The Black Rod

The origin of the Usher of the Black Rod goes back to early fourteenth century England . Today, with no royal duties to perform, the Usher knocks on the doors of the House of Commons with the Black Rod at the start of Parliament to summon the members. The rod is a symbol for the authority of debate in the upper house. We of The Black Rod have since 2005, adopted the symbol to knock some sense and the right questions into the heads of Legislators, pundits, and other opinion makers.

Location: Winnipeg, Manitoba, Canada

We are citizen journalists in Winnipeg. When not breaking exclusive stories, we analyze news coverage by the mainstream media and highlight bias, ignorance, incompetence, flawed logic, missed angles and, where warranted, good work. We serve as the only overall news monitors in the province of Manitoba. We do the same with politicians (who require even more monitoring.) EMAIL:

Wednesday, January 29, 2014

The St. James Firehall stonewall crumbles under the facts

Drop dead, said the City to Colin Craig.

Oh, not so succinctly. But the message was clear---beat it, get lost, scram.
It took less than a dozen words to slam the door in Craig's face, lock it, bolt it, and hope he went away.
Craig, you see, is the local director of the Canadian Taxpayers Federation. And more than a year ago, he politely asked the City for briefing notes, memos, emails and any other documentation they had regarding the process by which Winnipeg's new Fire Hall No. 11 ballooned in size to it's present corpulent state.

Not that it's gargantuan in the way the Canadian Museum for Human Rights is -- four football fields of empty space enclosed within a steel and concrete skeleton. But it is almost half again as big as the other three firehalls built as part of the same infrastructure replacement program.

And Fire Hall No. 11 is the fishiest project of the entire Sheegl-Shindico Bid-Rigging Scandal that's consumed the public's trust in City Hall. Built without a contract, millions of dollars over budget, so big that nobody knew what to do with the extra space, it piqued the interest of the Taxpayers Federation. Hence the freedom of information request.

The city replied: "In this case the records you have requested do not exist."

That, in a word, is preposterous.

If the documentation is there, then Colin Craig is being stonewalled by a city administration that's hiding something far bigger than anybody has imagined so far.

If the documentation is not there, that means somebody has swept the records clean, wiped his fingerprints off and skipped,
confident that the city administrators will make no efforts to recover what they don't want anybody to see, anyway.

Didn't we say it's time to call in the cops?

We scoured the Ernst-and-Young audit of the firehalls fiasco, as well as our clippings file, for clues to what the City of Winnipeg administrators are hiding.

We uncovered the exact time period that should be flooded with the  documentation the Taxpayers Federation is looking for.

Why the city administration claims they can't find a thing becomes very, very suspicious.

*  In 2009 the Winnipeg Fire Department got the okay to build four new fire stations.  They went looking for a suitable design.

They found one in London, Ontario, and in January 2010 they signed a contract to use the design. But already there was distinction between the three firehalls they intended to build in Winnipeg suburbs and the one station going up in St. James.

*  The City issued a tender for fire stations based on the Ontario design. It was amended in March, 2010:
B2.1 The Request for Proposals (RFP) contained herein documents the City of Winnipeg’s (City) invitation to organizations (Bidders) to present Proposals in accordance with the requirements identified in this RFP for the development of up to four (4) newly developed Fire Paramedic Stations (“the Project” or “WFPS Station”) for the Winnipeg Fire Paramedic Service (WFPS).

Specifically, the City is requesting submissions from private sector firms, individually or in consortium, for:
(a) construction (inclusive of site work) Sections A and B; and/or
(b) design, and construction (inclusive of site work) Section C;
of up to four (4) 750-930 square metre (8,000-10,000 square foot) facilities for the purpose of providing fire and paramedic service operations.
One Suburban Fire Paramedic Station in the Vicinity of 5000 Roblin Boulevard
Two Suburban Fire Paramedic Stations
- one in the vicinity of Grant Avenue and Waverley Street; and
- one in the vicinity of Bishop Grandin Boulevard and Lagimodiere Boulevard
One Core Fire Paramedic Station in the vicinity of Portage Avenue and Berry Street

As the auditors noted:
"Within less than a month of issuing the...RFP, the City issued amendments ... that called for the construction of 3 suburban stations based on the M&M design and the design and construction of an urban station Portage – Station #11."

In short, the suburban stations would be built on the Ontario design while Fire Station #11 would be designed separately.

*  June, 2010.  Only Shindico bid on the tender, and their bid was way too high.  Shindico said that the Ontario design could not be built on the Winnipeg budget, but that they had a design of their own that could. 

