'That trust has been shattered'

Council calls for audit, reform following parkade fiasco

Coun. Brian Skakun is calling for a forensic audit to determine how the city's Sixth Avenue and George Street underground parkade project went millions of dollars over budget without city council being informed.

It may be time to get the Ministry of Municipal Affairs involved to review the city's handling of the project, he added.

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"I feel betrayed. Council is fractured, and our relationship with city administration is definitely fractured," Skakun said. "The community wants some answers, and we have to get them."

Emails released to The Citizen through a Freedom of Information (FOI) request showed that senior city staff received a detailed spreadsheet from developer A & T Project Development Inc. on July 4, 2018, showing the budget for the project had grown from an initial $12.6 million to $19.98 million (see story). An email from former city manager Kathleen Soltis to an address identified as "Mayor" on July 4, 2018 warned the mayor the project was facing significant cost overruns, and pledged to keep him informed.

Skakun said he requested two different reports from city staff about the cost overruns – one presented to council in December and one in January – and neither contained the information released to The Citizen through the FOI request.

If council had been informed back in 2018, they could have made a decision to cancel or change the project, he said. Instead they received the information too late to do anything about it.

"It's extremely concerning. I don't know who knew what when," Skakun said. "Regretfully, I really appreciate that (Citizen managing editor) Neil Godbout filed the FOI. It's really sad that as a city councillor, I still had to wait for The Citizen to file an FOI to get that information."

Mayor Lyn Hall had not responded to The Citizen's request for an interview on the topic as of press time.

Coun. Murry Krause said he is prepared to trust Hall's word that he didn't know about the cost overruns until that information came to city council in 2020.

"I certainly had a conversation with the mayor about it," Krause said. "That (the email on July 4, 2018) was the last he heard of it. I've known Lyn for a long time and will take him at his word."

At this point, all city council can do is move forward, he said. Council has already made changes to the city manager's delegated authority, which allowed Soltis to approve budget changes up to five per cent of the city's annual operating budget, and to require regular reports on the city's capital project.

"It's a work in progress," Krause said. "It really is about looking at the best practices elsewhere and applying them – looking at how large projects are managed, making sure that we have measures in place so that information gets brought back to council in a timely way."

Coun. Terri McConnachie said she was left "feeling like I was deliberately buffaloed."

While the city is already moving towards fixing its project management processes, she said, and looking at best practices in the private sector about effective project management, the bigger issue was that council wasn't informed about the problems from the start.

"This is clear evidence of deliberate deception of city council on the cost of this project," she said. "That's job one right now, accountability. Who knew when, where and how?"

The fact that in April, 2019, city staff proposed changes to the city manager's delegated authority to allow her to approve cumulative budget changes up to five per cent of the city's annual operating budget "looks really bad," McConnachie said. Prior to that change – made official by city council in May, 2019 – the city manager could approve cost overruns up to a million dollars on any given capital project.

On the surface, it appears the change was sought to allow Soltis to authorize the cost overruns on the parkade project without needing city council's approval, McConnachie said.

"It went from bad to worse. Instead of dealing with council... they sought to get around it," she said.

McConnachie said she is "on a fact-finding mission," to get the facts of what happened.

In addition, council is looking at measures including an internal audit and updates to the city's whistleblower policy, as well as potentially holding those responsible accountable.

"Cleary how it is working now is not working at all," she said.

Coun. Susan Scott said city council is taking steps to find out the full details of what happened with the project.

'I'm dead serious – there has to be accountability, there has be transparency," Scott said. "I do have a series of questions, and my questions haven't been answered. I'm not ready to say who knew what when. (But) whether it was written or verbal, line it up. What happened? How did it unfold?

Scott said when she gets the answers to her questions, she intends to share those details with the public – as much as legally can be. The city has an obligation to be open with the public, the groups it does business with, and with the city's employees and administration about how it conducts itself, she said.

"We're working together to get to the bottom of this, but also to ensure we have the  safeguards that this doesn't happen again with any project," Scott said.

Coun. Kyle Sampson said he has no intention of letting the issue fade away without council, and the public, getting answers about what happened.

"We're at the information-gathering stage. We're still going to be hearing from our legal counsel," Sampson said. "I am incredibly disappointed in this whole process."

While he's not going to speculate on what happened until he has the full information, "people did know, that's a fact," he said.

While some information may come to council in closed meetings, for legal reasons, Sampson said he wants to see the city to report out as much information at it can to the public.

"I want to put some reassurance out there that this won't be going away," he said.

Coun. Garth Frizzell, who chairs the city's finance and audit committee – the committee charged with overseeing the city's finances – said he stands by Mayor Hall on this.

"Nobody is happy with it," Frizzell said. "At least we're all united in wanting to establish exactly what happened, and make sure it never happens again."

Frizzell said that on Nov. 18, 2019, the finance and audit committee received a report showing the cost of the parkade project had grown to $16.37 million. Beyond that, he was never given any indication from city staff or the mayor that the developer had provided a detailed estimate putting the cost at $19.9 million in July, 2018, and then at $22.64 million in a September, 2019, update.

That information should have been brought to the committee, he said.

"It's a good cause to be upset. The transparency and accountability has to be paramount," Frizzell said. "That trust has been shattered."

Acting city manager Walter Babicz has already implemented changes to start restoring that trust, Frizzell said. City council and city administration are a team, working together, to move forward from here, he said.

"We are going to do better things," he said.

Coun. Frank Everitt, who sits on the finance and audit committee with Frizzell, Hall and Coun. Cori Ramsay, said he is confident the changes that are coming will make sure a situation like this can't happen again.

"Finance and audit was provided some information, but not to the detail that has come out now. In my view, it will be in the future," Everitt said. "Anybody who sits on council wants to know what is going on."

All of council, including the mayor, is committed to continuing to revise and adjust until they get things right so these types of situations can't happen again, he said.

Council has also sent a clear message to the city administration that they are focused on the issue, and "are more keen, and more demanding of information," he said.

"This is a tough lesson for our council. It doesn't get any easier," Everitt said. "Personally, could I have asked more questions? Based on the results, the answer has to be 'yes.'"

Ramsay declined to comment, while council was still investigating the issue.

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