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Dispute between City and Cassellholme Board over reconstruction costs reaching boiling point

'They've not been blindsided by this. They've been partners in this decision-making process for years, for the entire time. So to put something like that letter out is a little, to say the least, mysterious'
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Cassellholme on Olive St. in North Bay.

Tension is rising quickly between the City and Cassellholme's Board after a pair of letters were sent to the Ministry of Long Term Care this week over the controversial reconstruction plans.

Cassellholme's Chief Executive Officer Jamie Lowery is firing back after the City's CAO David Euler wrote a letter to the Deputy Minister of Long-Term Care complaining about the handling of the financing and cost of the facility's reconstruction plans.

You can read the entire City letter here.

Lowery charges Euler's letter is full of inaccuracies and wasn't even addressed to the right person.

You can read Chair of the Board Chris Mayne's Cassellholme response here.

"They make some assertions that somehow we haven't procured the project properly, which is completely inaccurate. Interestingly, the legal counsel that ran the procurement was actually recommended by the City."

Lowery points out that doing a project this large in the middle of a pandemic means keeping the residents of Cassellholme safe, so proposals can't be based on the lowest price.

"There's too many things to worry about. We're dealing with a vulnerable population and you have to make sure you have a qualified contractor."

Two bidders submitted, but one was disqualified because it didn't have the necessary recent qualifications and experience to undertake the job.

"The project is going to take four to five years and one of the things we've asked for is for them to hold the price for five years, so if you look at quantities, prices, and labour, holding the price for five years represents a fairly substantial risk to any contractor."

See: Cassellholme is on again? Board votes to levy partner municipalities

And: Lack of support from North Bay Council pushes Cassellholme redevelopment to the brink

Euler states in his letter that the City wants the project to "be accomplished in a manner that is prudent and sustainable for all" in regards to a levy against the nine municipalities. "Council does not agree with or support the current cost, the procurement methodology chosen by the Board of Management, or the manner in which the Project is being financed."

But Lowery defends the Cassellholme Board and puts the blame squarely on North Bay's council, saying the project was first contemplated way back in 2007...14 years ago.

"And the original approval was 2010, so if you know you've got a project you're planning, you plan financially for it as well."

He points to Bonfield as a municipality that prepared for it, suggesting North Bay council made little effort to do the same.

"The Mayor (of Bonfield) said he was frankly surprised by (North Bay's) reaction because everybody has known this project was going to arrive at some point. They've done their planning. They've done their saving. They've done what they have to do. They (North Bay) have had a long time to plan and get their finances in order. I guess they thought it would never happen, I'm not sure."

For his part, Euler told BayToday that he has heard of Lowery's complaints about inaccuracies but says the Cassellholme CEO has never approached him with a response to the City's letter indicating what the inaccuracies are.

'The legal firm they hired to help with the procurement process was recommended by the city but we didn't recommend the process they decided on. In a municipal setting with a project this large, it's far more typical to have a process where you pre-qualify the procurement proponents and then you have an open tender so you can disclose what the actual price of the bids are. They chose to do a different process and in some situations, it is completely legitimate, but it makes it really difficult for Council to really analyze the bids in the quote and try to understand what's going on because the final tender prices can't be disclosed." 

And Euler says even the General Contractors Association didn't think it was a fair process, writing a letter to its members and Cassellholme that it didn't feel that the process was fair and transparent.

"For a tender like this you would normally have six or seven groups bidding on it but in this particular case they ended up with two bids and one was disqualified. When you only have one bid for a project this large, yes, Council is concerned about that. We're concerned they didn't get the most competitive bid they could have had they selected a tendering process."

Euler contends that Council has always been concerned about having to pay the province's share of the project upfront. "Council has never been in favour of that and it increases the risk to the city. Council is concerned about the overall cost of the project."

But Lowery doesn't buy that argument. "They've not been blindsided by this. They've been partners in this decision-making process for years, for the entire time. So to put something like that letter out is a little, to say the least, mysterious.

"To me, it sounds like an issue of priorities. This is a priority project and their priorities don't match our priorities. I'm not sure. The amount you would have to pay for this project is almost similar to the amount they would pay for an arena."

Lowery also says he doesn't understand the whole issue of governance that North Bay council is making a big deal about. Both Coun. Tanya Vrebosch and Mayor Al McDonald have resigned from the board citing "governance" issues.

"They have more votes on the board than anybody. It's no different from the library board, the police board, the Capitol Centre board. It's a board and effectively the same rules apply. We've always asked for clarification about governance because they have more seats at the table than anybody."

He says he's never received an answer and that Mayor McDonald's position is to put the entire project on hold and start all over again.

"Let's find a new site, let's have a new committee to look at this."

BayToday requested an interview with McDonald to get his clarification on the issue but got no reply. Last week, McDonald told reporters that "It is a legal matter now so we have to take the steps from a legal perspective to protect the interest of the citizens of North Bay."

When asked if the City planned to take Cassellholme to court, he replied, "Actually, Cassellholme is probably going to take us to court."

Lowery remains defiant.

"The Board's direction is very clear," he told BayToday. "We've got to get this project done!"

Jeff Turl

About the Author: Jeff Turl

Jeff is a veteran of the news biz. He's spent a lengthy career in TV, radio, print and online, covering both news and sports. He enjoys free time riding motorcycles and spoiling grandchildren.
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