Regarding Fire Station #11, here's how the auditors reported Shindico's position:
"With respect to the core or urban station... the response from Shindico stated:
“To replace the firehall located at Portage Avenue and Berry Street, Shindico’s proposing the new Fire Paramedic Station be incorporated into the green space located immediately adjacent to the west side of the southbound lane of Route 90 on the north side of Portage Avenue. The property is owned by the City of Winnipeg. .......The Cost to develop the Core Station on Portage Avenue is
$5,991,500 or $518.11 per square foot ....The Core Station is more complex than the Suburban Stations” Based on this statement the design for the Core station, as proposed by Shindico, was to be 11,564 square ft ."
The size of the St. James firehall was already growing.  The auditors note that this was before the city saw any design incorporating a hazmat unit (or fire museum). 

* The auditors continued to document the decisions regarding Station No. 11:
June 28, 2010
Material Management and WFPS decide to move forward with Shindico regarding development of their concepts for Portage Station # 11. (MC#17) Suburban stations are expected to be subject to public tender.

September 2, 2010
... Shindico notifies Chief WFPS, via email, that they are working on an alternative station design for suburban stations, based on a request from the City. Email notes Shindico’s belief that M&M design can’t be done for City’s budget . Chief WFPS cautions regarding this approach, but gives go ahead regarding
Station #11. Email exchange is forwarded to CAO by Shindico.
September 3, 2010
The Current Chief WFPS responded to (Shindico) indicating: I am only able to legally negotiate on the specification that was put out to all the bidders. That specification is the Murphy and Murphy specification for the 3 suburban fire paramedic stations. To do anything else at this time puts the city in a position of serious risk from the other bidders.
Station 11 is a different animal as it had not (sic) accompanying design and falls under its own category of negotiation. That is certainly open to further discussion.
I would suggest Bob that before your company expends a lot of time and energy designing a new building, we resolve some of these issues first.
Lets go full steam ahead on the 11 Station project though. I will meet with materials management on Tuesday to begin phase 2 of that process and let you know the result.
*  Here's where the St. James firehall story gains traction. This story appeared in The Metro, one of Canstar's weeklies:
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   March 23, 2011
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.
It's March, 2011.  This is the first time there's any talk about a fire museum.  And note the size of the station---12,000 sq. ft.  That's probably a rounding-up of the 11,564 sq. ft. of Shindico's station design. 

But this time round it's more than just the cost of the "core station"; it includes a museum.  Was that always the intent? Surely there must be some documentation explaining if it was.

*  In June, 2011, the city hired Williams Engineering to track the progress of the firehalls project.
July 7, 2011
 “Meeting of Progress Minutes” # 2 indicated that by July 7, 2011 the design to Portage - Station #11 was 90% complete.
October 14, 2011
William’s MPM of this date indicates that the cost estimate for Portage - Station#11 is $5.1 Million. 

Oct. 19, 2011   The City issues a foundation permit for Station #11.

January 27, 2012
The construction of Portage Station was awarded
based on two contracts. One contract for the foundation and one for the completion of the building. The commencement of the construction of Portage Station # 11 with a foundation only contract, effectively bound the City to the construction of a station with the size and resulting cost that was not within the approved Council approved budget.
February 6, 2012
 A meeting was held between Legal Services, the MRE, the Current Chief WFPS and the WFPS Project Coordinator. During the meeting the following was discussed:
► The builder, Pre-Con was going bankrupt and needed payment for the Taylor property.
► There was an understanding that the proposed land exchange transferred excess value to Shindico. Such excess value was to be dealt with via a price reduction on Portage Station #11.
February 23, 2012
William’s issued a(n) MPM which included a new cost estimate from Shindico for Portage - Station #11, at $5.7 million before signage and permits.
*  April 26, 2012
The Current COO and CFO approved the foundation only contract for Portage -Station #11.
July 7,  2012
The Metro
Fire hall changes irk residents
By: Matt Preprost    07/18/2012 1:02 AM

Recent changes to the site plan of the new Station No. 11 fire hall in St. James has left a ringing in the ears of nearby residents.
Last week, city fire chief Reid Douglas and Winnipeg Fire Paramedic Service project manager Christine Friesen appeared before the Assiniboia community committee seeking approval to move the location of the station from the back end of the property near Century Street up to the front of the site near Portage Avenue.
The committee approved the changes following a two-hour public hearing, a move city officials say will increase visibility of the station, improve traffic sight lines and reduce the overall footprint of the station by about 600 square feet.

