Surrey mayor’s gala at unfinished city hall cost taxpayers $450,000, court hears

CITY CENTRE — An extravagant mayor’s gala held on the unfinished job site of Surrey’s “palatial” city hall — a project that appears to be running up to $50-million over budget — cost taxpayers at least $450,000 according to a new lawsuit against the city.

The project’s general contractor, PCL Constructors Westcoast Inc., is the latest in a list of construction companies to sue Surrey for allegedly failing to pay for project work.

The controversial project — originally pitched to taxpayers as a $97-million investment — was scheduled to be completed by September 2013. But contractors including PCL allege Surrey is to blame for changing plans which caused final construction costs to balloon.

The growing number of claims filed by PCL and its subcontractors against Surrey suggest the project’s final bill could approach $150-million, not including tens of millions in long-term financing costs.

As The Province has reported, Ron Fettback of Western Pacific Enterprises (WPE) — a subcontractor suing Surrey and PCL for $6-million in allegedly unpaid work — points to the October 2013 charity gala put on by former Surrey Mayor Dianne Watts as a prime example of wasteful spending on the project.

Fettback claims his company was asked to complete $90,000 worth of gala prep work on the unfinished site that “would have not been performed at all if there was no mayor’s gala.”

“It’s stupid,” Fettback previously told The Province. “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?”

As well, PCL completed $361,700 in unpaid gala prep work according to its court filings, which would bring the alleged cost of the mayor’s gala to at least $450,000.

“Surrey asked PCL to perform extra work for an event known as the Mayor’s Gala,” PCL’s lawsuit states. “PCL performed that work … and with consequent interruptions of and delays to the project schedule. Surrey, in breach of contract, has refused to compensate PCL.”

PCL’s claim says that in 2011 it originally planned to sign a $70-million contract with Surrey to complete the new city hall. But the plan was changed. PCL instead entered a $37.7 million contract to complete a parkade and a clean-energy “geo-exchange” facility for the project. According to the suit, Surrey decided to have PCL complete actual city hall construction through “change orders” — which appear to be a series of small and flexible contracts. According to PCL, this hybrid contracting raised the cost of construction to $86.5-million, for a total contract value of $123-million.

PCL says it was eventually paid $126-million by Surrey, but is still owed over $9-million. PCL also claims Surrey is liable for millions in claims being made against PCL by subcontractors.

However Surrey has hit back with a response and counter-claim against PCL filed April 8 in B.C. Supreme Court.

Surrey says PCL did negligent work and failed to meet “milestone events” in the contract schedule.

Surrey does not owe PCL or its subcontractors any additional money, and “any loss or damage the subcontractors have suffered is due solely to their failures or the failures of PCL,” the city’s response states.

Furthermore, PCL owes the city damages including an estimated $1.6 million for constructing a “deficient and incomplete” geo-exchange energy system, the city claims.

In a previous interview, Watts told The Province work for the “Mayor’s Gala” had to be completed for the charity event to take place as planned.

Surrey’s response to the PCL lawsuit says the city does not owe PCL any money for “extra work” on the gala, and “PCL deprived the city of it ability to mitigate costs associated with the Mayor’s Gala work by representing to the City on several occasions in the fall of 2013 that the (gala) need not be rescheduled or relocated.”

In an interview, Surrey development manager Aubrey Kelly said he believes it is impossible that “extra work” for the mayor’s gala cost $450,000. Kelly said Surrey is trying to reach an out-of-court settlement with PCL. Kelly also maintained that he believes the city hall portion of PCL’s contractual work is still on track for a $97-million budget, despite the mounting lawsuits and questions around other work completed by PCL in the project.

“I think to say that if some of these lawsuits are successful that the project will be $50-million over budget is offbase,” Kelly said.

Calls to PCL management were not returned.

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