Report set to stoke the flames

The fire chief was turfed and the city CAO quit ahead of today's release of an audit into the fire-hall project. What's next?


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Winnipeg's fire-paramedic chief has been fired. Its chief administrative officer has resigned. City councillors are decrying what they call the absence of public trust in municipal government.

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Hey there, time traveller!
This article was published 21/10/2013 (3336 days ago), so information in it may no longer be current.

Winnipeg’s fire-paramedic chief has been fired. Its chief administrative officer has resigned. City councillors are decrying what they call the absence of public trust in municipal government.

These events have all occurred in the wake of Winnipeg’s fire-paramedic station replacement program, originally conceived as a simple plan to build four new buildings to improve upon aging and inadequate infrastructure.

Instead, the program wound up being the subject of an external review by an Ottawa-based team of auditors from the consulting firm Ernst & Young. The firm’s final report, originally expected in May, will have far-reaching implications for the City of Winnipeg and could result in further staff departures.

The former fire-paramedic station on Grosvenor Avenue.

The report is slated to be released today. What follows is a primer on the construction project, the long-awaited review and the people who stand to be most affected by it.


How did we get here?

Key events that led the city to call a review of the fire-paramedic station replacement program:


The construction project

In 2010, city council approved a $15.3-million plan to build a new fire-paramedic station in Sage Creek and replace three existing stations in River Heights, St. James and Charleswood. The city also issued a search for a private partner to help locate land for those stations and build them. Deputy chief Reid Douglas oversaw the project, which was awarded to Shindico Realty.

Each new station was built in a separate manner. A new Station No. 18 was built on the same Roblin Boulevard site as the old station. A new Station No. 27 was built on Sage Creek land purchased from Qualico, another developer.

A new Station No. 11 was slated for construction on Portage Avenue, inside a city-owned cloverleaf at Route 90, to replace the old Station 11 on Berry Street. And new Station No. 12 was built on Taylor Avenue to replace old Station No. 12 on Grosvenor Avenue.


The scandal

In August 2012, Shindico listed the Grosvenor Avenue site of old Station No. 12 for sale before council declared the property surplus. It then emerged the new Station No. 12 was built on property owned by Shindico — and slated to be swapped for three city properties.

One of those properties was the old Station No. 12. The other was the soon-to-be-decommissioned Station No. 11. A third was a vacant city property on Mulvey Avenue East. Douglas, who had been promoted to fire-paramedic chief, took responsibility for arranging the land swap with the help of city real estate officials.

News of the swap — as well as the construction of a city facility on land it didn’t own — upset most councillors, who complained of being left in the dark about changes to the project along the way.

They also took issue with the proposed value of the land-swap properties as well as delays, design changes and cost overruns at Station No. 11, which remains under construction.


The auditors step in

At first, Winnipeg chief administrative officer Phil Sheegl, Mayor Sam Katz and other senior officials declared there was no problem with the fire-paramedic station replacement program. But as issues emerged, the mayor called for an internal review.

City auditor Brian Whiteside, however, called for an external review that would be conducted by auditors from outside Winnipeg. City council then approved that review — as well as a broader audit of major city real-estate transactions over the past five years.


What’s in the review

What Ernst & Young was told to examine in its review of the fire-paramedic station replacement program:


The rationale

The auditors were asked to review the initial impetus for replacing four fire-paramedic stations, including the condition of the city’s existing fire-paramedic stations.


The procurement process

Ernst & Young was asked to look at every step of the way the project was tendered, from the original request for qualifications for a public-private partnership to a subsequent request for proposals, which was eventually won by Shindico Realty.

The auditors were also asked to review the awarding of all contracts and look at all of the costs relating to the construction of the stations;

Finally, Ernst & Young was asked to determine if all city officials followed all city controls, policies and procedures regarding the procurement process — and see whether existing controls, policies and procedures are adequate.


The land swap

The firm was asked to pay particular attention to the processes that resulted in the proposed three-for-one land swap, which council cancelled last year. Auditors were also asked to look at the value for money involved in the proposed transaction — as well as in the entire construction project.


Council oversight

Ernst & Young was asked to assess whether city council was kept up to date with any changes to the program — and whether the correct approvals from council were obtained.

Any city contract above $10 million is supposed to come before council. The fire-paramedic station replacement program started out with a $15.3-million budget. One of the key questions that should be answered by the review is whether the contracts were broken down into smaller components to avoid council oversight.


And going forward

Ernst & Young was asked to recommend any improvements the city could make with respect to procurement or oversight — and suggest disciplinary action against officials, if required.


Who stands to win or lose

Officials and entities who have the most at stake in the review


Phil Sheegl

Winnipeg’s former chief administrative officer, who resigned last Thursday, is already out of a job. In his resignation letter, he cited “a trying year” and “negativity” surrounding the fire-paramedic station replacement program.

Sheegl maintained last year he was only aware of the land-swap negotiations “at 50,000 feet,” but nonetheless was held responsible as the city’s top public servant.

The Ernst & Young review may reveal whether Sheegl was more intimately involved in the deal and whether he exercised any executive powers along the way. If he is found culpable in some manner, council may push to rescind any severance pay he may have negotiated prior to his resignation.


Reid Douglas

Winnipeg’s former fire-paramedic chief, who was fired in September, initially took responsibility for negotiating the three-for-one land swap with Shindico Realty, albeit with the help of real-estate officials in the city’s planning, property and development department.

Chief operating officer Deepak Joshi insisted Douglas was dismissed for reasons that had nothing to do with the fire-paramedic review. The Ernst & Young report is expected to clarify the role Douglas played in the fire-paramedic station construction and illustrate who provided him with direction along the way.

In a letter to his former staff, Douglas hinted he may speak after the review is released. It is not clear whether the former chief has signed a non-disclosure agreement with the city — or whether he has received a severance package.


Deepak Joshi

Winnipeg’s chief operating officer, who was named interim acting CAO on Thursday, may see his future with the city hinge upon what role he played in the fire-paramedic station affair. Joshi was the No. 2 member of the civic administration and effectively served as Sheegl’s right-hand man.

If Joshi is found responsible for any issues, even in an oversight capacity, he will be discouraged from applying to fill the CAO’s position on a permanent basis. He could also find himself out of a job, should council wind up in a mood to purge the administration of any officials close to Sheegl.


Barry Thorgrimson

The director of Winnipeg’s planning, property and development department, Thorgrimson initially claimed to know little about the proposed land swap when it emerged in August 2012. That in itself may have sealed his fate, although the longtime city employee is already close to retirement and has been expected to retire for months.

The review will clarify what role he played in the construction program.


Sam Katz

Winnipeg’s mayor says he was not interviewed by the Ernst & Young team and thus is unlikely to be named in their review. But as a close friend and confidante of former CAO Sheegl, Katz has little plausible deniability when it comes to being left in the dark about the fire-paramedic station replacement program.

What that means is Monday’s report will bear directly on the mayor’s future. If the report that comes out on Monday is scathing, Katz’s re-election chances will diminish.

But if the report offers little in the way of criticism of the city, the mayor may have a chance to survive.


Shindico Realty

The Winnipeg real-estate developer that built four new fire-paramedic stations for the city has little to lose on Monday. The operation of a private firm was not part of the review’s mandate. The Ernst & Young team was mainly interested in examining how the city procured the new facilities, and Shindico co-operated with the auditors.

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