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City to release audit into police HQ project

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The Northwest corner of the newly renovated PSB building at Smith Street and Graham Avenue, formerly the Canada Post offices and now the headquarters for the Winnipeg Police Service. An audit into the project is expected to be released Tuesday, July 15.

MIKE DEAL / WINNIPEG FREE PRESS FILES Enlarge Image

The Northwest corner of the newly renovated PSB building at Smith Street and Graham Avenue, formerly the Canada Post offices and now the headquarters for the Winnipeg Police Service. An audit into the project is expected to be released Tuesday, July 15. Photo Store

Troubled projects at Winnipeg's city hall have prompted another audit — this time delving into the controversial construction of a new police headquarters.

While Winnipeggers continue to absorb the details of the 192-page EY audit on real estate transactions, an audit into the police headquarters project is set to be released Tuesday.

This audit, ordered by council at the end of January, examines the construction/renovation work on the former Canada Post warehouse and office tower at the corner of Graham Avenue and Smith Street.

The EY audit, released last week, only looked at the purchase of the Canada Post complex and the related arrangements with a local broker involved in the purchase.

The audit was carried out by consulting firm KPMG. A companion study, a value-for-money review done by another firm, will compare the costs of similar facilities to determine if the final price tag is justified.

The reports will be presented to members of council at two separate, closed-door meetings Tuesday. The reports will then be made public at a special executive policy committee meeting later that day and are expected to be debated publicly in council Wednesday.

Costs for the Smith Street project escalated from an early estimate of $135 million — when the project was promoted as a cheaper alternative to renovating the PSB building — to a final price tag of $210 million last fall.

The audit was spurred by an outpouring of public anger towards Mayor Sam Katz and his supporters on council who narrowly squashed an attempt in November for an outside review of the project.

The project's costs seemed to climb on a monthly basis and civic administrators defended the escalating increases, describing them as the result of essential design changes.

Katz, backed by his executive policy committee, speaker Devi Sharma and Coun. Thomas Steen, voted against examining the project in November but by the end of January council voted 14-1 to order the audit.

Katz insisted the cost overrun is only $17.2 million, not $75 million, explaining that earlier cost figures were only estimates which never should have been used as financial starting points.

Space in the 11-storey office tower is being leased commercially and the city hopes to recoup some of its costs by selling the tower for at least $20 million.

Construction on the building is largely completed but the police will not begin moving in until the fall, a process that’s estimated to take a further six months to complete.

History

Updated on Friday, July 11, 2014 at 6:13 PM CDT: Adds fact box; adds photo.

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