The city's legal department is getting ready to take on a class action lawsuit that is representing victims of May's massive flooding.
The city's variance report showed some unfavorable numbers including more than $439,000 for the legal services department. The reason for much of the additional cost, about $100,000, was to cover lawyer and negotiation fees involving the waterfront development.
But City Manager Tim Commisso said a portion of those legal costs are also to cover fees for an upcoming legal battle.
“We don’t have a reserve for legal fees so we basically expense all our legal fees through our operation budget of about $200,000,” Commisso said.
“There has been a significant amount of external legal work reviewing all of the agreements. I think there was up to 80 documents that accompanied the waterfront closing. The numbers in the report shows a $400,000 variance. Not all of that is related to the class action but we anticipate that by the end of the year that’s how much we will be over budget. That amount we typically cover in other areas.”
The Watkins law firm launched a statement of claim with the intent of it being approved by a judge to become a class action lawsuit against the city on behalf of some of the victims of the massive flooding that took place on May 28. The firm is seeking hundreds of millions in compensation.
The local law firm hopes to file against the city and possibly the Ministry of Natural Resources following a notification period.
Commisso said he wanted to keep the amount they plan to spend on the class-action lawsuit confidential.
He said the projection is for the year’s end so the amount is hasn’t been spent yet. The city usually hires outside firms because they specialize in that area, he said.
Commisso mentioned that they have already looked at a Toronto law firm to handle the class-action lawsuit.
The report also highlights another unfavourable variance from Superior North EMS with $800,000 for maintaining service. Also included was the replacement of an ambulance and a $400,000 shortfall from the province.
The variances is being reported because the province will not fund its 50 per cent share of the ambulance expansion until at least July 2013.
Commisso said they are working on trying to lobby to the province to get that funding back to cover that cost.
“If we do get that share, it reduced that variance by half the amount,” he said. “It may sound like a big number but on the scope of our overall budget it’s a manageable number.”
Facilities and Fleet Department also projected a variance of about $127,000 because of increased fuel costs. Transit operations are expected to account for $75,000 of this variance.
Administration says they expect to work with all departments to implement measures where possible to reduce fuel consumption as well as identifying other cost reductions to offset increases in fuel costs.
Commisso said they have found the $1.1 million in savings to cover some of these variances. Some of these savings could include cuts but Commisso refused to go into specifics.
For the most part, he said there will be a report coming out in August that may have suggestions on cost cutting measures that may cause some changes to services.
“Even though we report it as sort of a worst case scenario, we will do things to make sure that we end up in a surplus,” he said.
The second quarter variance report will go before council at Monday night’s meeting.
