After taking most of the summer off, Halifax council meets next Tuesday. This fall council will see an unusual number of heavy issues coming before it. Here’s a quick look at four of the most important issues.
Auditor general Larry Munroe had expected his report on the Washmill Underpass fiasco to come out in March, then April, then… well, it should be out soon.
Readers will recall that the underpass was never much of a serious project for the city—it was far down the list of about 100 capital projects on the city’s 25-year wish list. The project had never been properly studied or engineered, for the very good reason that no one expected it to be built until 2030 or so, if ever. In 2009, someone, probably some staffer arbitrarily charged with putting dollar figures on each item on the wish list, guessed that the underpass would cost $5.8 million. That figure was never to be taken seriously; like dozens of other projects on the wish list, a better estimate of costs would come when the underpass moved up the list to be taken more seriously.
But then the global financial collapse came, and governments around the world found they had to embark on some stimulus spending to get the economy rolling again. In Canada, the stimulus took the form of the “Building Canada Fund,” where the federal government would pay one-third of the cost of large capital costs, with the provincial and city governments also paying one-third each.
Stimulus spending was and is a good idea, in the abstract, but the Conservatives used the spending for political purposes. As I explained in The Coast, the Conservatives rejected council’s list of preferred capital projects, including the four-pad arena in Bedford and new sidewalks on Spring Garden and Quinpool Roads, and shifted the stimulus money to projects in Conservative-friendly ridings, including new sidewalks in Sheet Harbour, the tiny bit of HRM in Peter MacKay’s district, and to the Washmill Underpass project.
Caught off guard, someone at City Hall decided the project now cost exactly $10 million, and that’s the price the feds agreed to: one-third paid by the federal government, one-third by the province, one-third by the city. Any cost overruns would be paid by the city.
And boy were there cost overruns. The $10 million project grew to $18 million, and none of the bureaucracy bothered to tell council about the cost overruns until there was nothing to be done about it, and council had to eat the $8 million loss. Read the whole sad saga here.
Munroe does good work, but I suspect he’ll look at the Washmill issue with a narrow focus, examining particularly how staff screwed up the cost estimates, how the pyritic slate issue was either missed or under-appreciated, and how come SNC Lavalin, the firm that came up with the cost estimate, didn’t have to eat the cost overruns. Those are important issues to get into, and council will have its plate full dealing with them.
But what’s necessary is an examination of the political issues behind the project, and in particular a look at who in the private sector benefitted from Washmill being constructed. I’m trying to delve into these issues myself, and hope I can find something substantive by the time Munroe’s report comes out.
Trade Centre Limited
Construction of the new convention centre is well underway and will open by January 1, 2016, but astonishingly there is still no management agreement in place for the facility. Apparently, everyone involved wants to wait until the last minute, because that always works best.
My understanding is that the province intends that Trade Centre Limited will be renamed, keeping all its employees, but with the city now owning half of the operation. Evidently, getting council to actually agree to this arrangement is considered a mere formality.
Still, there are huge issues at hand, including:. Why should TCL president Scott Ferguson be hired on to run the new convention centre without competing among other candidates turned up in a nationwide search? Will Ferguson get a big pay raise for running a bigger convention centre, and if so, who determines that? What about TCL’s substantial liabilities, including a million dollar pension plan for former TCL president Fred MacGillivray? The pension liability was incurred by a provincial crown corporation, and approved by the province—why should the city be on the hook for half of that?
Another issue outstanding concerns the existing WTCC office tower. By terms of the agreement with the city, the province was to put the office tower on the market on June 30, 2013. That never happened. So, we have an agreement that will spell out how the convention centre will be run, who’s responsible for what, where tax money goes… and already the province has violated the terms of the agreement. So what are we to make of this? Presumably, it’s simply understood that the city will have to buy the building at its “book value”—somewhere around $12 million, I think—on January 1, 2016. Remember that the $8 million Washmill cost overrun is considered a scandal…
A staff report says restoring the Khyber will cost over $4 million, and so council seems disposed to sell it off for “economic development” purposes. A vote to do exactly that was scheduled in August, but the issue was deferred to the fall, possibly as early as next week.