At the beginning of the hearing, a lawyer for the Viscount Gort Hotel argued the station’s construction was "unlawful" and it is being built without provincial approval.

Richard Good said Viscount owner Phillip Kives was not consulted, and the hotel could suffer a loss of revenue and reputation as a result of the decision.

The city proceeded with undue haste, Good said, calling for construction to be stopped until there was further consultation.

Coun. Scott Fielding (St. James-Brooklands) noted the WFPS held a public consultation about the station at the Viscount Gort in July 2011.

He also noted a letter sent by the hotel to the community about the hearing misled residents into believing the station was expanding in size and taking up more greenspace inside the cloverleaf when the opposite was true.
*  Fielding was 100 percent wrong. The station WAS expanding in size. He's since claimed somebody lied to him.  He's not named that "somebody."
*  The following month, August, 2012, the entire firehalls fiasco started to unravel.
CBC reporter Sean Kavanagh stumbled across Shindico floating a lease on the old St. James firehall, which was still owned by the city. That led to the revelation of a land swap with Shindico which had never been approved by city councillors and the fact that one firehall was now built on land the city did not own -- land owned by Shindico.
August 30, 2012
A meeting was held in the Current CAO’s office, where apparently the MMM informed the Current Chief WFPS that the WFPS were building the Portage Avenue station without proper award authorities in place.
The auditors elsewhere clarified that bafflegab in their report:

"It is unclear as to the point in time that the CAO (Phil Sheegl), COO (Deepak Joshi) and Legal Services were aware that Portage - Station #11 was being constructed without a contract and/or appropriate contract award authorities in place. MM, the CAO (Phil Sheegl), CFO and COO (Deepak Joshi)  were aware a contract was not in place by the end of August 2012 based on the content of the following email from the MMM:
For everyone’s sake and peace of mind, we need to determine the approvals that are in place, or not, for these Fire Stations.
This topic was briefly discussed at the CAO’s office today, but it is clear that the City is well underway building at least one $6 million dollar station with approval for only <$1 million."
*  To sum up, the budget was blown.  The city administration had the bright idea of spending the little bit that was left to dig the foundation for Fire Station No. 11, and to ask City Council for more money to finish the project the following year ( 2013).  In the meantime, Shindico would continue construction with the promise it would get paid.

The auditors observed:
► In respect to Portage - Station #11 contracting, we have been informed by both Williams and Legal Services that one of the reasons the contract was split into two components, the foundation and the remainder of the building, was because sufficient Council approved funding was not available to allow for an
award for the full value of construction costs. This would be against City Policy.

But note this odd -- and unexplained -- reference the following month:

September 19, 2012 
Corporate Finance sent email to CFO indicating:

Mike, here is an updated draft of the report. This considers the information provided in the spreadsheet and the information provided by Reid by way of email and meeting earlier today. It is a moving target - from what Reid is now saying, the budget for the three suburban stations construction was too low - he references $2 to $2.4 million in his email, based on the St. Thomas experience. Assuming he budgeted $2.2 million for these stations, the overall budget of $15.34 million works. This would also be supported by the fact at the same time, the City had received responses back from Shindico on 200-2009B that the buildings could be delivered for $275 per square foot ($6.1 million total). As the stations actually came in at, on average, $3.1 million each, that puts the budget $2.8 million shor
...-what were the redesign efforts on 11 that took place to save $1.2 million?

* Here's where the trail of the change order for Station No. 11 gets hazy, in large part because there was no contract for its construction so nobody really knew what Shindico was building -- except Shindico.

Then-Fire Chief Reid Douglas told the auditors that the original design with the museum was rejected by Public Works as a traffic distraction.  When was that? Is there no documentation, especially since Douglas went on to state: 

Chief WFPS’s Comments Regarding Review of Ernst & Young Draft Report Dated September 5, 2013
"It was assumed the sq. ft. of museum elimination would translate to a 4th bay.  This requires additional accomodation in crew space as well thus increasing overall 3000 sf for apparatus bay and living space"

Here, definitely, is discussion of increasing the size of Fire Station No. 11.  This would require a change order.  Where are the emails, the memos, the documentation surrounding this discussion?
The auditors then complicated the story with this comment:

► The sizing of Portage - Station #11 did change significantly as a result of WFPS eliminating the museum component and adding space for the Hazmat unit. The original RFP specified a station of approximately 10,000 sq. ft. To meet the specification requested in the original RFP, Shindico’s response included a
station design that was 11,564 sq. ft. The final design for Portage - Station #11 was 14,459 sq. ft
Here is the first reference to a firehall that's 14,459 sq. ft. large. It's gone through two design changes, and city officials say there's no paperwork anywhere that discusses how and when the final size was reached.
And the mention of a Hazmat unit is new.  Once the museum was kiboshed, they obviously didn't know what to do with the space. So they began running with various ideas.  First was moving the Hazmat unit from St. Boniface into Station #11.
No way, declared United Fire Fighters of Winnipeg president Alex Forrest.

