Problems for Winnipeg mayor Sam Katz continue to mount as two city councillors, Harvey Smith and Ross Eadie, have called for Katz’s resignation.
The councillors cite cost overruns for a new police headquarters and an audit showing several improprieties in the awarding of contracts to build four new fire halls in the city.
The police headquarters project is now reportedly an additional $17.2 million over budget – on top of an initial $28 million in previously reported overruns. The city purchased the old Canada Post building on Graham Avenue and is renovating it to be the new Public Safety Building. Project manager Ossama AbouZeid has been at the receiving end of much of the blame for the cost overruns.
This comes on the heels of a scathing audit released on Oct. 21, which accused the city’s (now former) chief administrative officer, Phil Sheegl, of showing favouritism toward real estate developer Shindico in awarding contracts to have the new fire halls built.
The contract to build the new fire halls was broken up into four separate contracts, with each coming in under $10 million – that is, the threshold amount that requires city hall oversight for spending on capital projects. Consequently, Sheegl reportedly meted out the four separate contracts without city hall oversight or approval.
Shindico was awarded the contracts in a non-competitive process, the audit found. This debacle brought down the city’s fire chief, Reid Douglas, who was fired in late September, as well as Sheegl, who resigned only days before the audit was released.
Katz has had close business ties to Shindico Realty in the past. Katz and the two directors of the company, Robert and Sandy Shindleman, were prior business partners, co-owning the Winnipeg Goldeyes baseball team together. The Shindleman brothers also served as directors of Riverside Park Management, a non-profit organization that sublets city-owned land to their former baseball franchise. In 2012, Katz purchased a home in the Phoenix suburb of Scottsdale from Teri Nordstrom, the sister of Shindico CFO Diane Shindleman.
Katz severed his business ties with the Shindlemans in the lead up to the release of the fire hall audit, buying out their shares in the Goldeyes baseball club.
Katz and Sheegl were also close friends and had done business in the past, with Katz purchasing an Arizona-based company from Sheegl in 2012 for one dollar. Later that year, the mayor sold the company back to Sheegl.
The Canadian Centre for Policy Alternatives (CCPA) had voiced concern at Sheegl’s appointment in 2008, saying that Sheegl’s background in land development could raise conflicts of interest in his post as the city’s chief administrative officer.
“Sheegl’s background is not in city planning, but real estate sales and development [ . . . ] His background is particularly  problematic as the interests of developers and the public can often be at odds,” said the CCPA in a report.
Adding to the string of departures from city hall, two other city councillors, Dan Vandal of St. Boniface and Scott Fielding of St. James-Brooklands, recently left their positions on the Executive Policy Committee (EPC). The EPC is essentially the city council’s cabinet, with different councillors appointed to various portfolios by the mayor. Up until the resignations in late October, the EPC consisted of six councillors, plus Katz.
On Monday, Katz appointed councillors Grant Nordman and Justin Swandel to fill Vandal and Fielding’s spots on the EPC. The mayor also announced the creation of a new EPC position, secretary of economic development, which will be held by Russ Wyatt.