Review swap from outside

Winnipeggers of late have had ample reason to demand that city hall ensures it has solid processes for the buying and selling of public assets. No one at city hall seemed to have a good handle on exactly how, and why, a former deputy fire chief made an agreement to swap three city properties for one parcel owned by a local developer. A review of the affair must answer a host of outstanding concerns on that file.

As Mayor Sam Katz and the administration sort out those details, Canadians have evidence the process that federal departments use to buy goods and services has its own problems. An audit of 442 sole-sourced deals made between July 2011 and January 2012 found a fraction of them were publicly posted with enough information that would allow other companies to compete. Procurement contracts can be sole-sourced without a formal bidding process, but they must be publicly posted to give other suppliers 15 days to submit a better offer.

In only 100 of the contracts posted did the responsible federal department appear to have made a legitimate effort to subject it to competition, according to the office of the procurement ombudsman.

The audit was launched following a complaint by a former civil servant, Allan Cutler, that a series of contracts let by the federal government was written to favour specific people. In 2011, the ombudsman, Frank Brunetta, found the contracts were cooked, triggering the wider review.

Public Works Minister Rona Ambrose's department responded only that the problems raised by Brunetta's office will be addressed, with no assurance it will report publicly on its actions. That essentially tells Canadians, who need to know the public treasury is being used with care, that they will have to trust the department knows best.

The findings demand a fuller, expedited response from the minister on exactly what her department will do to tighten up, to put to rest the suspicions that arise about how those with the authority to approve purchasing contracts manage the expenditures of hundreds of millions of dollars every year.

In Winnipeg, Mr. Katz faces a similar test. His administration, while assuring all the rules were followed, has done a clumsy job of explaining how an agreement -- verbal? written? -- could see three parcels of land with a total assessed value of $1.5 million exchanged for one parcel, with an assessed value of $461,000, owned by the Shindico real estate firm.

Other developers have complained they had been asking for years about whether one of those pieces of land was for sale.

The mayor says everything was done by the book, an assertion that has left city councillors bewildered -- and some steaming mad. The fact is none of the three parcels was put on the market, tested as to their real value against that of Shindico's own Taylor Avenue property, which is said to be worth $990,000. Mr. Katz has assured citizens if the swap does not meet council's approval, it can be undone, even though a fire hall was built on the Shindico land.

Such deals engender suspicion and cynicism among taxpayers who expect those with power to exercise it prudently and in the public interest. That demands a transparency that, so far, has been absent in the Shindico deal. Mr. Katz has called for an internal financial review of the affair, but that comes from an administration that has pretty solidly affirmed the deal followed the rules.

Winnipeggers and council deserve an outside, independent review; one that also scrutinizes rules that oddly allow a deputy fire chief to strike an agreement to exchange publicly owned assets with a private realtor.

That deal has been described as verbal. The city has produced no documents to show citizens that the terms of the deal received the benefit of due diligence from the administration.

Now that senior city administrators have declared the deal appropriate, Mr. Katz has no option but to put it in the hands of external evaluators to assure citizens that public assets were not mishandled.

Republished from the Winnipeg Free Press print edition September 7, 2012 A10