That idea was junked.  But the firehall was being built 3000 square feet bigger and something had to fill all that extra space.
By early October, 2012, we learned it would be the Hazmat unit from the Maples.
And one other thing got tossed along with the St. Boniface Hazmat--- the Fire Chief.  Reid Douglas was out of a job.
No sooner was his departure announced, than COO Deepak Joshi jumped to blame him for the debacle.
Chief thought bigger station would cost same
By: Bartley Kives    Posted: 10/26/2012 1:00 AM

FIRE Paramedic Chief Reid Douglas had the authority to supersize the new Station No. 11 because he believed he could add 33 per cent more space to the Portage Avenue structure without going over budget.

Winnipeg chief operations officer Deepak Joshi said Douglas had the authority to go ahead with the change because the chief believed the extra work could be done without exceeding his budget.

"He felt it was the right thing to do at the time," said Joshi, explaining the new station was still being designed after its concrete foundation was poured. There was no reason for the chief to believe his change order would result in such a cost increase, based on the information at his disposal, he added.
Joshi believed in October, 2012, that there was a change order. 
Today he says there's no record anywhere

We repeat, preposterous.
The city administration can start looking between March, 2011, when the Fire Chief said the new St. James station would be 12,000 square feet and July, 2011, when Williams Engineering reported that the design for the station was 90 percent complete. 

Somewhere there they'll find internal documentation discussing the scrapping of a museum, what to do with the extra space, the need for another 3000 square feet if a hazardous materials unit is to be shoehorned into the building.
The declaration that they can't find a single note, email, or document must be seen as part of the internal cover-up.

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Sunday, January 26, 2014

Enough is enough. Only the police can unravel the Firehalls Scandal now.

It's time to call in the cops.

Talk to anybody in this city and they'll tell you the public perception is that the Winnipeg Firehalls Scandal has crossed an invisible line that separates collusion from corruption.
Credence in anything the city's administration says died a swift death when the Canadian Taxpayer's Federation revealed how city officials responded to their question of who supersized the new St. James firehall to become 40 percent larger than originally designed.

Er, said Winnipeg's senior civil servants, there's no documentation on that. Nothing. Nix. Not an email, not a note, not a scribble in the men's room.  Zip. 

Given that the Firehall No.11 (St. James) is being blamed for most of the $3 million cost overrun on the $15 million project to build 4 new fire stations, the city's answer is completely unbelievable.

Did somebody sweep the files clean of all references to Fire Station 11? CAO Phil Sheegl and the other top administrators were questioned by auditors and they had no paperwork?  Were the auditors even told that there wasn't a document anywhere to explain why one fire station was built so big, that nobody knew what to do with the extra space?

At this stage, only the police can get answers to that question and every other outstanding question about the firehalls debacle. 

City council spun off a legal review of one aspect of the project---whether the city can be sued for favoring one developer, Shindico, over other potential bidders by giving them privileged information the others didn't have. 

Is it too late to ask for a separate legal opinion of what potential breaches of the law might be the subject of a police investigation given all the chicanery conducted by Winnipeg's "civil service"?

Or should we skip jumping through hoops and just ask the police and Crown to give us an opinion?

We combed the Ernst-and-Young audit of the firehalls project for examples of fishy activity that should interest police investigators.  A sampling of what we found, including some of what we dug out ourselves:

* Shindico had an "inside man" who guided them on how to circumvent the public tendering process.  The company was given information that was unavailable to other potential bidders and which set up a situation where then-CAO Phil Sheegl could scrap the tenders and give the contract to Shindico. 

A Shindico spokesman admitted to the auditors that "somebody" within the city administration advised them to submit their own design for firehalls, even though none of the other bidders were advised they could do that.

Mr. X has never been identified.  He's still there, willing and able to tip Shindico off to inside developments.  The auditors didn't ask for his name or else Shindico refused to provide it.  They know perfectly well who their Deep Throat is.  Only a police investigation can demand that information.

