, over-lighted, and in the wrong location?

9) Did staff believe that the optimal location for the building was at the SW corner of Main and Queen (as did the public), their understanding of the SWQ, or was it the Mayor who wanted to expand the location criteria to be able to use City owned land, not realizing that the site was too small for the building that was designed and would sacrifice floor plate efficiency?

These questions and others are compelling, and require answers. The report may or may not give satisfactory responses. But in sum, the report appears to be supportive to a fault of the process used and those charged with the responsibility of implementation.

Respectfully submitted,

CFBB – Citizens for a Better Brampton

April 30, 2015


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Are there no limits to ‘outrageous’ here in Brampton when it comes to staff and the City Hall expansion project?

According to published reports in the Star, staff usurped authority and acted on its own misguided and insensitive judgment regarding a reduced penalty settlement with Dominus due to late project delivery, without gaining full City Council approval!

CFBB suggests most strongly to the Mayor and Council that, until matters clarify when outstanding and long awaited reports on the expansion project are released, Council direct that staff has no right or authority to deal with or enter into agreements with Dominus, the Architects and Engineers or any related project Consultants on the expansion project without first thoroughly explaining to Council the reasons for any contact, and then receiving Council’s full approval.


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The staff presentation of the proposed Budget for 2015 to Council on extraordinarily short notice blindsided Council. The contents which included salary increases and additional hiring resulted in two unacceptable options for tax increases being advanced, both of which were absolute non-starters. The proposals clearly appeared to show those involved in the staff budgeting process to be terribly out of touch with the mood of Council, the sacrifice already taken by the Mayor in her voluntary salary reduction, and the angst of the Brampton taxpayer.

 

Salaries/Wages

 

The payroll costs at Brampton administration represent about 70% of the total budget, and they have been rising at a faster rate than the population growth, itself rising exponentially. The rate of salary/wage increase is not sustainable, nor necessary nor appropriate. Public sector wage levels are already 13% ahead of the private sector. Efficiency, productivity, and a higher level of competence is immediately essential at Brampton. Consideration should be given to reinstating the BEST programme (Brampton Employees Save Taxes) which rewarded employees who came up with creative ideas and ways to improve efficiency and reduce administrative costs.

 

CFBB recommends: Administrative Staff

  • All non-union staff should have their salaries/wages frozen for the year 2015.
  • Wages of union employees should be frozen for one year at the expiry of existing contracts
  • There should be an immediate hiring freeze while a productivity/efficiency review is undertaken
  • A 10% staff reduction should be targeted for the year 2015

 

CFBB recommends: Council Salaries

  • Instigate a voluntary 5% reduction in 2015 salary and benefits
  • Institute an immediate roll back of the severance package to no more than 12 months from the current rate of 18 months approved in 2013
  • Eliminate the tax free portion of the Councillor’s salary

 

Transit

 CFBB recommends:

  • In support of Mayor Jeffrey’s stated opinion, all day GO service should be the focus of improved transit for Bramptonians over the LRT system
  • The LRT system and its routing within Brampton and its connection to Mississauga should be the subject of a more thorough and detailed review, including optimizing the impact on assessment opportunities, on user convenience, and on heritage preservation, and in concert with appropriate traffic studies.
  • An immediate study and review of the Brampton transit system, its equipment suitability, its ridership levels, and its routing, implementing a hiring freeze until the review is completed and results known.

 

Grants

CFBB recommends that an immediate review be undertaken of grants made to agencies and programmes, such as the Rose Theatre, Powerade Centre, the BDDC, Brampton Arts Council, and Brampton Safe City, whether the policy should be amended, and whether conflict of interest requirements are adequately covered and enforced.

 

Capital Spending

CFBB has been dismayed to learn that over $700,000,000 of infrastructure projects have been approved, but the funds are not yet spent nor the projects even started. Reporting on individual project progress has been non-existent, nor does staff seem to have any measures and controls in place to properly monitor cash outflow against project progress. This is not prudent stewardship of taxpayer funds, and closer scrutiny should be demanded, with monthly reporting.

 

CFBB recommends:

  • that accounting for capital projects be spread out over time of construction and completion, and not immediately and totally charged at approval and inception.
  • that the public be consulted when the detail of Capital Budgeting is known and before recommendations made, so that there can be greater understanding of future population trends and infrastructure planning.
  • that from time to time, access should be made to the financial market place to borrow funds for special and desired infrastructure projects. There is no crime in borrowing if deemed appropriate and necessary.

 

Secondary Units

CFBB is fully aware of the burden that secondary units place on the City coffers. These units are a significant cost to the City for Fire and Police protection, and for schooling, and there is no reason why these costs should not be covered through appropriate and additional taxation. Given that there are some government level restrictions which make a solution challenging, CFBB believes that in fairness to the property taxpayer, a way must be found to defray the costs and raise new revenue.

 

As a suggestion, CFBB is asking the City to establish an appropriate Task Force to look into the matter, and include volunteer citizens in the make-up of the Task Force. CFBB believes that these basement and secondary units should be registered, numbered, and inspected, perhaps using Fire and Safety equipment as a measuring stick, and an initial Registration fee be collected, followed by an annual renewal fee. The Mississauga secondary unit bylaw could provide guidance:   http://www.mississauga.ca/portal/residents/housingchoicessecondunits

 

City Hall Expansion

CFBB came about primarily because of what a group of concerned citizens felt was a flawed process in the Proposal Call and the selection of a winning bid. CFBB has doggedly monitored the project, its plan, its design, its impact on downtown Brampton and its heritage district, the methodology of its construction, its schedule delays, its cost overruns to the extent the information could be ascertained, and the negotiated deal itself. The picture is not pretty. The building is still not finished, penalties for missing deadlines not adhered to, partial occupancy taking place before an architect’s Certificate of completion is issued, and the original contractor no longer on the job. What makes matters worse is that rent has been paid since August of 2014! And to top it all off, the City is fighting a $28.5 M lawsuit for an alleged improper disqualification of a local proponent. It is one unholy mess!

 

There are also indications of deceit, unauthorized expenditures, and improper obtaining of approvals by City staff.

 

Now, rather than wait for the lawsuit to go to a trial at Court, the City is expending large amounts of consultant money to determine what the Courts would surely have determined.

 

CFBB believes the City has a responsibility to include in the budget appropriate projections for what will surely be additional costs at information finding, legal protection, and more consultants hired to check on the reports of the initial consultants.

 

If the matter actually goes to Court, the costs will mount exponentially. A settlement on some basis seems the best solution to stop the bleeding, and to prevent the newly elected Council from being distracted by this focus rather than dealing with current issues.

 

CFBB is strongly of the opinion that the Mayor and appropriate legal Counsel should seek a meeting with Inzola with a view to having settlement discussions without prejudice.

 

Conclusion

CFBB believes that any increase in the tax rate should not exceed 1.9%

 

CFBB – Citizens for a Better Brampton

March 30, 2015


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