Dead Men Don't Build 400 Buildings

If the fuel and WUC audits made you mad and the 400 Building audit is getting you angry, then just wait. Huron Lodge and the East End arena still have to be done.

There is nothing ever simple in the City of Windsor. There is always something going on in the background. It is always up to citizens to try and find out what it is. Let me deal with a number of issues about the 400 Building audit.

All I know is that this audit is being limited and the Dunbar Report is being buried. Citizens need to insist that we be provided with the documentation. As you shall see, there is no reason why we should not have it already.

Accordingly both Chris Schnurr and Daryl Newcomb of EH Channel News should be able to get the document forthwith. There is no excuse not to give it to them. And as for the litigation threat, well it is too late now since both the Mayor and a number of the Senior Administrators have already been given a copy of the report so it is no longer confidential and privileged. They are NOT Audit Committee members. Even so, I'm sure that Mr. Roman can draft some appropriate languageto protect the City as best as possible.

In passing, didn't anyone learn from the MFP document fiasco that the City lost in the Court of Appeal and which had to be produced to the other side in the litigation. Here we go again! A key document is not protected properly. It could cost taxpayers millions if a lawsuit is started since everyone is so worried about it.

And the longer it takes to release the initial audit or whatever anyone wants to call it, the more this whole project smells.

ARE THERE SKELETONS BURIED

In my BLOG last week, I talked about a litigation concern as an excuse for not releasing the 400 Building audit. I speculated on who the stakeholders were and especially which one of them would have enough money that they might want to start a lawsuit.

• “Perhaps an interested party might be one of the contractors that did not get the job if something strange went on. Who knows?”

It seems that I may be correct. I received a strange phone call from someone who claimed that his company was one of the 15 potential bidders who responded to a request for information on the Income Security building as it used to be called. He told me to check out the history of the building because some of the contractors involved were absolutely furious at what the City did and that there might be a potential for lawsuits depending on what came out of the Audit.

I did not find very much in my archives but I found some interesting things. Did you know that this was supposed to be a building to be built by private companies and not the City:

• Windsor Star 03-05-2002
  
  “The city has shortlisted six companies to build a new government building that would house federal, provincial and municipal departments on the site of the old police headquarters.
  
  Mayor Mike Hurst said Monday that of 15 proponents who responded to a request for interest, six have been placed on a short list to proceed to the second phase.
  
  "City council basically gave the green light to go to phase two of the request-for-proposal process," Hurst said…
  
  "We want the private sector to buy it," Hurst said. "So when they respond to us, we very much want to know how much are you prepared to give us for our property.
  
  "We want them to finance it. We want them to build it. We want them to own it. And we want them to deal with the issue of parking at their dollar."

The approach changed however and here is the strange language that Henderson used in describing it:

• Windsor Star 06-01-2002
  
  “Hush-hush negotiations for a $26-million to $30-million government social assistance office tower east of city hall are nearing completion and it appears Windsor taxpayers could end up financing the development.
  
  Sources have told The Star that city officials suffered sticker shock after privately examining proposals for the little-known project from four short-listed bidders, including at least one prominent local firm, that carried pricetags ranging from $26 million to $30 million and boasted Toronto-level leasing rates, ranging from $19 to $25 a square foot.
  
  However, serious consideration is being given to having the city underwrite the project, instead of leasing space and add the costs to a debt burden already slated to hit $225 million in 2006 if the $41-million plus Western Super Anchor arena development is given the green light.
  
  The plan originally involved demolition of the derelict former police headquarters at Park Street and Goyeau Avenue for a highrise office tower to be built by the private sector to house federal and provincial civil servants and the city's social services department.
  
  But in March, for reasons that haven't been made clear, the proposal was switched to the two municipal parking lots at the rear of city hall facing McDougall. The request for proposals called for a structure with at least 142,000 square feet of government office space, adequate underground parking and a ground floor available to Human Resources Development Canada by June 2003.”

Was there something in the Dunbar Report that we should know about that explains what happened and which could give rise to litigation?

There were four shortlisted contractors and then they were cut to two. Did something occur that could give rise to litigation by the two who were cut or perhaps by the contractor who lost out in the end? Is this what the Audit Committee is terrified to release?

Even more interesting is the war that went on between Chuck Mady and the City with respect to this entire transaction

• “Council, at a March 4 in-camera meeting, rejected a Mady Development Corporation offer to sell its 11-storey, 70,000-square-foot headquarters at 500 Ouellette Ave. for less than $8 million. Instead it voted 5-3 to proceed with a new $27-million social services office tower behind City Hall.
  
