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.

"THIS PROJECT HAS GONE FROM 135 MILLION TO OVER 200 MILLION AND COUNTING.

WHEN WE SAW THE RESULTS OF THE FIREHALL AUDIT WE SAW THAT THERE WAS NO PROJECT STEERING COMMITTEE. I HAVE BEEN ASSURED THAT THERE WAS A STEERING COMMITTEE, HOWEVER, THIS REQUESTING IS FOR THE DATES THAT THE COMMITTEE MET, WHO WAS AT THE MEETING AND MINUTES FOR THE MEETING.

I CANNOT BELIEVE THAT THE ADMINISTRATION TELLS ME THEY WOULD NOT OR COULD NOT PROVIDE SOME OR ALL OF THAT INFORMATION, AND I WAS TOLD I WOULD NEED TO BRING IT FORWARD AS A MOTION, WHICH I HAVE.

EPC SEEMS SATISFIED THAT THERE IS NO NEED TO KNOW THAT INFORMATION, EVEN THOUGH, IN LIGHT OF A FIREHALL AUDIT THAT SAID THERE WAS NO PROJECT STEERING COMMITTEE ON A MAJOR PROJECT, THIS ONE IS EVEN BIGGER. "

 

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.