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City spending probe done by summer

Audit puts spotlight on real estate deals

By: Jen Skerritt

Posted: 01/23/2013 1:00 AM | Comments: 0

An external probe into some of the city's major real estate transactions is expected to be completed by summer.

Last fall, city council voted unanimously to launch an audit of real-estate transactions dating back at least five years following questions surrounding Winnipeg's fire-paramedic station replacement program.

Three city-owned properties, including fire-hall land on Berry Street and Grosvenor Avenue, and a strip of vacant land on Mulvey Avenue East in Fort Rouge -- were initially set to be traded in a land swap with Shindico Realty for Winnipeg's new fire-paramedic Station No. 12, which was built on Shindico-owned land on Taylor Avenue.

The proposed deal was eventually scrapped but raised concerns over the city's processes and prompted some members of council to question previous land deals.

In late December, the city awarded accounting firm Ernst & Young a $225,000 contract to conduct a broader review of Winnipeg's major land sales, transfers, acquisitions and external leasing transactions over the past five years. The firm was previously awarded a $230,000 contract to review the way Winnipeg built new fire-paramedic stations in Sage Creek, Charleswood, River Heights and St. James.

The city authorized initial spending of $500,000 to cover both the review and audit.

Ernst & Young began the real estate audit earlier this month and expects to complete its review in July, city spokesman Steve West said in an email statement. City officials will not disclose what land deals will be included in the audit, but West said auditors will examine whether procedures were followed, whether there was value for money, and whether commissions and management fees were reasonable.

The final report will include recommendations for the city auditor and city council.

"It's going to take political will on the part of people here to follow recommendations that come forward if things are going to change," said Fort Rouge Coun. Jenny Gerbasi, who initially called for a realestate audit during the debate over the water park proposal on a downtown surface parking lot known as Parcel Four.

jen.skerritt@freepress.mb.ca

Republished from the Winnipeg Free Press print edition January 23, 2013 B2

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