I’ve been doing some digging into the cause of delays with Burlington’s pier – and possible solutions. There is a way forward, but it likely won’t come quickly and may cost taxpayers more. I will continue to follow this story, and provide updates, including a report below that sets the record straight on some rumours I’ve heard.

Pier dispute may not be covered by bond

Update to Community Services Committee, July 14, 6:30 pm, City Hall

When negotiations to complete Burlington’s pier fell apart between the city and the contractor over a design dispute, the city called the contractor’s performance bond last January. In early July, lawyers for the city, the contractor, the bonding company, and the design engineer met to discuss the bonding company’s investigation into the dispute. One of the key points of discussion: whether a design dispute is covered under the terms of the bond. If the bond can’t be used, what are the costs and options to finish the pier?

To get to the heart of the dispute and possible solutions, I sat down for separate on-the-record interviews with Scott Stewart, the city’s general manager of community services; Tom Eichenbaum, the city’s director of engineering; Henry Schilthuis, president of Harm Schilthuis & Sons (pier contractor); and Doug Corby of Masters Insurance (an agent of Zurich, the contractor’s bonding company).

My report is below. It covers:

• What went wrong: a design dispute
• Tear it down, and other options to finish the pier
• Offer to redesign & build by next year
• Doubts raised whether bond covers design dispute
• Seeking costs from AECOM: risky, lengthy
• Pier costs increase $1 million for “contingencies”
• Decision unlikely before next January
• What you can do

It’s time for transparency for taxpayers. I will be presenting a 150-name petition seeking transparency on the costs and options to complete the pier at the Community Services Committee Wed. July 14. You can still add your name at mariannemeedward@bell.net.

What went wrong: a design dispute

The pier has been plagued by problems, including a crane accident, and replacement of steel beams. But the main dispute is over the cause of a failed concrete pour in 2008, when the concrete sunk too low and its weight twisted underlying support beams.

Current oversite prevents impartial design assessment

Henry Schilthuis, president of Harm Schilthuis & Sons, the pier contractor, says a design flaw caused the problem. Schilthuis brought in several independent engineers to review the design, who also raised design concerns.

AECOM, who designed the pier, says poor construction techniques caused the problem.

The city is siding with AECOM, and believes the failure was caused by improper form and false work (temporary supports used during construction). However, both Henry Schilthuis and Tom Eichenbaum confirmed that engineers from AECOM, the city, and Schilthuis were on-site the day of the pour. AECOM inspected the false and form work and gave the go ahead to proceed with the concrete pour. If the false and form work were faulty, why didn’t anyone catch it then?

I’ve spent hours going over the fine details of the pier construction and design, listening to the various perspectives. The bottom line is: there may never be agreement on whether design or construction techniques caused the problem. Even professional engineers disagree on this point. The city could spend a lot of money fighting it out in court to determine blame and assign costs. Taxpayers may be up for that; but I doubt it. What I’ve heard is residents want a solution – quickly. So what are our options?

Tear it down, and other options to finish the pier

There are essentially three options to finish the pier: tear it down; finish it with another contractor; finish it with the current contractor. We’re told the cost to tear down the pier would be far greater than finishing it, because we’d have to return about $6 million in federal and provincial money already spent.

It’s doubtful another contractor would be able to complete the pier for the original tender price, given the cost of materials and labour alone have increased in the two years this project has been delayed. Further, it’s doubtful anyone else would want to touch this project, given that even professional engineers disagree on what went wrong. The engineering/construction community is a close-knit one; everyone has heard of “the troubles with the Burlington pier.”

So that leaves us with the current contractor.

Offer to redesign and build the pier by next year

In January, Schilthuis presented a design-build proposal to the city, to redesign and finish the pier at additional cost, with a new team that does not include AECOM, the original designer.

Neither Schilthuis nor the city wanted to reveal the additional costs for the redesign/build proposal. Schilthuis says the added costs cover the redesign, and are “nominal.” Even if the design/build proposal is accepted, Henry Schilthuis told me his company stands to lose a substantial amount of money finishing the pier. Schilthuis is prepared to absorb those costs to see the project completed.