* The bidding process was rigged to give the entire $15 million contract to Shindico without a fair and open bidding process.  That was the conclusion of the firehall audit.  But believe it or not, it might be bid-rigging, but it's not against the law.  The law only criminalizes bid-rigging if it's between competitors, not a civil servant and a potential bidder.

But remember the term "procurement fraud". 

* Sheegl arranged it so that Shindico could make an excess profit on the firehalls deal.  Shindico could submit an artificially low price for the new firehall on Taylor in River Heights because it didn't have to include a price for land.

The fire station would be built on land owned by Shindico, which would be swapped later for three other parcels of city land.  Shindico would make a profit on the construction of the firehall, and another profit on the development of the swapped land. 

* Only the Crown prosecutors can determine what constitutes an illicit favour.  Does Shindico's hosting of Phil Sheegl, the man who sole sourced their firehall contracts, at one or more Winnipeg Jets games count?  It was and still is the most valuable, hardest-to-come-by sports ticket in Winnipeg.

(The Black Rod,  September 14, 2012  Seen... Phil Sheegl sitting in Shindico's corporate seats. )

Four days after CBC reported on the secret and still-unapproved land swap (in August, 2012), Mayor Sam Katz bought a house in Arizona from the sister of a Shindico executive for $10 down.  He afterwards claimed he paid fair market value, but refused to answer any questions, like how much and when, saying it was nobody's business.

* Winnipeg's senior civil servants, such as current-CAO Deepak Joshi, who is deeply implicated in the firehalls scandal, have said everything was done by the book.  That raises the obvious question, how many other insider deals have been done by Sheegl, Joshi and others that they're not telling us because they, too, were done by the book?

* Why can't we get a straight answer about the St. James firehall? It was built in two stages to fool city hall about its real cost, it's way over budget, it was larger than the other three fire stations built as part of the same project, although nobody could say why? In fact, the scramble to find a use for the extra space was embarassing and very suspicious.

(More about the St. James station in days to come.)

Four years ago, Calgary had its own concerns about how contracts for construction projects were awarded.   Boy, a lot of their concerns sound familiar, don't they.

September 20, 2010
Calgary to probe construction procurement fraud

staff writer

The City of Calgary has hired an accounting firm to look into allegations of fraud in construction procurement, but a candidate for mayor in the upcoming elections says the auditor isn’t independent enough to protect the public interest.

“Even though it may not be true, the perception is that they are being hired to audit their own work,” said Calgary Alderman and mayoral candidate Ric McIver.

Deloitte & Touche LLP will review the city’s procurement practices and address serious concerns about fraud. The company is already the city’s external auditor and has been for a number of years.

“Those people that chose this auditor are running the risk that something may not be fully disclosed. Whether it’s good, bad or ugly the public needs to know,” he said.

The firm will start work later this month.
“It’s less independent than it should have been and doesn’t meet the highest standard of independence,” said McIver. “They should have chosen one of the other consulting firms.”

In response to a Request for a Proposals (RFP), Deloitte & Touche was selected to determine if there is any substance to allegations of procurement fraud raised by the former city auditor.

In June, city auditor Tracy McTaggart was fired for heading a department that failed to meet international accounting standards.

The decision was made after a review into the auditor’s office by PriceWaterhouseCoopers found a wide range of inefficiencies.

McTaggart released an audit on May 20 which also revealed systemic problems in the way contracts for construction projects are awarded.

One of the main conclusions of this audit is that there is an increased risk of fraud through the use of change orders and non-competitive procurement.

According to McTaggart, change orders were issued on purchase orders over $25,000 that totaled $747 million in a three year period ending April 2009.

However, many change orders were missing from contract files and, as a result, she said it was not possible to assess the underlying cause for the change order.

There was also a disproportionate use of sole/single sourcing to procure goods and services, without evidence to support the rationale for the lack of a competitive process and to ensure compliance with the Agreement on Internal Trade (AIT).

In response to McTaggart’s findings, city manager Owen Tobert produced his own report.

His report stated that the administration conducted its own analysis and found that there have been no circumstances of procurement fraud.

The Internal Control Risk Management group reviewed almost 600 files representing a value of $600 million or about 80 per cent of the dollar value of all the procurement files.
The group found that change orders and documentation were authorized and adequate.

Given the contradictory conclusions of the two reports, Tobert felt it was necessary to hire an independent auditor to address any lingering doubt in the minds of the city council or the public.

At this time, Tobert said, the administration is seeking expert advice from Deloitte & Touche to undertake a more complete and risk-based review of procurement activities that occurred between 2006 and 2009.

