Presentation to Mayor & Executive Policy Committee: $30 Million Missed Lawsuit re Deacon Water Treatment Plant

Following revelations about the City legal department missing the deadline to file a $30M Statement of Claim with respect to deficiencies at Winnipeg’s Deacon Water Treatment Plant, I spoke to the Mayor and his Executive Policy Committee on October 11, 2017. See transcript and videos below.

The Public Service is expected to report back to Council in 120 days (February 2018) explaining how the Statement of Claim was missed, as per details of the omnibus motion.

October 11, 2017 Councillor Lukes transcript

Good morning Mr. Mayor and Executive Policy Members. I will be speaking to item #6, Councillor Scott Gillingham’s motion.  

On November 26th 2015, the Mayor and I (in my role as Chair of Infrastructure Renewal and Public Works at the time) signed the authorization to file a Statement of Claim in the Court of Queen’s Bench. Documents accompanied our authorization – both our signatures were required due to a resolution of Council in 1979. Along with listing the companies, the Statement of Claim indicated that while it was not yet possible to quantify the dollar amount with precision, the City’s legal services department estimated deficiencies in the Deacon water treatment plan of over $30M.

Once the Statement of Claim for $30M was filed in 2015, it became a public document and media picked up the story. Council became aware of the following facts only through media coverage:

  • 2009 – Court documents alleged several problems began surfacing at the state-of-the art water treatment plant when it was put into service in 2009.
  • 2012 – Documents alleged the plant had a series of “significant” and “catastrophic” failures — beginning in August 2012 and continuing for another 12 months.
  • I want to be clear, for the record, at no time since August 2012 and to today, has the Water and Waste Department submitted ANY  reports to any Council committees about what the deficiencies at the Water Treatment plant were, or were caused by.

Previous City Council members (2010-2014) have also publicly stated they received no reports from the Water and Waste department on the deficiencies either:

  • Councillor Wyatt (Finance)
  • Councillor Mayes (Public Works)
  • Councillor Browaty as a member of Mayor’s Executive Policy Committee all stated they were never briefed
  • Dan Vandal when he was City Councillor and a member of the Mayor’s Executive Policy Committee

This pattern of not releasing any reports or information about the Water Treatment plant continues. The ONLY information of any kind this Council has received from Administration was when Mr. McNeil, the City’s Chief Administrative Officer (CAO), replied to an inquiry in an email to Councillor Dobson, and copied all of Council stating:

  • “Council was not immediately informed because the operability of the plants was never affected by these deficiencies.  Water quality continued to meet our license requirements and effluent from the West End Water Pollution Control Centre (WEWPCC) also met license requirements.  Customers were never impacted and the public service attempted to resolve these issues through the contractual arrangements and outside of the courts.” 
  •  IMPORTANT TO NOTE: Mr. McNeil goes on to say “Any public reporting may have jeopardized the negotiations as well as the litigation  process.”
  • Just to note –Councillors were asking for a confidential briefing.

Mr. McNeil’s email goes on to state:  “The decision to brief Council would have been outside of the public service’s authority.”

Mr. Mayor, if Mr. McNeil believes any decision to brief Council is OUTSIDE the public service’s authority – then who has that authority? I’ll tell you – YOU DO Mr. Mayor – YOU have that authority to brief Council and that did not occur.  Clearly you directed the CAO not to brief Council on the water treatment plant issues.

 And FURTHER to NOT engaging with ALL of  Council:

  • When the Council Seminar was called on September 18th this year, you, the Mayor of the City of Winnipeg weren’t even in attendance. When Mr. McNeil and Ms. Boryskavich (Director of Legal Services) told Council that the law department missed the 6-year limitation period and Council members learned taxpayers could now be on the hook for covering potentially over $30 M, you were not there. 

And again you continue to be invisible:

  • At the September 20th EPC meeting, you had the opportunity to demonstrate leadership and serious intent to start cleaning this mess up.  You could have brought forward a motion at the September 20th EPC meeting to get to the bottom of this multi-million dollar bungle. You knew about it but you made no motion to investigate.

