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