The city says the additional costs are “significant” and include unacceptable conditions.

“We were open to their proposal,” said Tom Eichenbaum, the city’s director of engineering. “But the expectation was that the city put more money on the table. That wasn’t deemed acceptable.”

I asked whether the city will probably spend that money anyway – and more – on litigation, consulting fees and inflation if an agreement isn’t reached soon. Eichenbaum responded that the city is hopeful the bonding company will cover the costs.

Doubts raised whether bond covers design dispute

The contractor’s performance bond – from global giant Zurich – provides funds to complete the project under certain conditions. Typically, bonds come into play if the contractor is bankrupt – not the case here – or defaults on the contract. That is under debate.

The city considers Schilthuis to be in default for refusing to complete the pier under the terms of the contract, which include the original design. Schilthuis says this is a design dispute, and that it can’t complete the pier as currently designed, for safety and structural reasons.

“In this case, there doesn’t appear to be clear default or clear breach of contract, and nobody is insolvent,” said Doug Corby, of Masters Insurance, an agent of Zurich. “We are not intended to be a dispute resolution mechanism. You don’t turn to the bond to say ‘solve it’.”

Zurich has every intention of honouring the bond, said Corby, so long as the claim falls under the terms of the bond. Zurich has assigned an independent adjusting firm to look at merits of city’s position and Schilthuis’ position, and has been working closely with the city to find an appropriate solution. Lawyers from the bonding company, the city, and Schilthuis met in July to discuss the bonding company’s investigation into this dispute.

Scott Stewart, the city’s general manager of community services, said those results will be made public. Worst case scenario: the bonding company doesn’t agree with the city calling the bond. “That could lead to litigation and claims,” acknowledged Tom Eichenbaum, the city’s director of engineering.

Seeking costs from AECOM: risky, lengthy

If the dispute falls outside the terms covered by the bond, is the city prepared to recover costs from AECOM? AECOM designed the pier and carries $5 million in general liability insurance and $5 million for professional liability. I put that question to Scott Stewart and Tom Eichenbaum from the city. “If there were deficiencies in the design, we would hold them responsible to aspects they are responsible for,” said Eichenbaum. Added Stewart, “We just want the pier built. So if this is a problem with the construction, the person hired to build it is accountable. If the problem is design – and not everything has led us to that [conclusion] – then we will hold that person to account as well.”

Going after AECOM, however, will likely lead to delays and costly litigation. In the end, it may not be possible to determine fault in this case – whether design or construction techniques – at least not in a timely, cost-effective way. So where does that leave taxpayers?

Pier costs increase $1 million for “contingencies”

The budget for the pier is $9.25 million, up from $8.1 million in 2006. Included in the budget) is $1 million in unspecified “contingencies.” Are these amounts enough to cover the additional costs requested by the contractor? It’s time for transparency on the costs and conditions to complete the pier.

Decision unlikely before next January

Municipal rules prevent new spending over $50,000 in an election year after Sept. 10. If a decision on the pier isn’t made before then, the new council will inherit this matter, but likely won’t get to it till the New Year (the inaugural council meeting is in December). If the new council determines that the most prudent financial course is to complete the pier with the current contractor’s design-build proposal, we’ll be back to where we were a year ago – having lost a year and paid significant legal and consulting fees in the intervening months.

What you can do:

Add your name to my petition seeking transparency on costs and options to complete the pier, by emailing mariannemeedward@bell.net. I will present the petition to members of council at the city’s Community Services Committee next Wed. July 14 at 6:30 pm at City Hall.

What I’m asking for. I will seek transparency on costs and options to complete the pier, and solicit your input on the most timely, cost-effective solution.

The contractor isn’t bankrupt, and other pier rumours dispelled

We may never know whether poor design or poor construction techniques caused the delays in building Burlington’s pier. Even professional engineers disagree on that point. But maligning the contractor’s reputation and spreading false rumours does nothing to advance dialogue and understanding of the situation, nor find a productive solution. Click here for a primer dispelling some of the rumours I’ve heard (including from city officials!), followed by the reality.

 Email This Article  Print This Article