An audit released Monday says fire hall projects were not well managed, lacked adequate oversight and did not follow proper city rules in Winnipeg.

The four fire hall projects are now pegged at $18 million, more than $3 million over budget.

“This is not a good day for city hall when this much has gone wrong,” said Coun. Paula Havixbeck (Charleswood - Tuxedo).

Coun. Harvey Smith (Daniel McIntyre) said the audit shows the process to award contracts to build stations was shoddy.

Smith said the report seems to vindicate former fire chief Reid Douglas, who was turfed a few weeks ago, suggesting Douglas was simply following orders from former CAO Phil Sheegl.

Sheegl resigned last week, but sources said the mayor's cabinet forced him out.

The report said the contracts to build four new fire stations did not face a competitive bid process.

“The openness, fairness and transparency of the procurement process used to contract for the construction of the four stations is in question. For the two attempted (requests for proposal’s) Shindico had information not available to other bidders,” stated the audit.

It said city staff ignored rules by awarding the contracts to build the new stations to developer Shindico, while keeping council in the dark.

Councillors suggested the report lays much of the blame on former CAO Sheegl.

“It all goes back to the person who used to be the CAO. That there was favouritism towards a particular development company,” said Coun. Ross Eadie (Mynarski).

The audit said Sheegl approved the most controversial part of the project – a land swap deal that saw a new station built on land on Taylor Avenue owned by Shindico, and not the city.

The mayor said he still doesn’t have a clear answer as to how that happened.

“I would never ever dream we would build a fire hall on land we did not own,” said Katz.

Former fire chief Reid Douglas helped negotiate the land deal and was in way over his head, states the audit.

“The project was assigned to an individual who did not have the appropriate expertise nor the resources within his department to manage it,” it said.

“The fire chief comes across as a person who is not responsible,” said Coun. Smith.

The audit contains 14 recommendations, including taking some of the power away from the CAO when it comes to awarding contracts.

The EPC passed a motion Monday supporting those recommendations. Mayor Katz said they will be implemented immediately.

While auditors said city policies were not followed when it comes to awarding contracts, nothing criminal took place.

Coun. Jeff Browaty (North Kildonan) said, from his view, the way developer Shindico was awarded the project work needs further investigation.

Former fire chief Reid Douglas may also appear at city hall Tuesday.

The Canadian Taxpayers Federation said the report does little to instill confidence in city hall.

The report estimates the city may also have to spend more, potentially another $1 million, to acquire the land on Taylor from Shindico.

Other questions surfaced over severance offered to former CAO Sheegl, estimated to be in the hundreds of thousands of dollars.

Mayor Katz said Sheegl’s severance is not up for negotiation.

“They have a contract as to what they may or may not get,” said Katz.

- with reports from Jeff Keele and Karen Rocznik