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The Winnipeg Firehall Scandal: Following the trail of deception

The City of Winnipeg's top civil servants have defiantly closed ranks around Fire Chief Reid Douglas whose handling of a $15 million project to build four new fire stations is at the heart of a scandal that's shaking public trust in city government like never before.

Douglas submitted a report last week to a city committee seeking another $2.3 million from the 2013 budget to cover cost overruns on the new firehalls.  He's already spent the $15.3 million allocated for the project but only three fire stations have been built and the last, in St. James, only just started.  Douglas twice increased the size of the fourth firehall without telling city councillors why, then tried to hide the increased cost  from them, even as late as last month (September).

He wrote in his report supporting the extra funding that :
"The Fire Chief had the authority to change the scope of the project in order to accommodate these operational needs and efficiencies as they were anticipated to fall within the $15.3M budget."
It was nice of him to clear himself of any suggestion of wrongdoing, even though Mayor Sam Katz declared he couldn't defend the shenanigans around the St.James firehall and Paula Havixbeck, chair of the Protection Committee, is so angry she's ordered Douglas to show up before the committee to answer questions left unanswered in his report.
Barry Thorgrimson, the city's director of property, planning and development, on the other hand, co-authored the Douglas report and obviously had no problems with it. And Deepak Joshi, the city's Chief Operating Officer, whose name also appears on the report, told reporters that Douglas had acted within his rights to supersize the fire station and megasize the cost while using an accounting trick to hide the fact from councillors.

By defending Douglas against the anger and distrust of mayor and council, these administrators have tied their professional futures to that of the fire chief, who should already be cleaning his office of personal belongings to speed up the job when his departure is made official.

Douglas answered none of the questions people have raised about the St.James firehall fiasco and provided no documentation to support his version of the facts -- memos, emails, dates of his decisions, reasons for them, and, above, all, who else in the government knew what he was doing.

We've scoured the pubic record and believe we have some of the answers that Reid Douglas is hiding.

From the Douglas report under the heading History:

"On November 21, 2008 a plan outlining the urgent need for WFPS infrastructure replacement, identified by a 2005 WFPS internal review, was presented to the Chief Administrative Officer (CAO). In the summer of 2009, a committee of WFPS and United Fire Fighters of Winnipeg (UFFW) members met with the CAO and Senior Administration to discuss how to address replacing the inadequate facilities, and significantly improve emergency response times and operational efficiencies in a timely manner."

That unnamed CAO is Phil Sheegl. Interestingly, the report begins with the heading Authorization, under which there are boxes identifying the Author (R. Douglas and B. Thorgrimson),  Department Head (R. Douglas and B. Thorgrimson),  CFO (M.Ruta, CFO) and CAO. 

Except, instead of finding the name Phil Sheegl under CAO, you find "D.Joshi, COO".  

Sheegl did not put his name to the report.  Why?
Newspaper stories refer to the initial size of the new St. James station as 10,000 square feet (which would eventually grow to 14,000 sq. ft.)  We can't find a single news story that refers to that size.  We conclude that this was the proposed size in the RFQ---the request for qualifications---issued by the city in the spring of 2009.

Initially, the plan for the new firehalls was to have private developers build them and the city lease them.  The RFQ went to developers to narrow down the pool of those who were interested and able to do the job.  Prospects were asked if they could design, build, finance and maintain four new fire-and-paramedic stations in Charleswood, St. James, River Heights and Sage Creek.

The national economy was still struggling.  In its 2009 budget, the federal government put together a stimulus package, which included  low-cost loans to municipalities for infrastructure like housing and even fire halls.

It was a deal too good to pass up. The city bit. 

In July, 2010, the city formally approved taking the CMHC loan for the new fire halls. Out the window went the design-build idea, and Winnipeg signed on the bottom line for a 15-year $9.7 million loan to build its own firehalls. It had unspent cash sitting around from previous budgets that would top up the project funding at $15.3 million for four shiny new fire stations. Reid Douglas, then the deputy fire chief, was put in charge.

The first thing Douglas did was to "change the scope of the project", which is the fancy bureaucratic way to say "make it bigger." In March, 2011,  a story in the Canstar weekly The Metro discussed a possible location for the new fire station which is apparently 20 percent bigger already and includes a firefighting museum.

Canstar Community News - ONLINE EDITION
Talk of new fire hall location heating up
Fire department eyeing spot near Route 90 for Berry St. replacement, deputy chief says
By: Matt Preprost
Posted: 03/23/2011 3:34 AM | Comments: 0
Almost 100 years old, the fire hall at 200 Berry Street is long past its useful life and needs to be replaced, fire officials say.
Fire official are eyeing a two-acre plot of land at Portage Avenue and Century Street for the relocation of Station No. 11 on Berry Street.

