Throughout Winnipeg’s fire-paramedic construction scandal, new questions have emerged faster than officials could answer them.
The multitude of mysteries surrounding the construction of four new fire-paramedic stations have forced Mayor Sam Katz and city auditor Brian Whiteside to call for an external review that will take months to complete after someone from outside Manitoba is chosen to do the work in early November.
And other issues surrounding city land transactions have led council to vote unanimously in favour of a broader real-estate audit that may very well consume the resources of the city auditor for a year or more.
It’s entirely reasonable to allow auditors, accountants and other investigators to spend months trying to get to the bottom of what can be described charitably as a confusing mess at city hall. But there are some questions that should not take months to answer.
And when it comes to the very simple question of who exactly ordered the scope of the Station No. 11 project to increase, the answer should have come in a matter of minutes, if not seconds.
The new Station No. 11, under construction in the northwest cloverleaf at the intersection of Portage Avenue and Route 90, is the largest of four new fire-paramedic stations built under what was originally a $15.3-million project.
The new Station No. 18, built on the same city-owned site as the old No. 18 on Roblin Boulevard, came with a price tag of $3.2 million. The new Station No. 27, built on land the city purchased from Qualico on Sage Creek Road, cost $3 million.
The new Station No. 12, infamously built on Shindico Realty-owned land on Taylor Avenue, also came with a price tag within the same range – $3.3 million.
But the precise price tag for the new Station No. 11 has never been made public by the city. Unlike the construction contracts for the other three new fire-paramedic stations, the award information for Station No. 11 has not been published on the City of Winnipeg’s materials management website.
If you employ some basic arithmetic, the cost of this new station should be $5.8 million, assuming the fire-paramedic station replacement program’s overall budget remains $15.3 million.
But in late September, members of council’s executive policy committee were warned the new Station No. 11 had increased in scope by as much as $2.3 million. What the councillors were not told is why precisely this occurred, as it was unclear whether the rising price tag was the result of a cost overrun or an increase in the size or scope of the project.
Last week, however, Mayor Sam Katz revealed the cost of Station No. 11 has increased because somebody asked for the size to increase to 14,000 square feet from 10,500 square feet.
This move is what is known in the construction industry as a change order — a request to amend the design or size or materials involved in a construction project after a contract is awarded, or sometimes even after work has already started.
Change orders can prove costly for whomever asks for them, as contractors large and small typically charge a premium for last-minute changes to any given project. But change orders are not inherently evil, as contractors need this mechanism to protect themselves from the whims and sometimes irrational demands of indecisive or unorganized clients.
On the other hand, disorganized or foolish clients can and do lose their shirts to change orders. This is why very large and complex jobs, such as the $190-million Investors Group Field construction project and the $194-million Winnipeg police headquarters renovation, employed guaranteed maximum prices for their construction component instead of using low bids to peg their costs. In these two cases, the prospect of something unexpected happening made it a safer financial bet to come up with a maximum project cost ahead of time.
At one point in 2008, the City of Winnipeg actually placed all major construction projects on hold to get a handle on capital cost increases, including some that resulted from change orders. The city even hired a construction specialist to limit the potential for change orders to mess with the capital budgets.
Given the city’s recent prudence in this area, what happened at Station No. 11 is unusual. Senior city officials have painted a very murky picture of the scope change at the Portage Avenue fire hall, where the extra size and space remain unclear.
Depending on whom you talk to at city hall, that extra space was initially intended to house some form of firefighting museum. When that proved untenable for some currently undisclosed reason, somebody suggested moving the hazardous-materials unit out of Station No. 9 on Marion Street.
But this potential move was panned as madness by the United Fire Fighters of Winnipeg, given the intersection of rail lines, highways and heavy industry in St. Boniface, the area of greatest need for a haz-mat unit.
In the aftermath of that backlash, a report expected to come forward soon may instead recommend the relocation of a decontamination unit currently housed at Station No. 7 in The Maples.
The implication of all this is ugly for the city: It appears as if somebody ordered up more space for Station No. 11, but the intended use seems vague and the actual need for that extra space — never mind the accompanying cost increase — is a complete mystery. These questions will be answered in a forthcoming report, city officials promise.
That’s very nice to know, but the question remains: Who actually made the change order?
Katz said he does not know. With all due respect to the mayor, that in itself sounds rather remarkable.
There are not many people employed by the City of Winnipeg who are capable of issuing a change order for a capital project. When it comes to the fire-paramedic station construction project, only a few individuals have oversight roles.
Winnipeg Fire Paramedic Chief Reid Douglas was in charge of the project until he was stripped of that responsibility sometime over the past eight weeks.
A paramedic, Kristine Friesen, has been named as a project manager, but she does not appear to serve a managerial role within the fire-paramedic service. According to the city’s annual compensation disclosure, she earned a regular paramedic’s salary in 2011.
Deepak Joshi, the city’s chief operations officer, signs off on some of the city’s most important administrative projects. So does Phil Sheegl, the city’s chief administrative officer and senior civil servant.
It wouldn’t be a stretch for Katz to put all four of these people in a room — along with the chief financial officer and the controller for the fire-paramedic service — and say, "Hey, which one of you folks made that change order?"
The mayor certainly has the power to do this. It would only take a couple of minutes. But for some reason, he either has not chosen to ask this question — or he has asked, but doesn’t wish to disclose the answer right now.
Given all the previous questions swirling around the fire-paramedic station replacement program, this doesn’t exactly further city council’s ongoing efforts to restore public confidence in the City of Winnipeg.
The city is the client on the fire-paramedic construction project. It’s about time that client started becoming a lot more open with its shareholders, the citizens of Winnipeg.