Vaughan accused of ‘squandering’ tax dollars after paying developer $1.2M for an Oak Ridges environmental study -- almost four times the original price

Thestar.com
June 19, 2020
Noor javed

Vaughan has agreed to pay a developer $1.2 million -- almost four times what was budgeted -- for an environmental assessment on a road he needs to complete his housing development.

The deal has sparked outrage among residents and raised fears that it would set a precedent that could prove costly.

In more than a dozen letters to council ahead of this week’s meeting, residents said they were shocked that the city was going to approve the $1.2-million bill from Rizmi Holdings Ltd., for an infrastructure project on the protected Oak Ridges Moraine needed to extend Kirby Street, between Bathurst and Dufferin streets.

The environmental assessment (EA) was originally budgeted at $325,000 and was also the first time the city allowed a private developer to conduct an EA instead of the municipality doing it.

“It is ridiculous that the city allocates Mr. Milani $325,000 and in 2019 he asks for another $875,000.00 bringing the total up to $1.2 million, almost quadrupling the bill,” said Robert Kenedy, president of the MacKenzie Ridge Ratepayers Association, in a letter to council. “The taxpayers are stuck with an absurd bill for the EA, and the irresponsible councillors who voted in favour of it are getting away, yet again, with squandering more tax dollars.”

Cam Milani, seen here with Lucia Milani, says the EA his firm carried out in Vaughan will save the taxpayers $23 million in the long run.

The developer, Cam Milani with Rizmi Holdings Ltd., said he is “extremely proud” of the environmental assessment, which he said will save taxpayers millions in the long run.

In 2015, the city made a deal with Rizmi to allow it to conduct the EA, for a small segment of what will eventually become Kirby Road. This was the first time the city had given out this kind of a project to a private developer -- and did so in part, because Milani owned lands on both sides of the road allowance and needed the future road to get his development going, a staff report from 2015 states.

At the time, the city said it would reimburse Milani to an “upset limit of $325,000,” which was “comparable to the cost of other recently completed city initiated road EAs.”

At Tuesday’s council meeting, Coun. Marilyn Iafrate and Coun. Alan Shefman asked senior staff -- most of whom weren’t around in 2015 -- why the city was stuck paying a bill beyond what was negotiated, and why it was only told of the cost overruns once the EA was completed. The two also expressed concern at how the city handled this contract, and what the city would do if other contractors come in over budget in the future.

“We have many other projects that we contract out and if someone is bidding on something, and there is a contractual agreement for a set amount of money, we expect them to respect that,” said Iafrate, who said that the planning commissioner in 2015 did not want to give the EA to Milani, but council did. “My concern is that everybody is going to over budget, and we will be expected to pay it, because we did it in this case.”

Vince Musacchio, the director of infrastructure planning, confirmed that the city was only informed in 2019 that budget overruns had taken place, and there were no periodic check-ins as “oversight and management of the financials did not exist per the terms of the agreement.”

City staff said that if the city had done the same assessment it would likely have cost around $750,000. City staff confirmed that Milani used an engineering company that had never done an EA before. A full audit report, reviewed by the city, is expected to be released in coming days, after Iafrate asked that it be made public.

In an email to the Star, Milani said: “Rizmi and the Milani Family are extremely proud of the Kirby Road Environmental Assessment, which ultimately saved the taxpayers $23M in road construction costs,” he wrote. “In what was a very unusual situation, we were the only party fighting for the taxpayer.”

Milani’s $23-million savings come from the developer negotiating for a road alignment that he says was cheaper than a road alignment preferred by York Region and the Toronto Region and Conservation Authority, parties that would have to sign off on the EA.

The two agencies were looking for a roadway that protected an environmentally sensitive area that would have cost the city more in land acquisition cost. But Milani eventually negotiated a “hybrid” route that was more cost effective, he said.

A number of councillors, including Coun. Rosanna DeFrancesca, Regional Coun. Gino Rosati and Coun. Tony Carella lauded Milani for saving the taxpayer $23 million.

“I understand that not only did we circumvent going through environmentally sensitive land, we also saved $23 million in land acquisition costs in this hybrid proposal,” said DeFrancesca, who voted in favour of the payout.

After lengthy debate, council voted 7-2 to change the agreement and pay Rizmi Holdings a total of $1.2 million. The money will come from development charges.