I woke-up to the sound of sirens and I looked outside to see if our City Hall was on fire. I made the mistake of reading the Ernst & Young Real Estate Management Review: Finding and Recommendations prior to going to sleep. If there isn’t a fire at City Hall there certainly is a lot of smoke and as the old saying goes where there is smoke there is fire.
It really doesn’t matter if we call this an audit or a review as that is merely semantics as what does matter are the findings in the report. The report clearly indicates that many of the real estate purchases did not follow process or that there were no processes to follow. The City of Winnipeg despite having its own Real Estate Department decided on some major projects like Police Headquarters to hire an external advisor/broker. The report indicated that there was no explanation or rational as to why these particular transactions required an external broker.
In all cases where an external advisor was engaged, there was no file documentation explaining the rationale why an external advisor was required for the particular transaction.
To me one of the most disturbing parts of the ‘Review’; I will use the word review so our Mayor can’t argue the point and can concentrate merely on the facts as outlined in the review; is the lack of documentation, lack of involvement of Legal Counsel and the lack of timely and appropriate information to City Counsel about these real estate transactions. The Ernst & Young Real Estate Management Review is just another litany of evidence that our Mayor, City Council and the Public Service have mismanaged our city and are making decisions that at the very least have cost our taxpayers millions of dollars and raise the possibilities of issues relating to conflict of interest and one wonders if all aspects of these dealings meet the criteria to be legal.
It is why Colin Craig of the Canadian Taxpayers Federation was quoted as saying in the July 2nd edition of the Winnipeg Free Press as asking the ‘Selinger government to call an inquiry — or if it’s not willing to do that, call in the RCMP‘. There is no question this report requires further action. The report is shocking but indicates our City Hall on multi-million dollar projects didn’t hold itself to the same standards we are held to when we purchase a house. The hiring of an outside ‘Broker’ that represented the seller and the buyer was used in at least one instance. When you and I purchase a house we are certainly advised to have our own real estate advisor broker that represents our interests or represent ourselves with the help of a lawyer to protect our interests. We also know that when we hire a real estate agent there are terms and conditions for their service that are signed by both parties. With respect to payment the amount is stipulated in the agreement. The fee is often negotiable but is put right on the agreement. This was not done in all cases and with respect to Police Headquarters the review indicates the ‘Broker’ was paid over $800 000 to finalize the purchase of the property for 29 million dollars. It must be noted this is also the project that in the end was way over budget and numerous other issues related to the building of the Police Headquarters.
Colin Craig of the Canadian Taxpayers Federation and Dave Sauer of the Winnipeg Labour Council held a joint press conference across the street from the city’s new downtown police headquarters to encourage Winnipeggers to lobby council to reconsider a 2013 decision not to audit the construction project, whose budget has ballooned to $210 million from $135 million in four years.
A call for an audit on the building of police headquarters was defeated by a vote of 9 to 7 by City Council. One can only imagine how those individuals who are ultimately responsible for the issues related to Police Headquarters can be ‘trusted’ to look into the incident.
City Hall has and continues to be marred by incidents that clearly point to an inability to effectively manage the day to day operations of the City of Winnipeg. Here are just a few examples.
- The Fire Hall Audit – The Ernst & Young Audit report concluded the program was over-budget and one of the fire halls was built on land the city still does not own. Ernst & Young said the whole program was badly managed and preferential treatment and information were provided to local developer Shindico, which ended up building all four stations.
- Investor’s Field – Sam Katz in an article by Bartley Knives on April 11th stated: “In my opinion, there should have been much more time devoted to details which for some reason were overlooked. I have no explanation for it; we weren’t involved with it but there’s no doubt in my mind that is the case.” In this case there certainly can be responsibility placed everywhere but it looks and sounds the same as the issues plaguing City Hall and Council.
- Urban Sprawl – Despite evidence stating the cost and negative impact on the development of Winnipeg both economically and environmentally City Hall this year has approved two more ‘Urban Sprawl’ Developments. I have outlined like others alternatives and issues related to ‘Urban Sprawl’. (Winnipeg: We’ve Got a Problem)
- Lack of Planning, Transparency and Vision for the City – It is difficult to understand how City Hall celebrated the removal of the Red Tape that our Mayor stated slowed development. Since that time our City projects have been marred by mismanagement, cost-over-runs and acquisitions and in the case of the Fire Halls favoritism to certain individuals and companies. I have previously written many articles as have others related to the mismanagement of our City (Mayor and Council Get Failing Grade).
Where do we go from here? I don’t think we can wait for the next election to take action. Our current council is continuing to make decisions that could negatively impact the City of Winnipeg moving forward. At the very least we need to have an audit and police investigation into the business dealing of the City of Winnipeg. Those that are responsible for these dealings must take responsibility and as taxpayers we need to be assured these dealing were the result of mistakes rather than criminal activity. When some school divisions were questioned about how they were doing business the Province stepped in and provisionally took over the day to day operations of school division. In the interests of the people of Winnipeg it seems we need a provisional leadership to run our City until a newly elected Mayor and Council can be put in place. Failing that we need a moratorium on major decisions by our council.
We need a review of the role of Civil Servants in the transactions identified. Civil Servants are to serve as the safeguards of process and protect the taxpayers and people of Winnipeg from political interference.
We need to redefine City Hall, our Municipal Government and Mayor. This will not be an easy fix. The way City Hall does business has changed under the tenure of our current Mayor. Tinkering will not do. We need to rebuild not only the vision for the City of Winnipeg but create a municipal government and civil service that understands process, supports ‘Smart Growth’, is transparent and engages the people in the process. A new Mayor cannot fix what is currently broken. What is broken cannot be fixed. We must start over and that will not be easy.