Winnipeg Free Press - PRINT EDITION

City officials reject blame on fire halls

Everything done properly, administration says

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Winnipeg's administration doesn't believe it did anything wrong in the troubled fire-paramedic station replacement program.

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

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

However, the administration does not accept 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 bylaws, council policies, administrative standards and practices in a fair manner, per due process and best intentions."

The administration's self-assessment is in stark contrast to the findings of forensic auditors from Ernst & Young, who concluded the fire hall project was marred by gross mismanagement and uncompetitive bidding that favoured local developer Shindico Realty.

The administrative report is its response to the 14 recommendations from Ernst & Young on how the city can prevent a repeat of the fire hall replacement problems.

Ernst & Young concluded former Winnipeg chief administrative officer Phil Sheegl was active in all stages of the oversight of the replacement program and directed former fire chief Reid Douglas to run the program. The review said Reid wasn't qualified for that role and Sheegl failed to assist him.

Many described the review as the most critical condemnation of Winnipeg's civic administration. It found the fire hall replacement project was badly managed and over budget, 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.

Mayor Sam Katz and his executive policy committee will review the administration report on Wednesday.

Many councillors were surprised by the release Friday afternoon of the complex, 12-page report.

Coun. Paula Havixbeck said Katz and EPC 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 a council seminar on it.

Among the administration's responses in its report is a surprising agreement to limit the contracting authority of the CAO to $1 million -- a complete reversal of its position last fall.

The CAO's authority had been set at $10 million, which allowed Sheegl to split the $15-million fire hall project into four smaller contracts, thus excluding any of them from council scrutiny.

The new fire halls 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 of the Shindico-owned Taylor Avenue land on which the new fire station No. 12 is built.

In November, executive policy committee agreed to lower the CAO's contracting 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.

However, the administration now recommends the contracting authority be lowered to $1 million to comply with an Ernst & Young recommendation to prevent contract-splitting and avoidance of council scrutiny.

One Ernst & Young recommendation the city administration does not support is sharing a project bidder's information on design substitutions with all bidders in the tendering process.

Ernst & Young said sharing suggestions on substitutions with all bidders would lead to "a truly open and transparent process."

However, the administration said bidders would not offer design substitutions if they knew their ideas would be shared with competitors.

Republished from the Winnipeg Free Press print edition January 18, 2014 A5

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