Any thought that the Hamilton Waterfront Trust was going to start playing by the same rules as other city departments was quickly put to rest with approval today of a motion that will see HWT get an additional roughly $800,000 to administer construction work on the West Harbour. The motion, an “urgent walk-on”, as is typically the case with HWT dealings with Hamilton Council, was passed against the advice of city staff. At issue was a desire by the Waterfront Trust to get its fees increased for overseeing some construction projects on the waterfront. Back in 2016, Council hired the Waterfront Trust at a cost of approximately $1.5M as project managers overseeing four projects on Piers 5-7 valued at approximately $15.5M—making HWT’s take roughly 10 percent of the contract value. But now the cost of the projects have ballooned to approximately $23.5M.but staff, pointedly recommended that HWT’s fee should remain at approximately $1.5M.
In the discussion that ensued, at a meeting of the West Harbour Development Sub-Committee, Hamilton Waterfront Trust Executive Director Werner Plessl argued that since the size of the contracts had increased to $23.5 Million that the fee paid to the HWT should grow accordingly—in which case HWT would stand to gain another $800,000. He argued that his deal was to receive 10 percent, but staff suggested the $1.5 Million had been capped as the maximum that the parties had agreed to. Staff’s view apparently, was that the scope of work required by the HWT had not changed significantly, as a result of the cost overruns. Mayor Fred Eisenberger made that point last week but this week he seconded the Motion by Clr. Farr to make the fee adjustment. Only CLR. Maureen Wilson opposed the measure.
There’s no question that the HWT needs the money. For several consecutive years it has struggled with operating losses that have rendered the organization dependent on work projects provided by the city. The HWT got a bit of a windfall when it sold its lease on the Discovery Centre back to the city for $2.6 Million. The terms were that the city would pay the note off at $230,000 per year. But then the city had to pick up the tab on the $769,000 legal tab the HWT incurred in its lawsuit with Sarcoa. The city is deducting about $70,000 per year from the annual payment until it has recovered its costs. Without the note payable by the city to the HWT, the agency is effectively insolvent.