Instead, the following week at the September 27th meeting of Council, Councillor Wyatt and I brought forward a motion. But only Councillor Wyatt and I, no one else!

And again you continued to be invisible:

  • The day AFTER Councillor Wyatt’s and my motion was tabled at Council on September 28, a member of your Executive Policy Committee, Councillor Orlikow, sent an  email to all of Council saying he spoke to the Mayor and will be calling for an audit at the next EPC meeting.
  • That same day Council received an email from Mr. McNeil stating: 
    • “To ensure that this doesn’t happen again, I have spoken with the Director of Legal Services and she advises that she has implemented process changes within the litigation team to ensure that limitation dates are proactively researched, monitored and tracked.”

 And still you continue to be invisible:

  • On October 2, another member of your Executive Policy Committee, Councillor Gillingham, put forth a motion at the Water and Waste Standing Policy Committee calling for a THIRD PARTY REVIEW – an outside review. An outside review because he has lost faith in our internal reviewing process. 

Last Friday at 3:30 pm, the EPC agenda was published:

  • Councillor Wyatt’s and my motion for clarity was not on this Executive Policy Committee agenda, yet Councillor Gillingham’ s was.  I spend the better part of yesterday confirming from the City Clerks WHY our motion did not appear.
  • I was told, and I know this, but couldn’t believe this would be the reason: “The Mayor sets the agenda and that Councillor Wyatt’s and my motion would be NEXT week.”

And then, at the 11th hour last night, around 5:30 pm, one of your policy soldiers calls me and tells me that an ‘omnibus motion’ would be coming forward at today’s meeting incorporating motions from Councillors Wyatt, Lukes, Gillingham and Orlikow.

  • I asked to see a copy of the omnibus motion. Not possible.
  • I asked if the motion sought a third party review. No – internal review only.

So today, I guess this motion will appear? No Councillor, who is not on your Executive Policy Committee will be able to read it and speak to it today to offer input. Nothing.  And it will be sent off I believe for 120 days, which I’ve come to learn can be much longer. I’ve had motions for action delayed for over 2 years.

The secrecy surrounding this file, the restriction and suppression of information, the utter lack of openness and transparency on this $30 M fiasco, is directly a result of this dysfunctional and outdated strong mayor governance model we have in place.

When only two people, the Mayor and CAO, are the sole decision makers – no different that want we saw in the previous Council – when these two try to suppress and keep hidden critical information – the tax payer ends up footing the bill.

  • We saw it last Council, and we are seeing it again – just with different faces.

 It been 20 years since this City’s conducted a governance review. I recognize its not a sexy topic, but if any kind of transformational change is to occur in this City, we must hold a governance review.

 So in summary, I want it noted on the public record that to date I have only received two  paragraphs of information from Mr. McNeil on this entire fiasco. Two paragraphs.

I want accountability – residents want accountability.

I am asking that the motion you bring forward today be a NOTICE of motion, so ALL councillors can have the opportunity to review and read and speak to if they wish.

There is no rush for today. The motion can come to EPC next week, and then go to Council the following week.

And in closing, I ask you Mr. Mayor and all of your Executive Policy Committee:

Where do you draw the line in the sand on the competence or loss of confidence of a CAO it is at $10M error, a $20M error or more?

  • I reflect back on the $20M Hydro fiasco that is costing taxpayers millions
  • I reflect back on the excessive cost paid by taxpayers on the land that was missed being secured on the Waverley Underpass pass project
  • And now this – how can the CAO lose control and oversight of one of the largest lawsuits the City has seen in recent times? a $30M lawsuit?

 I’ve drawn the line in the sand- and now its been crossed. 

 I believe it is time for you Mr. Mayor, and EPC to look carefully at what these administrative decisions are costing the taxpayers – and where the ultimate YOU draw the line in the sand related to confidence of a CAO’s abilities.

For additional background information on this matter, please see my website:  Motion requesting details

With thanks to the Winnipeg Free Press for covering this important issue:   Winnipeg Free Press news story






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