The Winnipeg Fire Paramedic Service is hoping to build a new fire and paramedic station and fire museum inside the cloverleaf just west of Century Street, Reid Douglas, the services deputy chief, confirmed in an interview.

The plan is not yet finalized, and needs to go through several civic committees and public consultation before being approved, Douglas said.


If all goes to plan, a new $4 million, 12,000 sq. ft. station will be built in the northwest corner of the cloverleaf next to the St. James Hotel.

The 12,000 sq. ft. number will be repeated in every story on the St.James station until September, 2012. 

The cloverleaf location for the firehall was not the first choice.  In July, 2011, then-Deputy Chief Douglas told an open house on the relocation of the St. James firehall that he had considered two other locations first.

He said the fire department had tried to buy land from the Assiniboine School Division.  They had apparently been so persistent that, said Douglas, the division sent a cease-and-desist letter demanding they back off. 

They also had their eye on a former Esso station on Portage Avenue and Queen Street. They even paid a down payment on the land, he said. But "stalled environmental scans and remediation slowed the process.

A new home was built at the edge of the vacant lot and the cost of expropriating homes became too pricey, he said."

The cloverleaf  "was the only site where there was enough land for us to build on," he told area residents.
The location, said Douglas, had been suggested by Shindico Realty, the contractor building the station. (Cue irony music)

That's an important clue to when at least one important change to the project was made. Councillor Scott Fielding (St.James-Brooklands) told the Winnipeg Free Press a few weeks ago "(a)n earlier plan for Station No. 11 called for some form of firefighting museum, but that was dropped before the city awarded a design and construction contract to Shindico Realty."

In his report last week, Reid Douglas mentioned the dropping of the museum in a paragraph designed to be as confusing as possible.

"In February 2010, WFPS presented a report to the SPC on Protection and Community Services which outlined a plan to strategically replace its aging infrastructure. The preliminary findings of a deployment study initiated by WFPS identified the need for additional scope to Station 11, to create operational efficiencies (removal of museum, inclusion of aerial ladder, haz-mat unit and training facility)."

The implication is that the "removal of museum" was recommended by the "deployment study" which he implies was in February, 2010. As you can see, the museum was still in the plans in March, 2011.

A four-month traffic study (begun in February, 2011, we presume) was approved by the city's public works department in June, Douglas told the open house.  The plan then worked its way through the committee process, and nobody twigged on the fact that the fire station was 20 percent bigger than originally planned.  Note whose eyes saw the relevant reports.

Fire hall clears another city hurdle, one more to go
By: Matt Preprost
Posted: 07/20/2011 1:12 AM | Comments: 0
The relocation of Station No. 11 on Berry Street was given the green light by a city committee last week.
Councillors unanimously approved closing part of the west side of Century Street north of Portage Avenue, at the Assiniboia community committee Tues., July 12, essentially giving the fire department the go-ahead to proceed with construction.
The request will go before the mayor’s executive policy committee and then to city council on Wed., July 20, before council prorogues for the summer.
Councillors Scott Fielding (St. James-Brooklands), Grant Nordman (St. Charles), and Paula Havixbeck (Charleswood-Tuxedo) sit on the committee.

November, 2011, five months later and construction of the St. James station hadn't started yet.  A story in the Metro explained why (or so the reporter thought). We'll put money that this was when the second change to "the scope" of the project was ordered, to make it 14,000 square feet.  
The Metro
Canstar Community News - ONLINE EDITION
Design changes delay fire hall construction
By: Matt Preprost
Posted: 11/30/2011 1:24 AM |
Original site plan for the replacement of Fire Station No. 11. The plan has been updated to move the station closer to Portage Avenue. (SUPPLIED PHOTO)

Construction is expected to start within weeks on a new $4 million replacement for Fire Station No. 11 in St. James, fire officials say.
Construction was originally supposed to begin in October. However, changes to the station’s site plan were made and had to be resubmitted to the city for approval.
"Our target is within the next couple of weeks," said Christine Friesen, project manager for the Winnipeg Fire Paramedic Service. "Before Christmas. That’s what we’re hoping for."
Friesen said the original plan called for the station to be situated too far back on two acres of land in the northwest corner of the cloverleaf next to the St. James Hotel.
The new plan calls for the station to be moved closer to Portage Avenue so it is easier to build and will have more of a visual presence in the community, Friesen said.
"When it was set back, you couldn’t see it that well," she said. "Speaking with the councillor, this is a flagship kind of station, and needs more of a public presence."


The location for the new 12,000-sq. ft. Station No. 11 was chosen based on computer models and historical response time data, and will feature four drive-thru style bay doors.

It would be another four months, and almost a year after the deadline for completion in order to qualify for federal funding, that construction would begin.

