City weighs giving senior staff power to approve pricier contracts

Senior city staff would be allowed to approve larger multimillion-dollar contracts and change how updates are shared with the public, under a proposal to change how the city oversees its most expensive infrastructure project.

“We need to make sure that we have the right governance model for a megaproject or megaprojects, so that they… have a better chance to get delivered on time and on budget. So, we need the right oversight,” said Mayor Scott Gillingham.

The proposal aims to ensure efficient progress on the city’s largest endeavours, starting with the $3.092-billion North End sewage treatment plant upgrade. A KPMG audit of the upgrade found city processes require changes to address such a complicated and expensive project.

“The benefits of the new structure include an elevated level and frequency of reporting allowing for more effective oversight and more timely decision making,” writes Danny Tooth, the city’s acting manager of major capital projects oversight, in a report on the proposal.

If approved by city council, the changes would give the chief administrative officer the power to award contracts worth up to $50 million for the treatment plant upgrade and permit its chief financial officer to award those up to $35 million.

The CAO would also be given authority to approve contract overruns for the treatment plant upgrade, in cases where these don’t exceed the project’s overall council-approved budget. That power could also be delegated to the chief financial officer.

The CAO and CFO (if delegated to) currently have authority to award contracts worth up to $10 million and over-expenditures up to $10 million on general projects.

In 2010, city council also gave the CAO the power to approve contracts worth up to $30 million for the South End and North End sewage treatment plant capital projects, as long as council-approved funds can cover the expense.

The proposal also contains broader changes that will affect all future projects worth $500 million or more, including the North End sewage treatment plant upgrade.

Council’s executive policy committee, whose members are appointed by the mayor, would be given jurisdiction over all megaprojects, making recommendations for final city council votes.

Quarterly reports on such projects, which are now made to the finance committee, would be replaced with monthly reports to EPC.

“We have to be learning from past issues, past projects that went over budget, past projects that perhaps didn’t have the oversight that was required. This is critical that we get this right,” said Gillingham.

While the mayor spoke in favour of the plan, a city councillor hopes to make a key change to it, over fears it could otherwise reduce oversight and scrutiny.

Coun. Brian Mayes (St. Vital) is calling to amend the plan to ensure all city council members can publicly ask questions of the city’s chief construction officer about the sewage plant and other megaprojects at council meetings.

“The majority of councillors are not on EPC… (and) there are criticisms of council for not asking enough questions about the police headquarters (in the past). This thing is probably costing maybe 15 times more than the headquarters, so I’m going to be asking some questions,” said Mayes.

The WPS headquarters opened at 245 Smith St. in June 2016, at a cost of about $214 million — well above its original $135-million price tag. The RCMP conducted a lengthy investigation into fraud and forgery allegations, but no criminal charges were laid.

Mayes stressed the circumstances are quite different for the North End sewage treatment plant upgrade but said he believes its hugecost alone warrants extra attention.

“More oversight is needed and costs have escalated year after year. I’m not alleging any kind of corruption. I’m just concerned about the sheer cost of the project,” he said.

The entire upgrade was once expected to cost $795 million.

Mayes said the need for scrutiny from all city councillors will increase, once updates on the treatment plant upgrade are redirected to EPC and then head straight to council, instead of an initial round of debate by another committee.

“The way it’s written right now would really restrict the ability of anyone who isn’t on EPC to ask questions,” he said.

The councillor said it’s not yet clear if less information will be included in public reports on megaprojects, if the changes are approved as is.

Mayes plans to raise his motion to amend the megaprojects plan at the Dec. 18 council meeting.

Gillingham said he’s open to considering the change.

“The chief construction officer was a campaign commitment of mine, and the goal, the intention, has always been that that individual could give a measure of independent advice to all of council,” he said.

In addition to the North End plant upgrade, the city has a few other upcoming projects expected to cost more than $500 million, such as the overhaul of Kenaston Boulevard and extension of the Chief Peguis Trail.

joyanne.pursaga@freepress.mb.ca

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