The memo was sent out by city manger Steve Kanellakos Saturday night.



A new memo from the city manager addressing the confusion surrounding monthly service payments to LRT contractors is not sitting well with some City councillors and commissioners.

The response comes after CBC Ottawa published a report claiming the City had paid Rideau Transit Group (RTG) $4.5 million for September rail maintenance despite claiming otherwise.

According to the memo by Steve Kanellakos that was released Saturday night, the City of Ottawa maintains that it has applied all performance adjustments to RTG payments as outlined under the project agreement to "ensure that the City's rights and interests are preserved."

Services payments, Kanellakos explains, are not made during the month of service, but after the City receives a monthly invoice and "appropriately" reviews it. This means payments to RTG – that include the adjustments for performance failures – are a month behind.

"Using the Project Agreement, the City was able to start significant deductions in October 2019," Kanellakos said in the note. "As a result of the deductions, these monthly payments, which equate to approximately $4-5 million per month, have not been made by the City of Ottawa."

Should performance failures happen at any time, however, Kanellakos says the City is entitled to make deductions from the relevant monthly service payment as a response to those failures.

Because the City is operating a month behind, Kanellako states that the October and November invoices have not yet been paid because of the performance deductions in September and October. The deductions for November and December are still under review.

The City, he adds, will continue to enforce the contract and will not pay RTG should they fail to uphold their end of the contract.

But Gloucester-South Nepean councillor Carol Anne Meehan is not convinced the memo clears anything up.

"I think it's sad that the city manager has to put out a memo clarifying the position on a contract we should all know the details of," she said. "There's only one truth and what is evident to me is that (city management) is making it very difficult for us to get a clear picture of what's going on."

The question now is what has to happen? If it’s a failure to understand the contact - that’s dereliction of duty, if it’s lies, do we just shrug and let it slide? (Trump has done it so often no one even blinks anymore) Don’t want that here. https://t.co/Ss9kKdzlWP — Carol Anne Meehan (@MeehanCarolAnne) February 8, 2020

While Meehan doesn't want to say that obvious mistruths were told, she does say the lack of transparency by senior officials is making it difficult for anyone to understand exactly what's going on – and that's what troubling.

This is why, she says, citizens deserve a public inquiry into the Stage 3 LRT procurement process, which she and fellow councillor Shawn Menard will bring forth as a motion to Wednesday's City Council meeting.

"It's distressing to me that the public has no faith in what we're doing anymore," Meehan said. "It's not necessary – we should be upfront. People have to know that they can trust us. In fact, me as a city councillor, I want to trust what I'm told, but increasingly my faith in what we're being told is becoming more and more shaky."

I’ve thought about this all day and am very bothered by this latest revelation of misinformation and omission of information/ facts to Council & the public. Inaction now on the part of Council could be viewed as wilful neglect. https://t.co/36YObBUcyM — Catherine McKenney (@cmckenney) February 9, 2020



While Citizen Transit Commissioner Sarah Wright-Gilbert appreciates the memo, it's not the details of the memo itself that are bothering her, but rather the timing of its release following reports in the media.

I’m an intelligent woman. I understand contractual obligations. If we were contractually obligated to pay RTM for September and then were going to claw that $ back in Oct and Nov, then we as a tax paying public should be told that. It’s our money and we deserve to know the truth — Sarah Wright-Gilbert (@smwgilbert) February 9, 2020

"This is information that would have been useful and transparent at the time that the payment was made," Wright-Gilbert said. "However, the continued messaging from the City up until yesterday was 'We haven't paid RTM a penny,' when in fact, we've actually paid them a lot of pennies to the tune of $4.5 million for the month of September."

The City, she says, has had many occasions to clarify their statements – including at the Transit Commission meetings when city councillors have brought them up.

"In my view, they are now using semantics to deffend their position and it's not a strong deffence," she says. "But what that memo doesn't explain is why they never told us – and that is what is most disturbing is the lack of transparency and lack of accountability and it does nothing to earn the public's trust which at this point is gone."