So much for the tired argument put forward by Mayor Mel Lastman and his subservient CAO that the MFP Financial fiasco was just a ripple on the otherwise placid bureaucratic pond.Members of council's audit committee just aren't buying that line any more. And they've got themselves another report from auditor Jeff Griffiths to support the growing case for a major administrative shakeup at City Hall.
Late last week, Griffiths presented the committee with a 16-page dispatch that tore a huge strip off staff in the transportation division for failing to properly monitor a contract with the private company that supplies the city with transit shelters. The seven-year deal -- signed in 2000 -- obligates Viacom Outdoor Canada Inc. to meet all of the city's transit shelter needs in return for the exclusive right to sell advertising space on as many as 3,800 structures. The firm is supposed to pay the city about $4 million annually (about 27 per cent of yearly ad revenue) and give the municipality 110 spaces for its own advertising uses.
But according to Griffiths, transportation staff never bothered to find out how many shelters Viacom has located around town. And neither did they know if the company has the required liability insurance to protect the city from lawsuits in the event of shelter-related accidents.
"Our review found that there is a lack of centralized administration and coordination of the Viacom contract which has contributed to inconsistent practices," the auditor's report said. Griffiths also noted, "There are no written criteria/standards that would provide appropriate guidelines for district field staff to consider when approving shelter site locations.
"The majority of district field staff were unfamiliar with relevant contract provisions and therefore are unable to monitor and enforce certain contractual obligations," he wrote.
Furthermore, "They have not met to exchange information and develop best practices to effectively deal with Viacom and ensure contract deliverables are met."
The report left councillor Bas Balkissoon fuming. He was opposed to Viacom (formerly Mediacom) getting the contract two years ago because it was awarded without benefit of a tender after fierce pressure was brought to bear on politicians by renowned lobbyist Jeff Lyons.
In an interview this week, Balkissoon said he was unimpressed by Viacom's performance when it had a similar transit shelter contract with the pre-amalgamation city of Scarborough and wanted another option. But after an acrimonious debate, Toronto council approved (by a vote of 28 to 21) a staff recommendation that harmonized bus shelter advertising across the new city.
"There was definitely a perception in my mind that this company does things, but they will do them when they're pushed," Balkissoon said. "And if you don't monitor their contract, they'll do just the minimum."
But he agreed that it's hard to hold Viacom responsible if the city drops the monitoring ball.
"I think senior staff here say, "Hey, easy money. We get a cheque for $4 million a year. Why bother to go out and check on it? Who's going to care? Council will not care.' So the company says, "We'll do things to suit ourselves because nobody's watching us.' And as a result the city has no way of knowing if the terms of the contract are being met or if it's getting the money it should."
Blair Murdoch, Viacom's vice-president, insisted the company is living up to all the terms of its contract -- including the insurance requirement.
"Just because something wasn't monitored properly by city staff doesn't mean the work performed wasn't performed correctly," he said. "We performed everything correctly. Whether or not it gets monitored correctly is up to the city."
Murdoch said Viacom responds to the city's requests for advertising space on a monthly basis. But, he added, "We're not calling them to see if they're using all of their space. We're a pretty busy company. We're involved in a very complex project."
That very complexity gives the city all the more reason to keep tabs on the contract, argued councillor Michael Walker.
"What I really want to know is how this contract was awarded without going through the tender process," the audit committee member said. He has asked Griffiths to investigate the situation and report back to committee in the new year.
"We've got to get right down to the core of this," Walker said.
But Barry Gutteridge, the commissioner of works and emergency services, said council approved the Viacom deal because "there was a good business case" for it. The decision allowed the city to roll seven separate pre-amalgamation contracts with the company into one while reducing the overall length of the agreement and picking up much-needed revenue.
"I'm not trying to dodge the bullet," Gutteridge said of Griffiths's report. "But any time the auditor looks at any process, he always finds room for improvement. Could things have been done better? Yes, we agree."
However, the commissioner suggested the Viacom contract should be put into political context.
"This council has a history, too," he said. "Whenever something is acrimonious like that in terms of the original decision, every time it comes back we get into a discussion of some sort about it. It's like we revisit the debate around it.'
That statement is unlikely to mollify councillor Rob Ford. He wasn't on council when the Viacom contract was approved, but he's on the audit committee now.
"How do they get away with it around here?" he asked. "In the private sector, heads would roll over something like this."
If Walker had his way, heads would roll in the public sector, too.
"I think there are more than likely some people in the bureaucracy who will have to go after the next election," he said. "We're going to have to clean house and make sure it behaves like a bureaucracy and not like a bunch of politicians anticipating the master's requests and bending the rules. This can't go on."
But chances are it will so long as the current master or his proxies rule the roost at City Hall.