City and Urbacon settle out of court for $6.635 million
GUELPH, ON, September 8, 2014 – The City of Guelph and Urbacon Buildings Group Corp. have settled their legal dispute out of court for $6.635 million.
“By reaching a settlement out of court, the City avoids further legal costs and gains certainty on the cost impact. The cost will be accommodated within the City’s capital financing guideline to ensure it does not result in an increase in property taxes, and that the City’s financial position is protected,” says Mayor Karen Farbridge. “As we move on from the litigation, we shouldn’t lose sight of the fact that today, Guelph has a well-functioning, award-winning City Hall and Market Square that will serve our community well for decades to come.”
“Urbacon is proud of its involvement in the construction of the City Hall for the City of Guelph and wishes to express its gratitude to the many trades that assisted in its creation,” says Urbacon’s Chief Executive Officer, Marco Mancini. “We are pleased that, notwithstanding the issues that separated us, Urbacon and the City were able to come together and resolve our disputes.”
There are sufficient funds in City reserves to fund the settlement. The City will fund the settlement costs not already provided for from its capital asset renewal reserve, the Legal/OMB reserve and the Capital Tax Reserve fund. The funds transferred from the capital asset renewal reserve fund will be repaid over a five-year period.
Payback can be accommodated within the capital financing guideline, so there is no impact on the tax levy. This is also not expected to impact the City’s capital program as the repayment has been accommodated in the City’s 10-year capital plan.
“The cost impact of this settlement can be accommodated within the City’s current financial means with no impact on Guelph’s latest credit rating which included consideration for this payment,” says Al Horsman, Guelph’s Chief Financial Officer. “It also releases financial liabilities provided for this item at no increase to the tax levy.”
Finally, while the settlement is for $6.635 million, the City has already made some provisions for this cost, and its holdback will further offset the impact.
“I want to thank Guelph’s CAO, Ann Pappert; our CFO, Al Horsman; Urbacon’s CEO, Marco Mancini; and its COO, Ron Carinci for their diligent work in reaching this settlement,” said Mayor Farbridge.