WINNIPEG – Incompetent, questionable and highly mismanaged — that’s how some councillors described the process under which four fire halls were built within the last year, one on land the city didn’t own.
“This is mismanagement at the highest levels, ” said Coun. Russ Wyatt, “some of the worst I’ve seen.”
A long-awaited audit into the controversial dealings released Monday called the process “not well managed” and over budget by $3 million.
To see the whole audit click here.
“The results are sobering,” Mayor Sam Katz said. “In this $18 million project we find questionable gaps.”
The program has been plagued by highly publicized problems, including a deal to trade three city properties for land for one of four new stations. The deal was scrapped by city council after the station was already built, and the land is still owned by developer Shindico.
Chief administrative officer Phil Sheegl resigned last week after the city’s executive policy committee, council’s powerful core, demanded his removal.
“The person most responsible has to be Sheegl,” Coun. Harvey Smith said. “That’s what we were told.”
Former fire paramedic chief Reid Douglas, who oversaw the fire hall replacement project, was fired in late September. The city wouldn’t release the reason for his dismissal but said it wasn’t because of the fire-paramedic review.
“A whole group” of city officials should be fired over the trouble-plagued project, Smith said.
“It’s basically shoddy, the whole thing,” Smith told reporters. “When I listen to this, I felt I wanted fire a whole group of them.”
The consultants later presented their report to the executive policy committee, a group of councillors hand-picked by the mayor to serve as his cabinet. They were told “there were no direct breaches of code of conduct” and “nothing criminal” in the controversy that nonetheless has sunk the public careers of both the city’s fire chief and its top bureaucrat.
The city released a summary of the Ernst & Young review Monday afternoon, saying:
- The project was not well managed by a number of parties within the city.
- Oversight and appropriate due diligence were lacking for a project such as this.
- The project was assigned to an individual who did not have the appropriate expertise nor the resources within his department to manage it.
- Certain city policies were not followed and/or the interpretation of the policies may not have met the expectations of council, including the splitting of contracts to avoid council budget approval and award authority.
- The project will be completed at a cost that exceeds the originally approved budget by at least $3 million.
- All contracts for the project were awarded on a non-competitive basis to one firm. The two competitive processes conducted did not result in the award of a contract.
- A decision was made to begin construction of Taylor Station #12 before the city had an agreement in place to acquire the land. This decision effectively bound the city to some form of transaction to obtain ownership of the Taylor Avenue land.
- The construction of a Portage Avenue station was awarded based on two contracts, one for the foundation and one for completion of the building. Starting the construction of Portage Station #11 with a foundation-only contract effectively bound the city to building a station with a size and resulting cost that was not within the council-approved budget.
The Ernst & Young report included 14 recommendations regarding the city’s policies, processes and organizational structure. Highlights of the recommendations include:
- City council should examine the basis under which they allow single-source contracting, evaluating the threshold where single-source negotiation decisions should be brought to their attention. Council also should consider contract award delegation limits as it relates to single-source contracts and the expected disclosure to council when transactions have not occurred in a manner established by city policies.
- City council should also consider revising the organizational structure so legal services would report to city council rather than city administration.
- The public service should develop, for council approval, policies regarding land exchange transactions, constructions contracts related to land acquisition and authorities to be sought for letter of intent or similar agreements. The policy regarding the declaration of surplus property should also be clarified as to when council approval is to be sought.
- The city’s procurement processes should be reviewed to determine the acceptability of substitutions and developing a strategy to ensure all proponents have access to the same information.
- The public service should also update internal processes regarding capital budget submissions and develop a means to account for non-cash transactions when reporting total project costs. Further, before issuing building permits on city projects, controls should be put in place to ensure all ownership rights in the subject property are unconditionally held by the city.
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