Details of transit settlement still in the dark

By Dave Flaherty/The Oshawa Express

It remains unclear exactly when details of the settlement of a longstanding legal battle between the city and region will come to light.

Durham Region and Oshawa recently negotiated an agreement on disputed costs resulting from the region uploading the city’s transit services in 2005.

Regional council approved a motion directing the release of a public statement on the settlement at its April 11 meeting. However, as of The Oshawa Express’ deadline, no information has been released.

In 2011, the region sued the city for $8.9 million over ‘unfunded liabilities’ including pensions and benefits.

By reaching the agreement, the two sides avoided an arbitration process.

At the meeting, Oshawa Councillor John Neal attempted to have the news release include the legal costs of both the region and city tied to the dispute included in a media statement but failed to receive support.

As of now, the only occasion either side has revealed any legal costs was in March 2017.

At that time, the region released a report noting Durham had spent approximately $720,000 in legal fees up to that point, including more than $623,000 in fees, over $18,000 in disbursements and more than $81,000 in taxes. No updated amounts have been released since that report.

The city has yet to divulge any of its legal costs tied to the situation.

“We really don’t want to give away our plan B,” Mayor John Henry told The Oshawa Express in March when asked about the decision not to share the amount. “We’ve been working on a plan B, along with this, which is plan A for a while now and invested a lot of staff time in this.”

Since the March 2017 report, Neal has made numerous requests for an updated figure during regional council meetings and has also asked for the same from the city on a number of occasions.

“I’ve asked this time and time again,” he says. “It’s a tragedy what has been spent.”

Noting he was the one member of council who consistently brought up the legal situation, Neal says “the silence was deafening” whenever he did.

Neal remained steadfast in his belief that a settlement could have came sooner, and the situation avoided altogether.

“It’s a political albatross for the taxpayers,” he says.

Speaking with The Oshawa Express after the April 11 meeting, Henry said the settlement was “not perfect” but necessary.

He added that he intends for public to be aware of the “entire story”.

Neal and Nester Pidwerbecki are the only members of council who were serving when the region took over the city’s transit services.

Pidwerbecki chaired the committee that oversaw the transition into a regional transit system over a decade ago.

He says at the time the provincial government made it clear if the city was to continue to run its own transit services, the resulting costs would have been tremendous.

“It was written out to us by the government of the day that we would responsible for all our capital expenditures,” he recalls. “They were funding up to 75 per cent of purchases of new buses. It didn’t leave us a heck of a lot of leeway.”

However, the unfunded liabilities were part and parcel with the deal from the beginning, Pidwerbecki says.

According to him, Ajax and Pickering were in a similar situation, although to a lesser extent than Oshawa, and chose to pay the liabilities at the time, but the majority of Oshawa’s city council of the day wasn’t in favour of doing so.

“They refused. They felt that the region should have accepted the unfunded liabilities,” he says.

Pidwerbecki says there was even a suggestion of paying off the liabilities over a 20-year period, interest-free but “there was no interest in it” and the issue eventually faded away from the forefront of council’s attention.

In hindsight, Pidwerbecki says this was a mistake.

“It is obvious it says the council of the day didn’t do the job properly. I have to take my share of the blame on it,” he says.

However, Pidwerbecki believes, in the end, the two sides negotiating a settlement was the best option.

In his view, the fact Ajax and Pickering paid their liabilities almost immediately set a precedent that gave the Oshawa little chance to win a case in court.