News of city's $4.5M payment to RTM 'shocking,' councillors say

City councillors are expressing dismay and anger over news the city forked over $4.5 million for the month of September to the contractor of the LRT, after being told for weeks they hadn't paid a single penny since the Confederation Line went into service.

OC Transpo GM John Manconi mentioned a September payment in a scrum with reporters in early December

Rideau Transit Maintenance (RTM) is an arm of the consortium that built the $2.1-billion Confederation Line. (CBC News)

City councillors are expressing dismay and anger over news the city forked over $4.5 million for the month of September to the contractor of the LRT, after being told for weeks they hadn't paid a single penny since the Confederation Line went into service.

"Why does council and the community continue to receive updates that are lies?" Rideau-Vanier Coun. Mathieu Fleury tweeted on Saturday. 

On Sunday, Kitchissippi Coun. Jeff Leiper said he'd been telling his constituents that Rideau Transit Maintenance (RTM) — which oversees the upkeep of the $2.1-billion line — has not been paid by the city since the line opened to the public, due to its poor performance. 

But as CBC reported, it turns out the city paid RTM $4.5 million for the month of September because it was contractually obligated to do so. That revelation took some councillors by surprise.

"That's shocking to me, and it makes me feel as though I have not been completely forthright with residents," Leiper told CBC.

"The trust issues that are going to arise from this are going to be huge."

Somerset Coun. Catherine McKenney agreed.

McKenney said they read about the September payment on the CBC website, "and was quite surprised, given what I thought were pretty clear answers to the contrary."

City manager Steve Kanellakos sent a memo to councillors Saturday evening explaining that the city was obliged under the contract to pay for September service, irrespective of the LRT's performance that month. (CBC)

Manconi mentioned September payment to reporters

The city normally would pay RTM month by month, but the company needs to meet certain criteria first. 

Many councillors and members of the public believed the city had not paid RTM a cent since it made its last final milestone payment of $143 million, after the Confederation Line was handed over on Aug. 30, 2019.

On Saturday morning, CBC reported the city issued a $4.5-million cheque in November to RTM for service for the month of September.

That evening, the city sent an email to CBC to say that transit general manager John Manconi had told reporters in a scrum following the Dec. 3, 2019, finance and economic development committee that the city had made a payment to RTM in September.

"So the concession just started. They're not going to get October. They're not going to get November. And now we're into December," Manconi said during that scrum. "They had a payment for, I believe, for the tail-end of September, which [is] the way the payment mechanism works and then you adjust from that point on."

According to a memo sent to councillors from city manager Steve Kanellakos Saturday evening, the "project agreement effectively required the city to pay the full amount for the first contract month of service irrespective of the contractor's performance during that month."

Deductions for poor performance on the part of RTM would be subtracted from future monthly payments, according to the memo and the CBC story.

Kanellakos said RTM has not been paid for October's service, while the performance deductions for November and December are still under review.

Scrum not public information: councillors

Despite Manconi's mention of a September payment to RTM, some city representatives said they had no idea the company had received any money.

"Until yesterday, my understanding was that RTM had not been paid any money for the maintenance payments or any monthly maintenance payments," citizen transit commissioner Sarah Wright-Gilbert told CBC Sunday.

She added that a reporters' scrum — where journalists huddle around an official, jockeying to get questions answered —was "absolutely not" sufficient communication on the issue of payments to RTM.

In early December, OC Transpo boss John Manconi made mention of a September payment at a reporters' scrum, much like this one on Nov. 29, 2019. (Judy Trinh/CBC)

Others agreed.

"Clearly something that is said in a scrum is not something that's generally available to the public, generally available to councillors, generally available to the people who need the information," said Leiper.

"What I would hope that we'll hear from the city over the course of the next couple of days is that they're going to do a much more proactive job of sharing information."

And McKenney, who is also a member of the transit commission, said they spent part of the weekend checking notes about questions they'd asked about the contract in the past.

"If in fact there was one scrum where [the city said] a September payment had been made, I have to say that that's been offset by many other comments to what I feel is the contrary," said McKenney.

Official said in January no payments made to RTM

In a different scrum with reporters Nov. 6, after a dramatic transit commission meeting, Manconi said payments were being held back from RTM ever since the launch of the service in mid-September.

"That's right, so all of September — a portion of September because it was from the 14th — and then October," Manconi said, a couple of weeks before the city made the $4.5-million September payment.

At a news conference about the downed 80-metre electrical cable on Jan. 16, Troy Charter, OC Transpo's director of operations was asked by a reporter: "When was the last time RTM was paid?"

Charter responded: "RTM, I don't believe, has received any monthly payments."

Mayor Jim Watson was not available for comment on Sunday. Instead, his press secretary referred CBC to the city manager's memo. 

However, on Monday Watson tweeted a copy of a letter he'd sent to Kenellakos requesting "a comprehensive overview of the City's rationale for providing payments to RTG in both August and September of 2019" by the end of the week.

The mayor is also requesting quarterly updates to the transit commission and members of council on any payments made to RTG.


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