The mayor's dilemma

By David Broadland, May 2013

Was Victoria Mayor Dean Fortin accurately briefed on the financial state of the City’s largest-ever infrastructure project before the last election? If he wasn't, as he claims, why isn't he concerned?

Shortly after Focus went to press last month with my “The smoking gun & accountability” story, a group of 12 Victoria citizens sent letters to Victoria City councillors and City Manager Gail Stephens.

The letter to Stephens included a copy of an August 12, 2011 memo produced by the City’s Assistant Acting Director of Finance Troy Restell in which he reported that the Johnson Street Bridge project had accumulated $5.2 million in unbudgeted costs.

The citizens group asked Stephens for a “legitimate explanation” of why she had given a report on October 6, 2011 that the bridge project was “within the budget of $77 million.” In their letter to councillors, they stated, “If [Stephens] cannot provide a legitimate explanation, we believe you must appoint an independent inquiry into her conduct.” The group of citizens also sent letters to media apprising them of the issue. Over the next week, on local radio programs, the fur flew.

In interviews with Gregor Craigie on CBC and Stephen Andrew on CFAX, Mayor Dean Fortin echoed the position that Stephens had expressed in Focus: the City Manager could not declare the project over budget until she had all the information; all the information was provided in a March 15, 2012 report, by which time the project was $16 million over budget. The Mayor implied that the report Stephens made to councillors, media and the public on October 6, 2011, just before a civic election, didn’t require the same process of due diligence.

At one point in the CBC interview, Craigie asked Fortin, “Do you have any concerns that, although it came out in the fullness of time, that concern that the budget was already over budget should have come out just before the last civic election?” Fortin responded, “Yeah. I mean…I think…Our staff are apolitical; I mean elections don’t factor into any information of when they bring stuff forward…”

Craigie persisted: “Would it have been a factor for voters to know in the last election that the bridge project was already over budget?” Fortin replied, “Well I don’t think that...I mean that was [sigh, pause]. There’s an implication in there, an assumption you’re making, when that came forward, whether it was or not…” Craigie, interrupting, said, “But it’s not my assumption, Mayor; it’s a memo from the Acting Assistant Director of Finance. I have no numbers to go on; I’m just going by a City of Victoria document…which categorically stated three months before the last election it was over budget by more than $5 million. Shouldn’t voters have been aware of that?”

Fortin replied, “Um, so, what I’m saying is there is a complete process of gathering information, not only from finance but from what’s going on elsewhere with the rest of the bridge process. There may have been cost increases suggested in one area and cost savings coming in another.”

But the Mayor offered Craigie and his audience no examples of any “cost savings” that were on the table at the time. Indeed, at the very same October 6, 2011 Council meeting at which Stephens said the project was on budget, Fortin had asked both Project Director Mike Lai and the City’s engineering consultant Joost Meyboom if their plan to shorten the bascule span—the most expensive component of the project—by over 10 percent would produce “cost savings.” Meyboom had answered, “I think it’s…ah…I don’t wanna... I don’t know. In all these cost estimates, when you do them, you’re high in places, you’re low in places.” Lai had offered, “There would be, theoretically, some cost savings…I don’t think there’s a specific number that has been divined.”

Meyboom’s and Lai’s hedging was followed by a request from the Mayor for a written report on whether there would be “cost savings.” If such a report was ever provided—it would have come from Meyboom—it has never surfaced in FOIs of Meyboom’s communications to the City.

Up to that point in the process Lai and Meyboom had been the only credible sources of information about the direction costs were headed, and it’s clear they were reluctant, on October 6, 2011 to attribute much, if any, “cost savings” to even this major reduction in the scope of the project.

No wonder. Forty-six days later, just two days after the civic election, Meyboom officially sent Lai the news that the estimate for project management and construction-related costs had risen an additional $5.85 million.