The risk-based investigative review will focus on higher risk procurement activities that are estimated to have a greater likelihood of occurrence and a more significant impact.

Following council’s approval, administrative staff identified seven higher risk areas in the RFP, including files related to single source contracts, change orders and limited tenders.

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Friday, January 24, 2014

Murder suspect to murder victim. The Black Rod in 2008, the Free Press in 2014.

If part of the Winnipeg Free Press story by Mike McIntyre about the killing of Justin Demarais seems familiar, a tad too familiar, there's a good reason. 

You've read most of the details about the murder victim being an alleged perp himself in an exclusive on this blog. In 2008.

Since the Free Press scalped our story but edited out important specific details, it's only right that they be presented once more so readers can A) see for themselves, the lifestyle that years later, led to Demarais' body being found in an Andrews St. rooming house. And B) how citizen journalists scooped the MSM.


Hip Hop Murder?, More Twisting Taman 

Testimony, and the return of...

... The investigation into last weekend's mysterious abduction in the 500 block of College Avenue is a homicide investigation.

Winnipeg police have been told the still missing, still unidentified abductee had his throat cut to the extent he was almost beheaded, his head hanging on by a thread.

The street was awash with blood when an ambulance got to the scene after a call to police that somebody was seen being stuffed into the trunk of a car.

An 18 year old "man" was charged Monday with Assault Causing Bodily Harm and Forcible Confinement. Expect the charges to be upgraded once a body is found.

The current accused has the same name (and age) as the founder of Bassment Records, a local hip hop and rap record label, who is better known by his street name, Big Fun.
Bassment Records is linked by cross-membership and association with the Northside Kingz, a band whose motto is "WE MAKE TRACKS - FUHK BITCHES AND GET MONEY. WHAT ELSE CAN WE SAY . HAHA"


The following posts on the Bassment Records site may be a roadmap to what happened early Saturday morning on College Avenue near McGregor.

Lil Balla
8 weeks ago

Keep It G
is dat true da u n$k guyz joined up wit indian posse?
5 weeks ago

Carlos Roussin
N$K fucks up I.P'z but they aint around no more they all in jail making no noise cause they dead
4 weeks ago

Ashley Desmarais
2 days ago


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Monday, January 20, 2014

City Hall Flipfloppers

Winnipeg Mayor Sam Katz says there's no need for an audit of the latest city mega-million-dollar boondoggle---the project to convert the downtown post office into a new police headquarters.

Everything you need to know about the reason for the huge cost overruns was explained in a report to his executive policy committee in December, he says.

Russ Wyatt, chairman of city council's finance committee, says there's no need for an audit of the latest city mega-million-dollar boondoggle. It's too expensive, he says, and for what? It will only say exactly what the audit of the project to build four new firehalls said---that the city's chief administrative officer (since departed) was incompetent.

Councillor Brian Mayes, a member of EPC, says there's no need for an audit of the latest city mega-million-dollar boondoggle because it's much ado about nothing.  "What we're really looking at here is 12 or 13 percent overrun ... most of it being financed through debt," he sniffed.

And yet last week Mayes was among the first of the councillors who voted against a police HQ audit to flipflop
and announce he was now supporting it. 

A day later Katz said, whaddya know, all of EPC except one member (unnamed) had agreed to support an audit -
just to get the public off their backs.

That means there are now enough votes to pass a motion for such an audit, a total reversal for Katz and his supporters who stood shoulder-to-shoulder at the last council meeting to denounce those councillors who argued in favour.

But when the biggest promoters of the audit, Councillors Paula Havixbeck and Jenny Gerbasi, were each asked on radio for the two top questions they wanted answered, they put the audience to sleep with a barrage of  mumbo jumbo.

The public does not want to know how the price of doorknobs and fire-rated cable resulted in cost overruns. 

The public does not want to know if former CAO Phil Sheegl was more incompetent on the police headquarters project than he was on the firehalls project. 

The public may want to know ...
how Brian Mayes can be so ignorant as not to understand the original budget of $135 million was blown by $75 million, which is NOT 13 percent, but it won't get the answer from an audit.

The big question is who misled city council at virtually every step of the police headquarters project. And why the mayor and his cabal have been covering up for them so furiously.

The deception started early.

In November, 2009, council was informed that the cost of redeveloping the old post office, including the cost to buy the land and buildings, would be an estimated $136.5 million. 

But, despite having eight consultants (including Shindico)  do due diligence on the purchase, not one of them realized, or wrote, that the purchase price could NOT be offset by the sale of the Public Safety Building. The land it sits on was donated to the city with the understanding it would always be used for civic purposes.

