Thoughts and Opinions On Today's Important Issues

Monday, December 28, 2009

Will There Be A "Draft" Dunbar-type Arena Audit (Part 1)

You know exactly what I mean. An audit on "sole sourcing" the arena which will be prepared but never released forever, or at least not until after the municipal election, overseen by outside lawyers and accountants and costing hundreds of thousands of dollars.

And mini-Gord will write again "So what's the big deal?" since the Mayor and Council should be congratulated and even forgiven if mistakes were made for building such a nice palace here rather than allowing an arena to be built in shudder Tecumseh.

Who needs a full-fledged report on the arena when a limited one works perfectly as a white-wash!

If Edgar (aka Eddie) is successful in killing, errrrrr restructuring, the "flawed" Audit Committee and there is no Auditor General in place, who can authorize one anyway.

Ignored words of wisdom from Edgar (aka Eddie) has and may cost us dearly in the future:
  • "We need to revive the idea of public/private partnership for a new arena. It is the only realistic strategy available that will ensure that this project will become a reality.

    A multipurpose facility cannot be built by public nor the private sector interests acting alone. The synergy created by the private/public partnerships gives better service to the taxpayer, and allows a much needed multipurpose facility to be built in our city.

    A public/private partnership is the key to our arena’s ongoing success and viability. Council has already allocated the required money and land for this project – we need to aggressively seek a partner."

I have always been critical about the arena deal since it never made sense to me:

  • Edgar broke his campaign promise
  • It changed from a P3 downtown with the City at risk for no more than $15M to an arena where the City is at risk for who knows how much in spite of the "on time and under budget" mantra that Gord still spews
  • How the Collavinos just appeared with their offer when almost invisible in other arena debates in the past and all of a sudden became the prime contractor
  • How could an arena that was to cost $60M in 1999-2000 in Port Huron cost us only $48M in 2006
  • How Project Ice Track was played and screwed
  • How the Farhi site became the choice
  • How environmental issues were never a major concern yet now we learn about the Wickes site
  • The poor terms of the naming rights agreement and the arena agreement with the Spitfires.

The Collavinos are smart people. Why did they wait until September, 2006 to dust off their plans.

  • "It's no secret Windsor has been looking for an arena for a long time," Renzo said Thursday.

    "I've had this idea for a while -- I never had a reason to bring it out until the council resolution...

    "They are confident such a project could not be done for less money because much of the pre-construction work has been taken from an arena project in Port Huron that was never finished. That development stopped midway through construction when the bank pulled the plug on the private developer who had hired the Collavino firm Renaissance Precast Industries to provide precast concrete forms."

Why didn't they act in 2002, when they knew Mostafa Afr's Port Huron arena project was dead:

  • "2002 -- After tender comes in $10 million higher than expected, council shelves the $48.9-million development. Spitfires owner Steve Riolo agrees not to move team out of Windsor. The University of Windsor floats the idea of a 5,000-seat arena, 6,500-seat stadium as a joint city-school project."

Do you remember why we entered into the deal in the first place?

  • "City council had the authority to waive the city's tendering bylaw because they were certain the deal with the Collavinos wouldn't have been found anywhere else, Francis said. The PCR proposal was based on work that had been completed for a Port Huron, Mich., arena project, stopped just after construction began because the private developer ran short of money.

    The architectural drawings are done and some of the mechanical and concrete precast work has been started, saving the city millions of dollars in startup costs.

    Francis defended the non-tendering process because the Collavinos themselves tendered it and came up with the price of $48 million. (The city report outlines a bottom line price of about $55 million once servicing and fit-up costs such as seats are included).

    He said those privately tendered prices won't be around forever and if council delayed the issue with unnecessary tenders, the costs could increase.

    "We would have had to start the process all over again," Francis said. "Who's going to come up with the drawings? That would take another year and council didn't want to go back to Square 1 and they didn't want to kill another year."

Of course, what due diligence was done to ensure this was true? Did the City ever look anywhere else? Edgar did not have to look far. He received a letter! Yet Council noted and filed two other competing offers, one of which offered the following:

  • "The city also received a letter last week from the Toronto architectural group NORR, the company that designed and developed plans for the Western Super Anchor site downtown when city council decided it would proceed with an arena on its own.

    The city spent about $3 million for those drawings, which were subsequently shelved after council voted against a go-it-alone project because the price tag came in at $48 million.

    "They're just saying we're still here if you're interested," Francis said Tuesday of NORR's letter.

    The NORR group has partnered with Giffels, the company that is building the arena complex in LaSalle. The NORR/Giffels group is not suggesting a downtown site nor an east-end site, Francis said. "They're sending a letter saying, 'we'd like to be part of the proposal.' "

So the City had plans as an alternative to the PCR plans, plans which the City had already paid for.