  Mady said he was floored to learn council wasn't interested in saving $20 million that could be used for roads and sewers and instead opted to get into the office development game in a city with a 21.5-per-cent office vacancy rate…
  
  "Why wouldn't you want to save $20 million? Boy. That does a lot of roads and sewers in this city," said Mady. "They should not be competing with the private sector. It just sends out a negative message and Windsor doesn't have a good reputation outside our community to begin with."

Did the Dunbar report explain why the decision was made to build rather than to buy? Could litigation take place over that decision?

Here is why I’m asking those questions.

First, here is a revelation made in the Minutes of the Audit Committee by the lawyer that they hired. He disagreed with the Dunbar report where it dealt with Councillors being involved in the procurement process.

How did they get involved? Was this proper or not? I would like to have the information from the Dunbar report in order to make my own conclusion.

Second, here is an item on the consent agenda of May 20, 2003. Unfortunately, I don’t know anything more about it than these two sentences:

• “Payment of Unsuccessful Proponents for Income Security Building…
  
  CR311/2003
  That Administration be DIRECTED to compensate Ellis Don, an unsuccessful proponent in the Stage 2 Request For Proposal for the Income Security Building, in the amount of $7,500.00.”

When have you ever heard of the City paying out money to unsuccessful proponents? I don’t understand this. Was this part of the RFP? If so, why was only one party paid? Was this perhaps an attempt perhaps to placate one of the parties involved who ran up costs? I just do not know but perhaps the Dunbar audit reported on that.

ARE WE GETTING ANOTHER WHITEWASH AUDIT

Take a look at what Andrew Roman, the lawyer hired by the City had to say about what he believes the scope of the audit is to be:

Those are very interesting questions but they are also extremely narrow. They do not cover at all any of the items that I talked about above.

If that only is what is being asked of this Audit Report, we’re not going to get very much are we? Sounds very reminiscent of the Whitewash WUC audit report. The questions determine the result.

To be direct about it, I would rather see the Report prepared by a professional auditor who is in the business of doing these kind of internal audit reports rather than hearing what Mr. Roman thinks should be in a report.

I took a look at his claim to fame on his law firm’s website and I did not see anything with respect to him being an expert in auditing and accounting. Perhaps he is along with his expertise in competition law and energy policy but his website did not mention it.

In passing, maybe he will assist the City when they will try to get rid of Enwin and the Windsor Utilities Commission to pay for Eddie’s extravaganzas

I find it very strange that KPMG was not asked to comment on the scope of the internal audit. After all, that is their business. But here’s something even stranger about KPMG. The Audit Committee Minutes provide the following with respect to KPMG’s reports:

Please explain to me why reports have to be done verbally and not put into writing? This is absolutely preposterous. I cannot believe that an Audit Committee would suggest something like this. Again, this leads to the conclusion that somebody has something to hide.

And here is a cutie too… solicitor client privilege rears its ugly head:


WHY ASK WHY


Honestly, don’t you find it strange that no one is asking why an experienced auditor like Mr. Dunbar wasn’t given the documents and didn’t undertake the interviews before he made his report? That does not make sense but then again didn’t we hear the same complaint from the Auditor in the dead men don’t pump gas audit when he could not get information from the Department.

Why is the Chair of the Audit Committee not putting the boots to Administration? The episode with 11 boxes of documents being produced even after Administration was supposedly given one last chance to respond is shameful.


DOES THE MAYOR HAVE A CONFLICT

Last but not least, and it should not come as a surprise to anyone, I need to talk about our Mayor. He may be in a pickle.

When the Mayor was a Councillor, he declared conflicts of interest with respect to the 400 building:
I appreciate that the retainer with respect to this matter is probably over. But does that relieve the Mayor of his possible conflict? After all, he has seen the Dunbar report hasn’t he. What if there is something in there that helped his old firm’s previous client? What if whatever it is could give rise to a lawsuit against the City of which he is Mayor? What are his legal obligations then?

I have no idea what the answer is but it is not an easy matter.

Perhaps the City should retain Scott Jolliffe of Gowlings, David Estrin’s partner, about this issue since he was the Chair of a Canadian Bar Association Report on lawyer conflicts.

Problems, problems, problems. Never a resolution in Windsor. Can this file get any stranger. Just you wait and see. It is a given!