And, the cost presented to council did NOT include furniture, fixtures and equipment (known as FF&E), which would add another $22.1 million to the bottom line.

The administration then launched a  process that lasted the better part of a year which consisted of false starts and u-turns and culminated in, you guessed it, a sole-sourced contract by Phil Sheegl.  Sound familiar?

* They advertised for a project coordinator. Then cancelled the search.
* They advertised for a construction manager and accepted a joint bid from two companies, one of which walked away.
* They then hired a project manager to oversee the work of the construction manager.  The new guy? He sat on the board of the Winnipeg Blue Bombers with Phil Sheegl and came highly recommended -- by Phil Sheegl, who gave him a sole-sourced contract worth a quarter of a million dollars.
* The search for a construction manager included a reduction in the amount that a winning bidder would have to put up as a bond. The change was authorized by Phil Sheegl.

"The city, in consultation with various surety companies and at the urging of the Surety Association of Canada, determined that lowering the bonding requirements on the headquarters project could provide a broader base of potential bidders and potentially provide savings on the project cost," declared a report submitted to council.

"Bulls**t. That's absolute hooey," said Steven Ness, president of The Surety Association of Canada, to the Winnipeg Free Press. "No one from this organization ever encouraged any such action by the City of Winnipeg at all. It begs the question of who is saying we did."

The Construction Manager and consultant engineer "often disagreed which created a difficult situation for the Public Service to manage." states the latest report provided to city councillors.  The audit should detail what these disagreements were about.

While these shenanigans were underway, the city hired the engineering firm AECOM Canada to do the design work on the police headquarters.

A year earlier, council's intrastructure-renewal head, Coun. Mike O'Shaughnessy, openly questioned why the city was doing business with AECOM after a city report blamed the company for $12 million of cost overruns on the West End Water Pollution Control Centre because of "design errors, incomplete design and design clarification".  The city was forced to redraw part of the plans for the plant.

Wouldn't you know it ... AECOM's completed design was so full of design errors that the city had to redraw the plans for the post office reno. 

And that wasn't the worst of it.

After the first batch of cost overruns were brought to council's attention, Sheegl was tasked with negotiating a "guaranteed maximum price" on the police HQ.  He got one and brought it to city hall.

The problem turned out that it was neither "guaranteed" or "maximum". There were so many "except ifs" built into the GMP that council was essentially agreeing to a blank cheque.

The audit will be asked who, besides Sheegl, knew the GMP was a fraud.

The Sheegl defenders are shifting the blame to AECOM, saying that the GMP was based on a design that was only 30 percent complete.  But that salient fact was kept from councillors.  Why?

Councillors have been informed that Sheegl and his successor as CAO, Deepak Joshi, provided comments on the GMP draft.  The public should know what they said, because Joshi sure won't tell them.

He's not only refusing to give councillors answers about the police HQ project, he's tried to intimidate Coun. Havixbeck into stopping her probing.
And the mayor and his supporters have actively helped this cover-up.

At the last council meeting, Havixbeck tried to get an answer to the question of project oversight.




Her motion was defeated.  The conspiracy of silence won't have the same clout with the auditors.
Coun. John Orlikow made this astonishing revelation when debating the motion for an audit into the police headquarters fiasco:
The auditors into the firehalls scandal were giving councillors a closed-door look at their report. 

They had interviewed the city's top administrators and collected some usable information, but 90 percent of their information came after those interviews and only when they got a chance to go through the emails exchanged over the projects.

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Sunday, January 05, 2014

CMHR finances are dimmer than ever despite Toronto puffery

The snow's up to our roofs, it's colder in Winnipeg than on Mars, and the mayor thinks that clearing the snow and ice off city streets is an unnecessary luxury.  Sometimes you really need a laugh.

The Globe and Mail came to the rescue Saturday. In a puff piece about the over-budget, overdue, over-hyped Canadian Museum for Human Rights, writer Roy MacGregor gushed that "(m)ore than 75,000 people"  have donated money to build the thing.

"It is a striking and memorable building, if rather eccentric."

Which is Toronto-high society-speak for "Yikes, is it ever ugly!"

The punchline of the piece is how wrong MacGregor's awe-inducing declaration of public support for the epic money pit is.

By all accounts, the real number of donors to the CMHR is barely 7500.  That's right, one-tenth of what MacGregor said it was. Seven thousand, five hundred. And, to quote MacGregor "some as little as a few dollars."

