During the election I committed to present to the city fulsome answers regarding Urbacon in the most transparent way possible.
So over the past several months I have been working with staff to make sure that the Urbacon issue was approached through a lens of what were the unanswered questions from the public, that needed to be answered.
Mainly, I explained that there were three elements to Urbacon that should be addressed:
- Do the citizens need to pay back the millions taken from a reserve used to pay Urbacon?
- Has the corporation learned any lessons from Urbacon so that future complex capital projects can be managed better?
- What is the actual total cost of Urbacon to the taxpayers?
The first question can be answered this way:
“No, well – for now it’s a no.”
As part of the 2015 budget, Council approved the allocation of $500,000 to the replenishment of the Capital Asset Renewal Reserve. Originally the request was $900,000. While the cost of the settlement is being accommodated within the City’s capital financing guideline, and while there was sufficient reserves to fund the settlement, repayment of those reserves does create an impact on taxes. (this too needed clarity so I’ll state it again – it impacted taxes.)
The current council policy stipulates the Capital Asset Renewal Reserve Fund used to pay Urbacon must be repaid. About a month ago, council decided to amend that policy and not pay it back. However, we decided to verify this decision after we receive various options and a recommendation to council from staff after another third-party report from BMA Consultants on replenishment of those reserves comes to us this fall. The total cost of this portion was over $5.243 million dollars. Report for this starts on page 46 HERE.
The second question can be answered this way:
“Yes. Lessons learned all around.”
A third-party was used to assess this issue – Deloitte. Their assessment supports the City’s commitment to address issues identified during the construction of Guelph’s new City Hall to ensure success with current and future capital projects.
This was timely as we are possibly embarking on over $650 million dollars of projects over the next 10 years. Deloitte recommended 18 things that the city needs to look at moving forward. Doing such a review was also within the CAO’s objectives for 2014-2015.
Interviews were done and documents were collected. Through their work they detailed for us a new way of thinking about complex capital projects and have suggested that we move into a tiered system. It will be composed of three tiers. Also we need to establish a project management office.
Important to note is that city management reviewed the recommendations from Deloitte and stated “We have fully reviewed the findings and is in full agreement with all recommendations.”
You can read much more starting on page 31 of the report HERE.
And finally, question three can be answered with:
“The city was off by $1,145 dollars.”
This third report on Urbacon, the final of the three, is being brought forward on Sept 9th to the Corporate Services Committee and you can read it starting on page 62 HERE.
Again, a third-party was used to verify numbers. I stressed many times over that a third-party would help in verifying numbers for the public. I, council and the public needed assurances that what was being told to the public was accurate. This report, by Deliotte, indicates a detailed scope of all financials and that the only amount not accounted for was $1,145.
Deloitte went back to Jan 2004 all the way up to June 30 2015 for their investigation. Under “Accuracy and Existence” they found no discrepancies. Under “Completeness” they again found no discrepancies.
From their letter to the Council of the Corporation of the City fo Guelph it states:
“We verified the costs included in the project summary to the general ledger of the City for the period Jan 1, 2004 to June 30, 2015, which reports projected costs of $56,968,414, settlement costs of $5,800,837 and legal and expert witness fees of $2,300,484, and found them to be in agreement with the exception of legal and expert witness fees which totaled $2,299,399 in the general ledger.”
I want the citizens to know that this has been a main focus of mine since coming into office. I believe it was imperative to answer these three questions in a timely and transparent fashion. Although I had wished it would have come a bit sooner, I believe taking the time proved to be the right course of action to take. This affair took years to get here, 8 more months of making sure we got it right for our citizens was the right thing to do.
I also want to stress some key repeated words with my post here. And those are the words “THIRD-PARTY” that was repeated in every single answer above. Each and every question was handled, or is about to be handled, through using a third-party to verify what has now been presented to you. This too was the right thing to do.
It has been an amazing thing to see here at city hall the amount of resources used to address Urbacon. It has also been eye-opening to me how much staff time and focus on Urbacon has taken place. To now come to a place where we can truly say that we know how much it cost and we learned key lessons moving forward is a good place to be at.
It’s also a good place to be at for our business and economic development climate in our city. Those businesses within and outside our city needed to know that we learned lessons and are being that “roll out the red carpet city” that welcomes them to invest with us to create jobs, provide tax income for the city and supply choice for our community. They now know that we will manage our projects using best practices and new recommendations that will protect the corporation but also make it easier for them to work with us.
It’s time to now turn our focus to the things that make our city great and new ideas that can make it better. I sincerely hope that this will take a heavy burden off our collective backs and help us focus on the great things happening in our city now, and the great things that are about to happen in our future!