In a follow-up interview, Craigie posed Fortin’s argument to Councillor Geoff Young: “The Mayor’s point was—I think this is a fair summary of it—you wait for your staff, who you trust, to tell you the information once they’ve assembled it all and you don’t need for them to labour you with every little detail along the way.” Young responded, “There’s the question of what is a ‘detail’ and what is ‘substantial.’ I think the [$5.2 million unbudgeted costs] report from the finance department was substantial; it wasn’t a detail. There’s also the question of, it’s one thing to say ‘we don’t have information, we’re assembling information and will report to Council.’ But that’s not what happened. Council did get a report. The public got the report. The report said ‘we’re on budget.’ So that’s quite a different issue from the question of the timing of the information.”

Craigie asked Young, “Is this the kind of thing that there should be repercussions for senior members of staff?” Young responded, “I think it’s a very serious question that Council has to be talking about.”

Fortin repeated the same arguments when he appeared on Stephen Andrew’s CFAX radio program, during which Andrew gave an unusual  blow-by-blow account of Fortin’s use of scripted talking points, which were, according to Andrew, “prepared by [the City’s Director of Corporate Communications] Katie Josephson.” Following that lively show, Andrew interviewed Young and Councillor Lisa Helps on the issue. Andrew told the two, “The Mayor, again from notes prepared by the director of communications, said to me on the air: ‘I am not interested in entertaining these claims; I am comfortable with the information presented and steps taken with the process to get here.’” Helps responded, “Well the Mayor is one of nine and we speak as a Council. So that was the Mayor speaking on behalf of himself, perhaps with some assistance. That’s fine. The letter that came to us was to Mayor and Council, and Mayor and Council will have a discussion.”

Andrew asked, “Are you comfortable with the information and the steps taken in the process to get there?” Young responded, “Well, no. I personally will want to have a very detailed explanation first, from the City Manager. I would want to give her an opportunity to explain this apparent discrepancy, and that explanation, for me, would have to be in writing and preferably public so that other people who have a lot more knowledge of accounting principles than I do…can examine it. That’s the kind of information I would want to have to put my mind at rest.”

Following the public airing of the issues, Focus received a threatening letter from Stephens’ lawyer Joe Arvay. Arvay copied his letter to councillors, thereby making it a public document. Amongst other things, Arvay wrote: “We can also advise you that in the fall of 2011, Ms Stephens was advised that some of the estimated costs had actually been reduced, based on changes to the cost of materials and that such cost-savings would offset any of the added costs set out in the memo. There was no reason for Ms Stephens to doubt the accuracy of the advice that she had received in September that the project was on budget.”

I wrote to Mr Arvay with an offer of a full retraction and an apology to Stephens if she would provide us with documentary evidence of that advice. I noted that Focus had done its due diligence in the filing and processing of nine FOIs related to the issue, including one that should definitely have captured the advice to Stephens that Arvay had referenced. Arvay did not reply.

So why wouldn’t Mayor Fortin want to clear the air on this issue? An inquiry would allow Ms Stephens to set the record straight, which is what the group of citizens who petitioned Council for an inquiry were requesting: a legitimate explanation.

Could it have been the Mayor’s instinct for political self-preservation?

Ten days before the City Manager made her “on budget” report, the project’s Steering Committee met in the City Manager’s office. The records of that meeting, obtained through FOI, show that a decision was made to brief the Mayor about what would be said in the October 6, 2011 report. That pre-report briefing was going to be done by Stephens, Lai, General Manager of Operations Peter Sparanese, and Josephson—a high level meeting. From another FOI we know that at least three of these people had been told by Restell through his memo and a presentation to the Steering Committee that the project had $5.2 million in unbudgeted costs. Did they tell the Mayor? Mayor Fortin did not respond to questions from Focus about whether he was briefed.

The dilemma for the Mayor is this: either he was accurately briefed or he wasn’t. If he wasn’t, as he has publicly stated, then why isn’t he concerned about not being accurately briefed? Isn’t that essential for him to effectively watch over the public interest? And if he was accurately briefed, why has he said he didn’t know about the cost increases? An inquiry is needed and ought to focus on the Mayor’s role in this issue.

David Broadland is the publisher of Focus.