City pays off bus contractor

The City of Iqaluit will give $137,124.46 to R.L. Hanson Construction Ltd. as “full and final payment” for the early cancellation of Hanson’s contract to provide a scheduled bus service in Iqaluit.

Under that five-year contract, which started in July of 2003, the Hanson firm supplied a bus and driver, and kept any money raised from selling fares.

But after their budget sessions early last December, city councillors voted to cut the service as of Jan. 10., and provide the Hanson firm with 30 days notice of their intention to withdraw from the contract.

A study by Dillon Consulting showed that ridership on the bus service dropped from 300 riders a week to only 200 a week — at a cost of $16.99 per user.

At the same time, city council was forced to make nearly half a million dollars in cuts to stave off a deficit and create a balanced budget for 2005.

The contract was only about a year and a half old after city council made its decision to back out of it. City officials then began negotiating a compensation arrangement with the contractor.

City councillors voted to approve the payment Jan. 27, after an in camera session. Coun. Nancy Gillis was the only council member to vote against the motion, which was made by Deputy Mayor Chris Wilson and Coun. Theresa Rodrigue.