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City won't take blame for fire hall scandal

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City administration won't take the blame for troubled fire hall project, a new report says. The fire hall project had a total budget of $15.3 million but ended up costing $18.6 million. That figure is expected to climb higher after the city finalizes the purchase for the land where the Taylor Avenue fire-paramedic station, pictured, was built.

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City administration won't take the blame for troubled fire hall project, a new report says. The fire hall project had a total budget of $15.3 million but ended up costing $18.6 million. That figure is expected to climb higher after the city finalizes the purchase for the land where the Taylor Avenue fire-paramedic station, pictured, was built. Photo Store

Winnipeg’s administration doesn’t believe it did anything wrong with the troubled fire hall replacement program.

The administration says it’s willing to abide by most of the recommendations contained in a scathing audit of the fire hall program but states the members of the public service followed proper procedures and policies, according to a report to the executive policy committee released late Friday afternoon.

"The Public Service has acknowledged that there is room for improvement and has already implemented initial changes to improve reporting," to council, states the introduction of the administrative report.

However, the administration is not accepting any blame for what went wrong.

"Throughout the process of delivering the (fire hall replacement) program, the Public Service accepted the recommendations of council, and followed existing City of Winnipeg by-laws, council policies, administrative standards and practices in a fair manner, per due process and best intentions."

Among the administration’s responses contained in the documents, one is most surprising: agreeing to limit the contract authority of the chief administrative officer (CAO) to $1 million — a complete reversal of its position from the fall.

The CAO’s authority had been set at $10 million, which allowed former CAO Phil Sheegl to split the $15-million fire hall project into four smaller contracts and sheltered all of the contracts from council's scrutiny.

The administration’s self-assessment of its actions is in stark contrast to findings from a team of forensic auditors from Ernst & Young, who concluded the fire hall project was marred by severe mismanagement and a non-competitive bidding process that favoured local developer Shindico Realty.

Ernst & Young concluded that former CAO Phil Sheegl oversaw all stages of the replacement program and that Sheegl directed former fire Chief Reid Douglas to run the program. The firm's audit said Reid wasn’t qualified for that role and that Sheegl failed to give him any assistance.

The new administrative report is the city's response to the 14 recommendations from Ernst & Young on how the city can prevent a repeat of the problem-marred fire hall replacement program.

The Ernst & Young review was described by many as the most critical condemnation of Winnipeg’s civic administration. It found that the fire hall replacement project was badly managed and over-budget; local developer Shindico was given preferential treatment to build all four stations; and several civic policies were broken.

Council subsequently agreed to hire an outside law firm to determine whether the administration did anything illegal or exposed the city to a lawsuit.

The report will be reviewed by Mayor Katz and his executive policy committee at its Wednesday meeting.

Many councillors were taken by surprise by Friday afternoon's release of the report, a complex 12-page document.

Coun. Paula Havixbeck said Katz and members of the executive policy committee fail to understand the importance of transparency.

"Releasing such a significant document late on a Friday afternoon leaves no one time to read it or grasp its implications," Havixbeck said, adding Katz’s office should have held a news conference and conducted a council seminar on the document.

Katz’s executive committee agreed in November to lower the CAO's contract authority to $5 million, despite an attempt by Havixbeck and other councillors to lower it to $1 million.

The administration said at the time it was unnecessary to lower the amount, arguing the $5 million limit would ensure projects were completed in a timely fashion with less red tape.

Now, however, the administration is recommending the contract authority be lowered to $1 million to comply with an Ernst & Young recommendation to prevent contract-splitting and the avoidance of council scrutiny.

One of the Ernst & Young recommendations administration does not support is sharing information for design substitutions provided by a bidder in a tendering process with all bidders.

Ernst & Young said sharing suggestions on substitutes with all bidders leads to "a truly open and transparent process."

But the administration said bidders would not offer design substitutes if they know their ideas would be shared with competitors.

The fire hall project had a total budget of $15.3 million but ended up costing $18.6 million. That figure is expected to climb higher after the city finalizes the purchase for the land where the Taylor station was built.

 

aldo.santin@freepress.mb.ca

History

Updated on Friday, January 17, 2014 at 6:02 PM CST: Adds details.

9:05 PM: Adds context with fire hall project figures.

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