July 21, 2000
SEAN McKIBBON
Nunatsiaq News
IQALUIT — Some Iqaluit town councillors say they were left out of the loop when the Town’s administration made two payments to a contractor for a new sewage treatment plant that still isn’t operational.
Two payments were made to engineering firm Hill Murray in November and December, against the advice of another engineering firm that the Town hired to oversee the project.
In September of 1999, engineering firm Dillon Consulting Ltd. raised concerns over the structural integrity of the building and recommended the Town seek legal advice.
But that recommendation never made it to council.
"Council may not have been fully apprised of those concerns," said Paul Fraser, the Town’s former acting senior administrative officer, this week.
The hint of a break in communication between the council and administration was first revealed in a management letter written to the town by Philip Clark, a partner with the accounting firm MacKay Landau, who audited the town’s 1999 finances.
"The town engaged a third party engineer in Sept. 1999 to oversee the project. Against the advice of the consulting engineer, progress claims were paid to the contractor in November and December," the management letter states.
Clark wrote that the Town should document the reasons why the consultant’s advice was overridden by the administration. He said that administration staff told MacKay Landau that they had been relying on bonding documents to protect the town if the third party engineer’s concerns proved to be "significant."
Fraser said the fact that council was not made aware of the engineer’s misgivings is not necessarily abnormal.
"That may, from municipality to municipality, in different municipalities, may be not that un-ordinary in the sense that it would be an administrative issue where you’d have consultants providing administration with information and not all that specific information would be shared," said Fraser.
He said that council has to trust administration to conduct the day-to-day business of the municipality.
Frustrated councillors
But Coun. Matthew Spence expressed frustration at being kept in the dark.
"The reason I recommended that the Town hire an engineering firm to project manage this was because I felt they would give council better advice in terms of scrutinizing the project, having the time to actually manage it properly," Spence said.
"They did that. They were hired by council and yet administration, when this third party engineering firm made some recommendations, administration didn’t accept them. In fact they didn’t even bring them to council. That’s extremely frustrating."
Spence says that he has never seen correspondence from the third party engineering firm.
"How are we supposed to make good decisions?" he asked.
Spence isn’t alone in his frustration. Coun. Linda Gunn said that a councilor who gets too involved in the work of administration is liable to be branded a "micro-manager."
"Unless you are made aware that there is any reason to ask a question of the senior manager or mayor, or if you address it through committee, there’s nothing you can do," Gunn said. She said the concerns of the third party engineering firm came as a surprise to council.
One-page contract
Coun. John Matthews said the payment of funds already budgeted for on a contract that had already been approved by council normally wouldn’t go back to council, but he said the concerns raised by Dillon Consulting should have been brought before a committee of council at the very least.
"If they weren’t going to follow the advice of the engineers then it probably should have come before us — unless they had compelling reasons to override the third party," said Matthews.
The letter also reveals that some of the work on the $7 million sewage treatment plant was contracted using a one-page service contract.
A service contract states the dollar value of the work to be performed and has a brief description of the work to be done. The management letter from MacKay Landau said that one such service contract, for $2,871,164.35, was issued with the description "completion of the Iqaluit sewage facility" written on it, and no other detail.
The management letter says that the one-page contracts put the municipality in a precarious position. "The Town is placing itself at financial risk if there is a contract dispute and the town needs to rely on the contract to enforce performance," the letter states.
Now there is a contract dispute. According to Coun. Matthew Spence the Town has hired lawyer Joe Dillon to help sort out who is responsible for fixing the sewage treatment plant’s structural problems.
Gag order
"The problem I have right now is that there is a gag order in the contract. We signed a contract that says we’re not allowed to talk about this publicly," he said.
"This is a problem with the building, the construction of the building. We’re not at the stage really where we’re talking about their technology because we don’t know. We’re not going to know until the tanks can actually be filled with either water or sewage and we’re not going to be able to do that until we fix these walls," said Spence.
"We’re hoping that these guys are looking at a cost-effective way of bringing the materials in on the boat and that part of the delay is because they need to bring it up on the boat and they can get busy fixing it in September."
Fraser said the plant would be operational by the end of the year.
Iqaluit’s mayor Jimmy Kilabuk refused to comment on the fiasco, citing the confidentiality clause in the main contract, which he says prevents him or other councilors from speaking publicly about the sewage treatment plant project.
"They could take us to court," Kilabuk said, through an interpreter.
But when he was told that questions would not be about Hill Murray’s performance, but about why the town paid the company after Dillon Consulting told the Town not to, the mayor said, "I don’t want to be interviewed right now."
He said he would be available for interviews on the topic in August.
Pressure from water board
Fraser said that there was a significant amount of pressure to get the sewage treatment plant operational and some of the accounting problems identified in the management letter were a result of that pressure.
"There was some perceived necessity for fast-tracking this," said Fraser.
The town was issued a water licence last year by the Nunavut Water Board that stipulated the sewage treatment plant should be operational by Feb. 15.
Spence said he hopes that the water board members understand that the town is having problems with the treatment plant and will grant the municipality some leeway in meeting the conditions of the licence.