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Kincardine council has deferred a decision on whether to pay an extra
$19,000 to Urban Environmental Management Inc. (UEM) for additional work
done by the company, but not approved by council.
In committee-of-the-whole Wednesday night (Nov. 4), treasurer Brenda
French explained that UEM performed work over and above the original
scope of the contract, from mid-2007 to early 2008, on its own
initiative, in order to ensure Kincardine could continue working on
compliance with the Public Sector Accounting Board (PSAB) requirements.
The deadline for compliance is two months from now.
The company is asking council to consider additional compensation for a
portion of this work, said French, adding that staff is recommending
council approve a payment of $18,790.25 to be funded from the capital
expenditure reserve fund.
French said the initial contract was entered into with UEM in 2007 to
complete the Kincardine Capital Asset Project for a set cost of $159,860
and set schedule. To date, portions of this work have been completed and
billed, totalling $126,255. The schedule was extended because a great
deal more work has been required, she said, and UEM identified a number
of issues during the course of the project. The company, on its own
initiative, collected data that was missing in order to meet the PSAB
and Kincardine's scheduling deadlines.
"In my opinion, Kincardine did not have the resources internally to
address some of these issues at the time they arose (primarily mid-2007
to early 208) and recognizes that this has been a much bigger and more
complex project than was originally expected," said French. "KIncardine
itself has redirected much more staff time into this project than was
originally anticipated to fill information gaps, and treasury staff has
already approved work on two additional components in mid-2008 to
mid-2009 in order to make review and verification of the information
easier for staff or to capture missing information, both of which were
funded within the approved operating budgets."
She said UEM should have asked for approval of council before proceeding
with the additional work. However, she said there is value to the work
the company performed, and either UEM or another consultant would have
had to be hired to complete that work. UEM's contract was for
$35,472.50, and French recommended council pay the extra $18,790.25.
"We awarded a contract for that initial amount of money," said
councillor Ron Hewitt. "I think it's a bad practice to get into, paying
extra money. If there was more work, then they should come to council
ahead of time."
Councillor Randy Roppel agreed, saying the contract was for $35,472.50.
"They went out on their own to do things. I do not support that."
"The way they approached this was not the preferable way," agreed
French. "They went outside the scope of the original contract. But the
work needed to be done and we had no staff to do it. There is value in
the work they did so council should consider this partial payment."
Chief administrative officer John deRosenroll cautioned council that now
is not a good time to cause an impasse on this project since the
deadline is in two months. "It's true a contract is a contract, but this
is the biggest accounting conversion process in years. It's critical to
get this done so it's not advisable to have a separation with our
consultant at this time."
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"We're stuck between a rock and a hard place," said councillor Marsha
Leggett. "We should defer this and bring it back to a full council."
[There were only five council members, including the mayor, at this
meeting.]
"Just because it's the biggest accountability job does not give them (UEM)
the right to do what they want," said Roppel. "They're responsible to
nobody but themselves. We're responsible to the taxpayers. I'm not going
to change my mind."
Mayor Larry Kraemer agreed with deRosenroll that now is not a good time
to lose the co-operation and goodwill of the company hired to help
complete the PSAB project, with the deadline looming so closely.
Council agreed to defer the matter to the Nov. 11 meeting.
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