WINNIPEG – The city’s executive policy committee has “begrudgingly” approved spending four times more than expected for a piece of land they need from Manitoba Hydro for rapid transit.
But one city councillor doesn’t think Hydro acted in good faith during the negotiating process.
Finance Chair Marty Morantz says a city report on the process makes it look like Hydro and the city agreed on a method to determine a fair price for the land.
But after a cost of $4.6 million came back, Hydro had a second assessment done, coming back at more than $30 million.
The two sides then negotiated a price around $20 million dollars and councillors are being asked to approve it by next week to keep southwest rapid transit corridor construction on time and budget.
City COO Michael Jack told the executive policy committee that Hydro acted in good faith through the process. But Morantz took exception to his comment, saying Hydro didn’t stick to the original agreed upon assessment process.
“They broke the agreement. How is that acting in good faith? That’s not acting in good faith. I don’t know how you can even say that? That’s not good faith at all,” he said.
Jack said that though they thought they had agreed on a methodology for the assessment, Hydro was never legally bound to accept the assessed cost.
“We had a general agreement on how we were going to approach value and then the parties diverged,” he said.
Jacks told the media if they could do it again, they would firm up the terms with Hydro.
“We would scrutinize it much more closely in terms of ensuring we had absolute agreement,” he said.
Morantz thinks the Manitoba Hydro board should reconsider their price when they meet next week.
Bruce Owen, a public affairs officer for Hydro, says the settlement was agreed upon by both sides.
“The city did their assessment of the land and we thought in the best interest of our customers that we do our own assessment of the land. You had two assessments, hence it became a negotiated settlement,” he said.
The city is between a rock and a hard place. They need the land for rapid transit, but Hydro has no obligation to give it to them and the city can’t expropriate it.
City councillor Russ Wyatt says Mayor Brian Bowman should stand up to Hydro.
“He should get in there and talk to the new Premier and talk to the new Hydro board and find another solution because this is not it.”
Bowman says council needs to have its say on the deal next week, but they may reach out to Hydro before then.
“There may very well be ongoing discussions between officials here at the city, myself included, with Hydro,” he said.
City staff say the increase in price will not blow the budget for the rapid transit extension.