Mayor Sam Katz has come around to the realization there never was any price guarantee keeping a lid on rising costs at Winnipeg's new police headquarters.
In 2011, after the cost of the city's new cop shop rose another $28 million, Katz said the public need not worry about spending another dime on the project. "Any cost overruns now are the responsibility of those who are building it, not you or me or any other taxpayer," Katz said at the time, hailing the benefits of a "guaranteed maximum price" agreement between the city and construction company Caspian Projects.
Given what's now known about that agreement -- based on the unlikely idea there would be no changes to a building whose design wasn't close to being finished -- Katz concedes there never was a means of preventing taxpayers from ponying up more cash.
"I've dealt with (guaranteed maximum prices). I know what a GMP is," Katz said Tuesday. "This wasn't a GMP. Let's be frank."
A July 2011 letter sent by Caspian president Armik Babakhanians to construction consultant Ossama AbouZeid said the police-HQ price agreement was subject to 10 conditions. No. 10 was a doozy, as it dictated the price would be determined by the final design, only 30 per cent completed at the time.
Katz said this crucial detail was not conveyed to him or council in 2011. "If we had known that, it would have been a different story," Katz said. The police HQ project started in 2009 with a $135-million price tag. That figure rose to $168 million by the spring of 2011 and then $194 million by that summer, when problems with the building were disclosed.
Caspian expected the final design to be finished by Nov. 15, 2011. Although that didn't happen, the city still awarded the firm a construction contract on Nov. 18, 2011, partly to get work started before costs rose even further.
The final design wasn't completed until last April by Ottawa's Adjeleian Allen Rubelli, which billed the city $4.8 million. Based on this final design, the police HQ cost rose another $17.2 million and now stands at $211 million overall.
The final design wound up replacing an initial set of drawings made by Winnipeg consulting firm AECOM, which was paid $5.3 million. Katz said the AECOM design wasn't just incomplete, it wasn't up to code.
The mayor also said AECOM played a role in a so-far-unexplained decision to scrap a 2010 search for a project-co-ordination team that was supposed to oversee every aspect of the work.
The city started searching for a team of engineers who could be present at the Graham Avenue construction site every day until the project was finished. But on Oct. 15, it decided not to award this contract to anyone.
Instead, an untendered project-management contract was awarded in 2011 to AbouZeid, who was given the narrow task of negotiating a construction contract and reporting to the city once a month.
Katz said AECOM and project manager Abdul Aziz determined there was no need for project co-ordinators. The city was advised the work was being handled by consultants, Katz said.
Unfortunately, no one at the city has explained how AbouZeid obtained a contract without the issue of some form of tender. For the third straight working day, the city declined to respond to interview requests. What also remains unknown is who signed off on a "guaranteed maximum price" agreement based on an unfinished design -- and whether anyone at the city knew a deal sold to the public as a means of keeping a lid on costs was deeply flawed.