For background reading on this, here are a few items of interest:
• Councillor Waye Mason’s blog post about the future of the Khyber.
• Joel Plaskett’s take on the Khyber as an arts incubator.
• Emily Davidson on the Khyber as the intersection of the arts, music and queer communities.
Besides all of the above, sale of the Khyber probably means the end of any meaningful existence of the Barrington Historic District. The Roy is gone and the
Eaton Zeller’s building is coming down. I can’t imagine anything beyond the Khyber’s facade being saved by a new owner. What’s left? The Green Lantern, I suppose. The Barrington Historic District was one of the most important features of HRM By Design, but now it looks like a sad joke.
Here’s what I wrote about proposed changes to the solid waste system in June:
Staff is recommending a series of changes in how the solid waste system operates. Most of these changes are relatively non-controversial, although some residents will object to policies requiring clear garbage bags and a ban on putting grass clippings in green bins. (Other minor changes include the required use of “kraft” paper bags for yard waste and putting box board in blue bags, instead of solely in green bins.)
But there are two game-changing proposals. Staff—and by staff, I mean CAO Richard Butts, who has championed the changes—wants to extend the life of the landfill by building it 15 metres higher than previously planned, and to allow “institutional waste”—garbage collected from businesses—to be sent to landfills outside HRM. Both proposals are contrary to policies adopted when the Otter Lake landfill was established in the mid-1990s, and the extension of the life of the landfill is a betrayal of nearby residents, who were promised the landfill would close in 2024 and who have made life decisions like buying and improving property based on that promise.
These issues have been discussed in other media at length for the last couple of years, so I won’t rehash all that here. I do, however, want to point at the issue not being discussed: the gigantic profit involved in the landfill, no matter what council decides Tuesday.
The landfill is operated by Mirror Nova Scotia, a firm associated with Dexter Construction, which wins the bulk of road building and paving contracts in HRM. In 2011, the city signed a 14-year contract with Mirror to operate the landfill through what was projected to be the landfill’s closure in 2025. That contract was conservatively valued at $392,780,000, and included a 20 percent annual profit margin. Yes, you read that right: Mirror is guaranteed a 20 percent profit.
Butts himself started his career in the garbage industry, first at Laidlaw Waste Systems and then as a vice president at Waste Management. In 1998 he went to work for the city of Toronto, instituting that city’s plan to ship garbage to Michigan and then, when the state of Michigan greatly increased its landfill tipping fees, to takeover an existing landfill in Ontario and repurpose it for the city. (He was one of three city managers who left Toronto right after the election of Rob Ford as mayor, although he told me at the timeFord’s election had nothing to do with the decision.)
In short, Butts knows garbage. He knows about shipping garbage, he knows about landfills, and he knows about the corporate side of the industry. Arguably, we want someone with deep experience to be guiding the decision-making process, but the giant money involved, his close ties to the industry, and one dominant player locally makes me, for one, extremely uncomfortable.
Council keeps punting this issue down the road, but it’s all going to come to a head this fall.
Now that’s what I’m talking about Tim. I assume they are also pushing the Cogswell ball along as well? $750,000 in funding was authorized to conduct addition due diligence (surveys, pre-design, soil testing, etc)
The Eaton’s building is coming down? More info?
Whoops, I was in too much of a hurry there. I meant the Zellers building, which hosts the Doscovery Centre and until recently Reflections. Post has been updated.
The Province had condemned the T.Eaton building a l-o-n-g time ago as «too costly to renovate» citing environmental and envelope degradation problems they CLAIM would cost more than a new glass and steel shack; BTW (of course!) owned and rented to the taxpayer at profits commensurate with those of the PeeThree boondoggles.
To be fair, in addition to the projects you mentioned, the federal stimulus money also helped us get the new library.
Well, just one more ugly, overpriced, and over-built boondoggle. Just wait until the carefully-disguised OPERATION costs of that scar-on-the-corner start rolling in.