Auditor-General report to offer a ‘teaching moment’ on city contracts

theglobeandmail.com
April 26, 2015
By Sahar Fatima

Though months-delayed and over-budget, a report into potential misconduct by Brampton city staff over a lucrative development deal could serve as a “teachable moment” for other municipalities when it’s finally released on Monday, a Brampton councillor says.

Elaine Moore said she hopes the report by interim Auditor-General George Rust-D’Eye into whether staff misled council in awarding the downtown redevelopment contract to Dominus Construction will provide some clarity on how effective the new “competitive dialogue” bidding process in Brampton really was.

“This is somewhat precedent-setting in terms of other municipalities that might be looking at a unique or different process to deliver some civic infrastructure,” Ms. Moore said.

The report stems from a $28.5-million lawsuit launched by developer John Cutruzzola of Inzola Group who alleges he was unfairly shut out of the bidding process to redevelop part of downtown Brampton. Mr. Rust-D’Eye was hired by the city in September to investigate whether staff breached policy in the procurement process. His report has now been delayed by four months and has so far cost $167,000 rather than the $50,000 to $60,000 estimate council initially received.

“This whole exercise has been a truth-digging exercise, and that’s what I’m expecting to see,” Ms. Moore said. “Some of it might be ugly.”

She added she personally felt important aspects of development proposals, such as costs to the city, were kept from council, rendering it unable to make an informed decision.

In an interim report in October, Mr. Rust-D’Eye raised similar concerns about an “atmosphere of secrecy and of the pressing need for confidentiality” during the bidding process. “Competitive dialogue” essentially calls on developers to submit clear, innovative proposals protected by greater confidentiality.

Because of the strict confidentiality rules, Brampton councillors were kept largely in the dark and Inzola, one of three firms that submitted a proposal, was barred from addressing council about the development project as staff said it would violate the confidentiality agreement. Inzola’s submission was later disqualified.

Another issue Mr. Rust-D’Eye promised in his interim report to address was city staff’s apparently unauthorized payment of $480,000 to Dominus to acquire a piece of land as an option for the redevelopment.

“I sincerely hope Mr. Rust-D’Eye has peeled back all the layers of the onion,” Ms. Moore said.

Brampton’s former chief administrative officer John Corbett, whose employment with the city ended last month, selected Mr. Rust-D’Eye to investigate the alleged staff misconduct and provided the original estimate before asking for more money.

The multiple delays and near-tripling of the estimated cost of the investigation have left Councillor John Sprovieri skeptical of how useful it may be. “I’m starting to feel like a fool. Somebody’s trying to play us for a fool here,” said Mr. Sprovieri.

Mr. Sprovieri circulated a motion at Wednesday’s council meeting to bring in yet another external investigator to probe Mr. Rust-D’Eye’s work after suggesting three weeks ago that the city stop paying him. City staff then told council they had been informed Mr. Rust-D’Eye will deliver his report on Monday.

In 2013, Mr. Rust-D’Eye investigated a city of Oshawa auditor’s report that alleged staff misled council on a real estate deal. The city’s auditor-general raised concerns at the time that the report had significant gaps and was based on inaccurate or misleading information, according to memos obtained by the Globe.

Mr. Sprovieri said he hopes Mr. Rust-D’Eye’s Brampton report is more comprehensive, based on how much time it took, and pinpoints where city staff allegedly breached policy.

“Somebody fell asleep on the wheel, whether intentionally or unintentionally,” he said. “He’s going to have to have a fairly substantial report, I mean very detailed and a lot of pages.”