Contractors sue Surrey over city hall costs
Companys say work covered up to hide true price of 180,000-square-foot building
Surrey’s city hall — a $97-million project mired in lawsuits and potentially ballooning costs — faces a new challenge from a contractor alleging he’s owed millions for extra work, including costly preparations for a mayor’s gala at the unfinished site.
On Oct. 30, Ron Fettback of Western Pacific Enterprises filed a notice of claim in B.C. Supreme Court against the City of Surrey, also naming the project’s general contractor, PCL Constructors Westcoast Inc.
Fettback claims that because Surrey changed design plans during construction, the amount of work his company performed tripled from what was expected in the original plans.
Fettback says he has the vouchers to prove that Surrey directed his company to do extra work but hasn’t paid for it. He believes Surrey is delaying a dispute resolution process, forcing him to carry the city’s costs and wait for a court resolution because the city wants to hide the project’s mounting costs.
In February, The Surrey Leader reported that while Surrey officials say the new city hall will cost $97 million, mortgages taken out to finance the project — a 180,000-square-foot building complete with black marble, extravagant tiling and soaring glass work — mean the eventual bill will rise to $150 million.
The city, however, insists that the project is on budget for $97 million, without financing figured into the price tag. Surrey plans to repay its loans in 10 years, making the final cost $128 million, according to Surrey spokesman Oliver Lum.
If the city chose to renew loans, assuming the same interest costs, the final bill would be $145 million, Lum told The Province.
“What I would see is that they are covering up cost overruns by not dealing with the contractors and the contracts in place,” Fettback said in an interview. “They can just sit there and say ‘No, no, it only cost $100 million to build this place.’ ”
WPE is only one of the contractors to file legal claims connected to the city hall project, which was started in 2011 and occupied by city staff in an unfinished state in February.
In early 2014, Bosa Construction Inc. sued the general contractor PCL Constructors Westcoast Inc. and Surrey, alleging that PCL caused delays and increased costs on the project because of design changes and other issues. PCL counter-sued BCI, alleging BCI failed to complete structural work in time, which delayed the whole project and forced PCL to pay other subcontractors overtime and additional costs.
Fettback believes PCL and WPE face “an identical issue” with Surrey, and PCL will make a claim for about $18 million above its original contract with the city.
Calls to B.C.’s PCL office management and PCL’s legal counsel were not returned. BCI’s lawyer, Garth McAlister, said he could not comment on the case.
Fettback said he believes it is Surrey, not PCL and other contractors, that is responsible for the “mess” on the project.
“It is the City of Surrey who in my view has not fulfilled their contract requirements,” Fettback said.
Fettback said what really irks him is his company was asked to do what he sees as wasteful preparation work on the behind-schedule city-hall site to enable Mayor Dianne Watts’s charity gala to take place there in October 2013. According to The Surrey Leader, critics have called the impressive civic centre the “Watts Mahal.”
Prep work for Watts’s October 2013 gala “put strain on all trades’ manpower for a long time period … while minimal work was contract work, we were pressed to have certain building areas appear finished,” according to WPE documents.
WPE invoices alone suggest work for the gala cost about $90,000, including almost $30,000 in overtime and double-overtime costs that “would have not been performed at all if there was no mayor’s gala,” the documents say.
“It’s stupid,” Fettback said. “Why would you have a gala on a job site that is in trouble, and then have a party and not want to pay the costs associated with it?”
However, Watts said work had to be completed, and all money raised at the ball went to charity.
“The charity ball for the firefighters, the building was to be completed, so everything was planned for the completion of the building,” Watts said. “And it didn’t occur, so there were things that had to be done in order to have (the gala) there.”
Aubrey Kelly, Surrey’s development manager, said the city expects to settle costs with PCL “within months” and then presumably PCL will settle with subcontractors.
However, the figure PCL is seeking from Surrey above its original contract is “nowhere near” the $18 million that Fettback suggested, according to Kelly.
“We are fully committed to paying what we are contractually obligated to do,” Kelly said.
As to Fettback’s claim that WPE completed $90,000 in unpaid gala prep work, Kelly said: “I can’t believe the number would be that high. I think it is a reckless statement to say the gala cost that much, because it was done on an unfinished building. That is a baseless allegation.”