So the family of multi-millionaires really are cheap panhandlers. 

They're bumming a couple of bucks here and a few bucks there to build a monument to their billionaire father while claiming its a sign that the public supports their conceit.  
The Globe and Mail scribe saw the real number, couldn't believe it wasn't a typo and added a zero to make it more "realistic". 

That's the only explanation, other than the usual journalistic incompetence.

Apart from the fake news promoted by the Globe and Mail, there is real news from the CMHR courtesy of museum CEO and chief cheerleader Stu Murray.

He was interviewed on CJOB a couple of weeks ago and dropped a bombshell that was overlooked by all the "professional" reporters in town.

Guest host Richard Cloutier was tossing Murray some softball questions about the cost of the museum ("$351 million. Period. Full stop.") when he asked what the $21.7 million in annual operating costs would cover.

"That pays for (cough) pays for operations, lighting, umm, it pays for our PILT, which is Payment in Lieu of Taxes...So it pays for all the heat...everything that is involved in running an institution or a building.
" said Murray.


For the first time ever, officials of the CMHR have said that the operating funding it gets from the federal government will pay for utilities and taxes. 

As late as 2011 they were saying they needed to "augment operating funds to cover PILT".  Prior to that they said they had forgotten to include utilities and taxes in the money they needed each year and would the federal government please cough up more cash to pay those bills.

Obviously the feds have said that the $45 million bailout they gave the museum in 2011 was all the extra money they would get. This is a game changer.  Two months ago we wrote that fundraising for the CMHR had collapsed.

Now it appears the prognosis is even worse.

Ever since Gail Asper, chief fundraiser for the Friends of the CMHR, launched her hate campaign against Canada's Ukrainian community in 2011, fundraising has fallen off a cliff. They claim they raised $4 million in 2013, but since much of that is in installments, they're actually pulling in a fraction of that each year. 

All the government money has been spent as of the end of December, and they've just started installing the exhibits. The only money to pay for that is what the Friends can raise from outstanding IOUs and new money. 

We thought the Friends would be responsible for covering the tax bill, but it looks like the museum itself will pay out of operating funds. That means the Friends will still have to backstop the museum as well. The museum already owes more than $4 million in back taxes (your tax bill could drop by 1 percent if they paid up) and will owe $8 million or more next June.  If this was a privately owned building it would already be up for tax sale.

It gets even worse when the CMHR has to start paying back the $45 million advance it got. Starting in 2018 they will have six years to pay off the advance out of operating funds. Say that's $8 million a year (advance plus interest), on top of $4 million, or $5 million or $6 million a year for taxes and utilities and half the annual operating funds are committed.

They'll have to sell an awful lot of t-shirts to make up the difference.

Stu Murray was less than convincing that the museum could do it.

He was asked to address the skepticism about the museum -- "that two...five years from now you'll be back on CJOB doing a fundraiser..."

Well, he said, the museum has spaces to rent out, programming over and above the regular admissions, and "additional events to create additional revenue."  Hazy, enough?
Murray said the rights museum won't undercut the admission price of other art galleries and museums in the city. 

The Manitoba Museum of Man and Nature charges $8 for adults and $6.60 for students and seniors for one venue, $21 and $17 respectively for admission to the museum, science centre and Planetarium.

They would need 500,000 single adult admissions to pay off their tax bill each year.

He added: "If you would give us the opportunity to walk through the doors and you don't like what you see, I'll refund your money."

Maybe he didn't realize what he was saying, but Murray actually undermined his own boosterism.

"You can go to any city in the world for a convention and have a great convention centre; we're going to have a spectacular convention centre but the hook is you can't do something around human rights like you can do it in Winnipeg. And that's going to be a great, great angle for us."

"...If you just built a square box and said I hope that people will come and see this because of the subject matter, they wouldn't come. They're gonna come because ... I have taken personally about 3500 people, since I've been on the job, through that building ... the wow factor is palpable. I mean people feel it. In order to bring people to Winnipeg to talk about an educational value around human rights the first thing that has to happen was the right decision -- build an iconic building."

Get it? He knows people wouldn't cross the street to see a museum about human rights, so what $351 million really bought was a fancy building.

Winnipeg is going to get a new convention centre ( 8 blocks away) "and we're the anchor", he said.

So far the CMHR is the anchor around the neck of taxpayers.

P.S. For those who were taught that the plural of roof is rooves---that's now considered archaic.

And for the record, wind chills of -51C like those we had all last week equate to 60 below zero on the Fahrenheit scale.  Why don't weathermen say so.

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