Consider in addition this remarkable comment made in a non-Windsor Star publication by Collavino that blows Edgar's justification out of the water:

  • "PCR dusts off cancelled plans and materials to build Windsor Family Credit Union Centre
    Collavino family turns Michigan’s loss into gain for new Windsor arena

    The $63 million project was dogged with some controversy when it was first awarded without tender...

    “We’d originally been working on a private arena in Port Huron (Michigan) and we’d gone back to the owner and suggested a change to precast from cast-in-place, saving him a whole bundle of money. We had probably 60 per cent of the pre-cast in the Detroit yard when his financing fell through,” says Paolo Collavino.

    In 2006, with the city looking for an arena, the company stepped forward with its already finished plans, hoping to salvage the pre-cast. They promised to deliver a four-pad centre with a 6,500-seat capacity main rink for about $55 million — a substantial discount...

    “I think we met the expectation of the city and met our own expectations,” says Collavino. “We really value-engineered it. Though I know some people got their underwear in a twist over it.”

    Though they couldn’t salvage the existing pre-cast which had become too weathered, they did grind it down and reused the materials."

It is remarkable because of the following statement made in October 4, 2006 as justification:

  • "The Collavinos were hired to complete the precast concrete work in the project and say it could not possibly be done for less money since much of the preliminary work has already been done at the expense of the Port Huron developer. "

    Some of the components of the project are already available
    ," Duben said. "This is a case where you can single source."

$55M? The Star's headline screamed "Council approves $48M arena plan." $63M cost over $70M. I just don't get the numbers.

Arena plans were already around for which the City paid and the concrete materials could not be used as built. So much for the single source rationale.

Wow, am I ever re-assured by Councillor Valentinis who was the only Councillor involved from start to finish on the 400 Building construction project and who must take the hit for the fiasco it became, especially given his legal background:

  • "Coun. Fulvio Valentinis, who was a member of the steering committee for both the 400 building and arena projects, described the difference between the two as “night and day.” Meetings, reports and plans were developed with much greater resources and personnel support on the WFCU project, he said.

    “It was much more structured, there was a chain of command, everyone knew exactly who had authority and who did what,” Valentinis said.

    “On the 400 project from word go it wasn’t 100 per cent clear on the roles of administration and councillors on the committee, so you ended up with a clash.”

Nothing like admitting that the 400 Building was a disaster of a project for which he must take ultimate responsibility as the only Councillor on the Committee throughout the whole project. Moreover, we learned little about why the 400 Building project was a disgrace until AFTER the arena was built so lessons were lost.

Here though is the shocker from Councillor Halberstadt's BLOG:

  • "Only in Windsor can politicians who engage in activity that blatantly violate Common Law and the bylaws that govern the City of Windsor be hailed as heroes...

  • Rather than defending his conduct, ex Councillor Carlesimo should be thankful that the audit committee did not recommend to Council a full-blown Public Inquiry. Then he and the other members of the selection committee would have been put under oath and asked what conversations and associations they might have had with local contractor Oscar during the time this sordid mess was unraveling."

And why didn't they do so one might ask? Where was Councillor Halberstadt demanding one or does he only do so when it does not count---in his BLOGs?

Anyway, it looks like the Arena might be looked at next. BUT is it going to be a narrow audit that does not look into some of the matters and more that I raised back in 2006 when I asked for a public inquiry on the arena:

  • "The city’s audit committee will examine a pattern of sole-sourcing major projects when it looks at the construction of the $71-million WFCU Centre.

    Angela Berry, the city’s lead internal auditor, said there is concern over that the city is too often streering around its purchasing bylaw by failing to put projects out to competitive bids.

    “There is merit to sole-sourcing when it needs to be done, but the purchasing bylaw is the best method to achieve value for money for the city,” she said. “It will not fit every scenario, but (waiving it) should be the exception, not the rule.”

If so, this is nothing but a whitewash before the next election!

I was amused by the Edgar's (aka Eddie) comments because I do not accept what he said.

  • "Even though the city sole-sourced the arena project, it was approved through a bylaw and resolution of council, said Mayor Eddie Francis.

    “The community was aware it was sole sourced and the proper steps were taken,” he said."

In fact, if there is a sole-source problem in Windsor, then he is directly responsible for it!

BY-LAW NUMBER 9-2000 passed in January, 2000 had no provision in it dealing with sole sourcing. When Edgar became Mayor, PURCHASING BY-LAW NUMBER 400-2004 was passed on December 13, 2004. It added a new section that is relevant for our purposes:


    32. (1) A Sole Source purchase may be used for the purchasing of goods and/or services for Contracts of any Contract value, in the following circumstances:

    (i) Where a public/private partnership exists.

In passing, remember MFP. It was a P3 that the City entered into and we hired Price Waterhouse Ccoopers to design protections to ensure that an event such as that could never happen again. Section 32 (i) was the perfect end-run around the work done by PWC!

Let me save Ms. Berry some time and effort and help her when looking at the arena as a sole source project. But that comes in Part 2!