Newly revealed legal costs indicate the city abandoned its $75 million Red Hill lawsuit long ago and is using the recent transfer of Pier 8 lands as political cover while privately admitting that its serious accusations were unfounded. That’s small comfort for the dozens of federal employees who lived for more than a decade charged with unethical behaviour and facing costs that could have forced them into personal bankruptcy.
A staff report seeking approval to cover nearly $16 million already spent on various projects reveals that the Red Hill legal fees for the last 18 months were just a fraction of the spending rate during the first 10 years of the lawsuit.
The last public accounting near the end of 2013 showed spending of $3,008,062 – or about $300,000 per year. More than a year and a half later, just over $84,000 has been added to the total – a rate of less than $5000 per month that suggests no more than a retainer fee was charged when the court action was supposedly in high gear. The June 2015 total is $3,092,531.
The lawsuit was launched in 2004 against four federal cabinet ministers and 64 employees, one of whom was already dead. Another eighteen names were removed in July 2005, but that still left 45 with their lives on hold for over ten years facing claims that they “deliberately and unlawfully used their public office to harm the city”, and that they “determined in 1999 to use CEAA [the Canadian Environmental Assessment Act] in an unprecedented, illegal and unconstitutional manner” in order to “stop or imperil” construction of the Red Hill Parkway.
The city’s statement of claim went on to declared that “alternatively, the defendants abused their public office by engaging in targeted malice towards the city’s completion of the expressway for the purpose of appeasing a minority of public opinion in Minister [Sheila] Copps’ riding opposed to the expressway and to allegedly protect migratory birds.”
The federal workers have recently been privately informed that the city now acknowledges that they exercised their duties appropriately and in good faith, but there has been no public apology. Many of the accused worked or lived in the Hamilton area and/or were involved in local environmental cleanup efforts.
The personal liability aspect of the lawsuit undoubtedly sent a chill through federal civil servants across the country and likely resulted in a much more cautious approach to enforcement of environmental laws and regulations. That has been worsened by the Harper government’s restrictions on federal scientists’ freedom to speak publicly and the gutting of environmental legislation in the 2011 and 2012 omnibus bills.
The city staff report reveals nearly $6 million in unfunded Red Hill Parkway costs, but only proposes coverage of about half because “the legal fees are expected to be recovered from a favourable judgement from the lawsuit and are, therefore, not included in the funding request in this report.” Finance chief Mike Zegarac has told CATCH that this error in judgement has been recognized and a separate request to fund the legal costs will come to council later this year.
The report doesn’t provide details on the remaining outstanding Red Hill costs. Other underfunded projects include two recreation centres where construction delays cost Hamilton some promised federal and provincial monies. The shortfall for the Westmount facility is $2.6 million and for the Stoney Creek recreation centre is $2.4 million.
There’s also a $350,000 shortfall on the Flamborough twin pad arena, over $700,000 on the Lister Block project and $640,000 for Wentworth Lodge reconstruction. The latter project went nearly $2 million over budget but part of that has already been covered.
The Flamborough arena actually has a shortfall of nearly $5 million but most of that is expected to be collected from an associated land sale and from development charges as Waterdown growth continues. The unfunded list is rounded out with a $3.7 million deficit in the installation of universal metering program explained as a bookkeeping error where monies went to the water operating account instead of the capital account.
Staff recommend that all of the monies come out of various reserves, and advise against utilizing the unallocated capital reserve because “this would severely limit council’s ability to deal with emergency capital requests.” They note this sits at only $11 million when “the minimum recommended balance in this reserve should be approximately $25 million.”