Canstar Community News - ONLINE EDITION
Fire hall build to start in March: city
By: Matt Preprost
Posted: 02/29/2012 1:23 AM | Comments: 0 

City officials now say construction of the new $4 million replacement for Fire Station No. 11 in St. James is expected to begin in early March.
City administration recently approved foundation permits for the work to begin around the first week of March, according to Coun. Scott Fielding (St. James).
By July, 2 years after the firehalls project was approved by city council, all looked well. Three new fire stations had been built and the fourth was underway. What could go wrong?

Then it went wrong.

In August, the CBC ran a throwaway story about Shindico.

Questions arise over old fire hall put up for lease

CBC News
Posted: Aug 23, 2012 6:41 AM CT
A Winnipeg property developer put an unused fire hall up up for lease this summer, but a city official says a deal to transfer the property over has not yet been completed.

It was the kind of story that would be a one-day wonder in most circumstances. Shindico owner Sandy Shindleman had no comment the first day or two then issued a statement saying, in effect, "Oops. Honest mistake. My bad."

But the story wouldn't go away. It grew. Fire Chief Reid Douglas stepped forward to defend Shindico, saying he had made a verbal deal with the company for a land swap that included the land Shindico put up for lease.  A swap for what?  Why, for the land where the new fire station in River Heights was built.  You see, Winnipeg had built a firehall on land it didn't own.

Douglas had launched a firestorm, the kind of fire no fire department can put out. 

The more reporters dug, the dirtier the firehall scandal looked.

Secret land swaps, single source contracts, fishy tendering designed to hide information from city council, "everybody knew", to quote the mayor, became two internal audits because, apparently, "nobody" knew what went on and nobody knows what's going on today.

Douglas was trying to pull the wool over the eyes of city councillors as late as September, a month after the scandal began to unravel.

Big cost hike for fire hall feared
Councillors told St. James station may be up to $2.3M over budget

By: Bartley Kives
Posted: 09/27/2012 1:00 AM | sept. 27

A new fire-paramedic station under construction in St. James may be as much as $2.3 million over budget, city councillors have been warned.
But it's unclear whether the price tag for the new Station No. 11 at the intersection of Portage Avenue and Route 90 is going up because of changes to the scope of the project or because of actual cost overruns.

The new station No. 11, whose budget was pegged at $5.8 million, is one of four new fire-paramedic stations under review by the city auditor and external legal and property experts. 


In a briefing last week, several members of executive policy committee were told the new Station No. 11 was subject to a price increase that may wind up being anywhere from $300,000 to $2.3 milllion. But city finance officials have yet to determine the precise amount of the increase -- and the exact nature of the change, said council property chairman Jeff Browaty (North Kildonan) and protection chairwoman Paula Havixbeck (Charleswood-Tuxedo).

"The numbers are being reviewed at the moment and it sounds like there may very well be an overrun," Browaty said Wednesday. But councillors are still waiting to find out if the increase is the result of an imprecise initial estimate or a change to the station design -- or something else entirely.

"We still don't have the details as to whether it's a cost overrun or a scope change," Havixbeck said. "I'm optimistic this review will reveal why the changes were needed and what the differences are."

Havixbeck said councillors are curious as to why they were not told earlier about any financial issue regarding Station No. 11, especially since a $62,000 cost overrun for Station No. 27 was the subject of a city report.

The reason nobody was telling the councillors anything has become obvious. They were desperately trying to keep the lid on the overspending on the St. James station even at that late date.

This is where many of the reporters get lost. We'll try to clarify it.

The total budget for the four new firehalls was $15.3 million. The cost of the first three firehalls came to $9.4 million  (Sage Creek, $3 million; River Heights, $3.2 million; Charleswood, $3.2 million).

That left $5.9 million.  The St. James station was to cost $4 million, leaving a cushion of $1.9 million.

When Douglas confessed in September that the cost of the St. James station had risen to $5.8 million, he was hoping to hide the increase within the $1.9 million cushion for overruns. That way he could say the project to build 4 firehalls came in on (total) budget.

But when the bean counters toted up all the costs for the St.James station, they were at least $2.3 million more than the $4 million budget.  As long as the costs were $1.9 million or less, Douglas could get away with it. When they topped $1.9 million---and $2.3 million is more than $1.9 million---the jig was up. There was no more money in the honeypot. He had to get city council's approval for more money to finish the St. James station. There were no other options.

Havixbeck has ordered Reid Douglas to show up before Protection Committee to explain what happened.  

She had better ask pointed questions about why Douglas was trying to deceive her and her colleagues as late as one month ago.

That would be a start. Because the electorate wants to know why he has been deceiving us for the past two years and why the other city administrators think that's just fine.

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