Brampton council wants to know where $1.4 million in fines went

Firm owed nearly $2 million for city hall project delays, but paid only $520,000

Brampton councillors want to know why staff recommended excusing $1.4 million in penalties that a developer was supposed to pay after a controversial downtown project fell more than a year behind schedule.

It was one of many questions two members of council peppered staff with Wednesday after the release of a report that raises even more concerns about a controversial $500million downtown project that has had more twists and turns than a soap-opera plot.

“It looks like we have settled for $520,000, when in actual fact the penalty should have been closer to $2 million,” Councillor Elaine Moore stated, questioning staff about the reduced amount charged to builder Dominus Construction after a city hall expansion was delayed by more than a year.

The building was supposed to be substantially completed at the end of January 2014. But that goal wasn’t reached until mid-February of this year and, according to the report, it won’t be done until sometime this fall.

The report states the original agreement in 2011 with Dominus was a penalty of $5,000 a day, and the project fell 377 days behind. But instead of paying the city the full amount, just under $2 million, a new agreement was drawn up last year (which was signed by former mayor Susan Fennell, but not shown to council). The new agreement allows Dominus to pay just $520,000, Moore outlined, reading from the report.

Staff said it would have cost too much in legal fees to go after Domi- nus for the full amount, as the company could claim things such as bad weather caused the delay.

Staff also said that a long-anticipated auditor-general’s review, investigating allegations of staff misconduct in the project, will hopefully answer some of the questions raised from the report Wednesday.

That investigation by lawyer George Rust-D’Eye was supposed to have been completed in December, but has been delayed three times, while the cost for his work has at least tripled from the $50,000 to $60,000 council was told it would cost in September.

The council-ordered investigation was prompted by the publication of damning court documents last summer in a $28.5-million lawsuit against the city by another developer, who alleges he was disqualified from the project’s bidding because staff and Fennell were biased in favour of Dominus.

The court documents include evidence that Brampton staff used city funds to pay a $480,000 option on a piece of land for Dominus without ever informing council.

The city of Brampton denies all of the lawsuit’s allegations. Dominus has stated that it followed all of the rules of the project’s bidding process.

Wednesday’s report also addressed concerns raised by Councillor John Sprovieri, who believes Dominus did not meet zoning requirements for the city hall expansion because the sidewalk space is not what it was supposed to be.

“Why did city staff qualify Dominus for this project when they could not meet the setback requirements?” Sprovieri asked.

Brampton’s head of planning, Marilyn Ball, said that a 1996 bylaw allowed the setback and sidewalk width achieved by Dominus, stating that, “Staff stand by the information that’s in the report today.”

But Sprovieri was just getting started. He pulled out copies of the city’s bylaws and replied to Ball, “Forget about the 1996 bylaw, that bylaw was overridden by a bylaw in 2006. You might shake your head, but I have the bylaw right here. “I don’t accept this explanation.” As staff continued to defend the project, Sprovieri asked why Dominus sold its long-term stake in the deal, which would have seen the city pay it $8.2 million a year over 25 years, to Fengate LP — and how that transaction somehow resulted in a $131-million debt on the city’s books, instead of the $94 million expected. He also asked why staff agreed to $8.2 million, when, according to the original agreement with Dominus, the amount should have been much lower, based on long-term Bank of Canada bond rates that the financing was supposed to be based on.

Staff said they would come back to council with another report to answer those and other questions.

At one point, after Moore questioned how staff had claimed the project was nearly complete and when staff said the original penalty was “not cut and dried,” Moore replied to staff, “Every time, it’s like you’re defending Dominus.”

Dominus Construction had agreed in 2011 to pay $5,000 for each day the city hall expansion fell behind. The project was delayed 377 days