Auditor-General absolves Brampton city staff of misconduct in development deal

theglobeandmail.com
April 27, 2015
By Sahar Fatima

Brampton city staffers were absolved of any wrongdoing Monday after an investigation looked into potential misconduct during the selection process for a major downtown development contract.

In a long-awaited report, interim Auditor-General George Rust-D’Eye found the Southwest Quadrant Renewal Plan was handled properly by senior and experienced city staff who provided sufficient information to council while protecting confidentiality within the bidding process.

“The city was well-served by its staff,” Mr. Rust-D’Eye wrote in the134-page report, initially expected to be released at the end of 2014.

He added staff’s actions throughout the bidding process “contributed substantially to the success of the project, and achieving, in an impressive building designed by a distinguished architectural firm, the city’s needed administrative space at a price reached through an appropriate competitive procurement process.”

Mr. Rust-D’Eye was appointed in September to look into the matter after developer John Cutruzzola of Inzola Group sued the city, alleging he was unfairly shut out of the bidding process for a lucrative development deal to meet the growing city’s need for more office space. Dominus Construction was ultimately awarded the contract for Phase 1 of the project in 2011, which will cost the city $205-million over 25 years.

The report is based mainly on interviews and information provided by city staffers who were involved in the procurement process.

Staff were within their bounds, Mr. Rust-D’Eye found, to pay Dominus $480,000 to acquire a land option, without explicit council approval. Council had given staff the authority to engage in those sorts of transactions, the report said. Mr. Rust-D’Eye wrote that staff were further vindicated because council ultimately voted to purchase the property at 20 George St. for $2.48-million.

Councillors who felt they were kept in the dark about important aspects of the development proposals and the bidding process said last week they expected the report might find some evidence of malfeasance.

But Mr. Rust-D’Eye found the opaque “competitive dialogue” bidding process, used for the first time by the public sector in Canada, was “appropriate and implemented well on behalf of the city.”

The new bidding approach was used to encourage developers to present innovative proposals with realistic cost estimates under the protection of greater confidentiality. Inzola, Dominus and one other company made submissions but Inzola was disqualified after failing to sign a confidentiality agreement as well as attempting to make a presentation to council, Mr. Rust-D’Eye wrote.

“City Council and staff utilized a novel approach properly suited to the situation, and retained specialized consultants to assist in its administration, resulting in a fair and effective competition and evaluation process,” Mr. Rust-D’Eye wrote. “Both the council and the public were provided with full and appropriate notice and information relating to the [development] project.”

Councillors were given the option to accept or reject staff’s final recommendation but were not allowed to review all the final submissions themselves.

The report did not surprise Councillor John Sprovieri, who did not support Mr. Rust-D’Eye’s appointment for this investigation, as recommended by former chief administrative officer John Corbett.

“I didn’t expect him to really criticize the work,” said Mr. Sprovieri, who had raised concerns about a potential conflict of interest, as lawyers from Mr. Rust-D’Eye’s previous law firm were involved in the procurement process. In his report, Mr. Rust-D’Eye rejected the allegation and wrote WeirFoulds LLP has since categorically confirmed he was not in any way involved in the firm’s work on the development project.

Mr. Sprovieri said Mr. Rust-D’Eye can expect a tough grilling when he presents his report at a special public council meeting next Monday.

“Anyone can write a rosy story on a piece of paper. It’s backing it up after that’s going to be the challenge,” he said. “He’s going to have to defend what he’s provided us for a huge cost.”

Mr. Rust-D’Eye’s services cost the city at least $160,000.

Mr. Sprovieri said he will introduce a motion at next week’s council meeting to have a procurement expert conduct a new investigation. “We need to get to the bottom of this matter.”