talkof thetownGerry Bliss & Brad Densmore 14 Rob Wipond16 Simon Nattrass20 Briony Penn22The smoking gun & accountabilityDAVID BROADLANDDid Victoria’s City Manager misrepresent the financial state of the Johnson Street Bridge project before the 2011 civic election?Last month I wrote here about the circumstancessurrounding the City of Victoria’sefforts last year to bar three people (freelancejournalist Ross Crockford, <strong>Focus</strong> editorLeslie Campbell, and myself) from obtainingcertain records the City apparently wishedto keep secret. The City had applied under ararely-used provision of the Freedom ofInformation and Protection of Privacy Act toeffectively block access to those records. TheCity abandoned that process once the Officeof the Information and Privacy Commissionerunexpectedly called an expedited hearing ofthe City’s Section 43 application. I ended lastmonth’s story by telling you that a portionof the records being sought had finally beenreleased to Ross Crockford—10 months afterhe first requested them—through provisionsof FIPPA. The information contained in thatrelease—which has been dubbed “the smokinggun”—raises serious questions about theveracity of a public statement made by theCity’s top executive just before the 2011 civicelection. The following series of events havebeen reconstructed from that release, otherFOI releases, and public records.AT A MEETING OF VICTORIA CITYCouncil on October 6, 2011, City ManagerGail Stephens introduced an update on thethen two-year-old Johnson Street BridgeReplacement Project by noting, “interest inthe bridge remains very high.” She went onto tell councillors, media and members of thepublic, “A lot of work is being done to preparefor the construction, but it’s all behind-thesceneskinds of work, and not clearly visibleto the public. However this preparatory workis critical to the successful delivering of theproject, that I’m pleased to note continues tobe within the budget of $77 million and theMarch 2016 timeline.”Near the end of her short address, Stephensannounced the project had received confirmationof an $8 million grant from the CRDwhich, she said, “can be applied to reduce theamount of money we have to borrow” tocomplete the project.That the project was on budget and onschedule and was so well-managed that theSmoking gun: City of Victoria Director of FinanceBrenda Warner informed Stephens of millions ofdollars of unbudgeted costs in June 2011.City wouldn’t need to borrow as deeply aspreviously thought must have sounded likebeautiful music to the ears of Victoria MayorDean Fortin. After all, he would soon bepounding the pavement and knocking on doorsin search of votes so he could retain his $100,000-a-year job in the upcoming civic election, just45 days away. Stephens’ public reassuranceswould surely help him in that effort. Indeed,two days after the meeting, Fortin wrote onhis Facebook page: “The good news VictoriaCity Council received this Thursday is thatthe amount we need to borrow for bridgeconstruction has dropped 8 million due to afederal gas tax grant administered by the CRD.”But as buoying as this news was for Fortinand his pro-replacement councillors, it camewith a potentially serious problem attachedfor Stephens, who is a certified general accountant.As such she was required, as stated inher professional association’s Code of EthicalPrinciples, to “not be associated with informationwhich the Member knows, or shouldknow, to be false or misleading, whether bystatement or omission.” And her “within thebudget of $77 million” statement, along withPHOTO: CITY OF VICTORIA ANNUAL REPORTher inference that the City would be able “toreduce the amount of money we have toborrow” was directly at odds with informationand recommendations given to Stephensby the City’s finance department monthsbefore.THE JOHNSON STREET BRIDGEReplacement Project Steering Committee,hereafter referred to as the Steering Committee,was established by the project’s Charter inJanuary 2011. To borrow from the Charter’sbureaucratese, the Steering Committee occupiesthe position in the accountability structurebetween City council and the City engineerrunning the project. That is to say, the SteeringCommittee controls what information is passedon to councillors. And as Stephens had beenat the helm of that committee since its inception,she was the gatekeeper that separatedcouncillors from the rest of City staff workingon the project back in 2011. So when the City’sDirector of Finance Brenda Warner firstapproached the Steering Committee in thespring of 2011 with concerns about the project’sbudget, Stephens was guarding the pass.Warner had identified millions of dollars inproject-related costs that were not included inthe $77-million project budget approved byCity councillors before the referendum in 2010.But that was the only approved budget that shecould assign those costs to, and they were steadilyeating up the project’s contingency fund.Warner had initially been assured councillorswould be informed of these costs at a councilmeeting scheduled for July 2011. But afterattending a Steering Committee meeting onJune 24, 2011, where she provided an accountof these costs, she was told by Stephens thatcouncillors would not, in fact, be informeduntil October, when new drawings and a projectcost update were to be completed by the City’sconsultant, MMM Group, a private engineeringand project management company. An hourafter that June 24 meeting, Warner was toldby the City’s JSB Project Director Mike Laithat “we will need to strategize with the SteeringCommittee on the timing of that update.”Why the secrecy and strategizing? Why notjust tell councillors the truth about the project10 April 2013 • FOCUS
Victoria’s Asian Decor CentrePut something AMAZING in your homeSmoking gun: In August 2011, Acting Assistant Director of Finance TroyRestell calculated the project had not included $5.2 million in known costs.and get their input and direction? Well, that would have dumped themillions in unaccounted costs into public view just before an election,and the Steering Committee had previously identified a “changeof council” in an election as a definite risk facing the project. Moreover,both Lai and Stephens were aware of other serious problems: the overallcost had been badly underestimated in 2010 and now the project teamwas furiously reworking the design to contain costs. But keeping a lidon costs also meant reductions in the functionality, expected life, amenitiesand architectural qualities of the bridge, and that could result in alegal challenge to the referendum that approved borrowing for theproject. As well, the lifting mechanism had undergone a radical designchange, necessitating additional construction cost increases. Revealingall this at the wrong time—especially before an election—mightforce a public reconsideration of the entire project.A few days after that June 24 meeting, Warner, perhaps sensing theproject had gone beyond the point where council approval ought to besought, asked Acting Assistant Director of Finance Troy Restell to puttogether a detailed account of the unbudgeted costs. On August 12,2011, Restell, a certified management accountant who had been withthe City since <strong>2006</strong>, sent a memo to Lai that was circulated to Stephens.Restell’s memo stated, in part, “$5.2 million of construction/ design andBEST OF BOTHWORLDSIMPORTS AND DESIGN2713 QUADRA (AT HILLSIDE)250.386.8<strong>32</strong>5WWW.BESTOFBOTHWORLDSIMPORTS.COMwww.focusonline.ca • April 201311
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