City lawyer takes issue with auditor’s report to police HQ inquiry

Winnipeg’s deputy solicitor testified Thursday in defence of the city’s ability to handle large-scale infrastructure projects, as a months-long inquiry into the police headquarters project entered its third phase.

Lisa Rowswell disputed the findings of a new report prepared by KPMG, which suggested the city has not entirely fulfilled recommendations it outlined 12 years ago in a scathing review of the over-budget downtown headquarters construction project.

Rowswell said the auditing firm failed to fully consult with the public service and account for the many ways in which it has overhauled the checks and balances associated with capital projects.

“The report is only as good as what goes into it,” she told the provincial inquiry panel reviewing what went wrong with the transformation of the former Canada Post office tower and warehouse at 245 Smith St.

“There were a number of elements that they weren’t aware of or things that had been done, but now we’ve got a report out there saying that there’s been a number of things that haven’t been addressed or have been partially addressed.”

Serious concerns with the project have plagued the City of Winnipeg for years. The building opened in June 2016 at a cost of $214 million, well above its original $135-million price tag.

The provincial government called the public inquiry into the project with a goal to ensure the same problems are not repeated on other major projects, such as the $3.1-billion North End sewage treatment plant upgrade.

Rowswell, a contract lawyer for the city, spent hours on the stand explaining the intricacies of the municipal government’s procurement policies and procedures.

She took issue with some elements of the report, which found that while the city is well equipped to guide small and medium routine developments, it lacks “adequate rigor and guidance for large-scale, complex projects.”

Her testimony echoed that of Danny Tooth, the city’s acting manager of major capital projects oversight. Speaking to the inquiry Wednesday, he said the city believes the changes recommended in the 2014 audit have been completed.

This phase of the inquiry is focused on how the city’s internal policies impacted major projects between 2009 and 2014, when the headquarters construction began.

Rowswell acknowledged the city stumbled while awarding contracts at the time, including when it agreed to change the bonding requirements for prospective contractors less than one week before the request for proposals period closed.

Under questioning from inquiry counsel Heather Leonoff, Roswell said she does not remember raising objections to the change, but acknowledged the city’s legal team would have signed off on the decision.

The inquiry panel previously heard the abrupt change made it less feasible for some companies to compete for the work.

“I would agree if you would be making a change like that, you should be giving a longer term for everyone to adjust,” Rowswell told Leonoff.

Rowswell also addressed an internal memorandum she sent to former city chief administration officer Phil Sheegl in February 2012, in which she expressed concern over a contract with Ossama AbouZeid, who was hired as a project director during the headquarters project.

Rowswell warned Sheegl that AbouZeid could only be paid a maximum of $100,000 for his services, or else the city would be legally required to tender the contract.

Despite the warning, the contract was not tendered and AbouZeid — through his company Dunmore Corp. — earned just under $263,000.

Rowswell said the memo was her way of arguing against the contract, and to make clear it was “outside of what the normal rules would be.”

“I was very uncomfortable with a number of things on the police headquarters,” she said. “They were all happening way too quickly. Things were messy. I was trying to get things papered, so I definitely was not happy with how things were rolling out.”

Rowswell said, at the time, she was not confident enough to approach Sheegl more firmly with her concerns.

“Now, you know, having many years more experience, working much more closely with (chief executive officers, chief financial officers), I certainly would be voicing my concerns more vehemently,” she said.

The deputy solicitor noted Manitoba has since introduced whistleblower legislation and the city has a fraud hotline to provide employees an alternate avenue to report concerns, should they arise now.

She is the latest of several witnesses to voice discomfort about how the project was handled.

The day concluded with testimony from Tom Sparrow, who was appointed as the city’s first-ever chief construction officer in January. Sparrow, who has more than 35 years of experience in the public and private sectors, is tasked with providing expert guidance on infrastructure and construction policy.

Mayor Scott Gillingham previously said Sparrow’s first item of business will be to review the audit of the North End sewage treatment plant upgrade project.

Sparrow outlined his responsibilities, before providing the inquiry panel with a broad overview of project management practices, contingency planning and the benefits of having a chief construction officer to provide oversight on capital projects.

He is slated to return before the inquiry panel next week.

tyler.searle@freepress.mb.ca