Provincial Ombudsman Opens Investigation into City of Winnipeg’s Bonding Practices

Recent multiple Freedom of Information and Protection of Privacy Act (FIPPA) requests to the City of Winnipeg have raised serious concerns regarding the city’s bond market practices. These requests have been met with limited, evasive, responses from the city, leading to an investigation by the Ombudsman of Manitoba into the City’s conduct.

On August 3rd, 2023, we submitted a media request to the City of Winnipeg for basic information on the city’s bonds, including details not found in public documents. The city refused to provide this information multiple times through written correspondence. As a result, a FIPPA was sent to the City of Winnipeg on November 27th, 2023.

In the initial request for information, a city privacy coordinator indicated to us, “As explained in section 2 of FIPPA, the FIPPA request process is for requesting access to existing City records. Your request is for answers to questions and compiled information, and we cannot process it in its current form.” This essentially states that the FIPPA Act is meant to provide documentation, not necessarily to answer specific related questions, and suggested we connect with 311.

We responded by asking if 311 would be the best source of information, for such a request. In doing so, a follow-up email was sent from Denise Jones, the Corporate and Privacy Officer stating, “The scope of information requested is beyond what 311 will have readily available, and it is also beyond the scope of an access request under Manitoba’s Freedom of Information and Protection of Privacy Act. If you require answers to questions (as it is currently written), please redirect your request to the City’s Media inquiries for response and withdraw your FIPPA request. If you require access to a specific, existing record(s), please describe the record for us and we can search for it.” Denise was informed that multiple requests for information were sent to Mayor Gillingham’s office and the City’s communications department but went unanswered. We also indicated in our response, that we feel the City is giving us the run-around.

We then revised our FIPPA request and resubmitted it on May 8th, 2024, asking for specific documents regarding the City’s handling of bonds. The City responded with a letter informing public information regarding finances can be found on the City’s website, as it is a public record. However, it still did not address several of our specific questions.

We requested information regarding the type of bonds on the City’s books, and their certificate details dating back the last two decades. In a letter we received from Denise Jones, Corporate Access and Privacy Officer, she stated, “The time required to locate and prepare 20 years of transactions far exceeds what is considered reasonable under FIPPA; accordingly, we are disregarding this portion of your request as permitted by FIPPA section 13(1)(d).” When we asked for information about brokerages regarding how the bonds are disseminated, the City informed us that they deal directly with Schedule One banks. We asked for a list of who the Schedule One banks are, the city is indebted to for bonding, and how much, but we have yet to receive a response.

Also, in the response from the Privacy Officer, she said, “The time required to locate and prepare and review every Municipal Bond we held in 2023 (close to 100) far exceeds what is considered reasonable under FIPPA; accordingly.” We followed up with, “What is a reasonable response?” she declined to answer. Furthermore, in her response, she indicated, “We understand ‘Documents outlining the terms of the bonds, including borrowing and repayment rates and conditions’ to be the information on page 494 of the 2022 detailed financial statements which are available on the City website. The 2023 documents will be published on the City website in due course.” This leaves further questions: What is “due course,” and why is it taking more than half a year for the City of Winnipeg to post pertinent information about its bonding practice of 2023?

What is most troubling is the monumental Herculean undertaking associated with trying to access information from Mayor Gillingham’s City Hall. When the Privacy Officer was pressed for clarity, she responded by saying; “Respectfully, I stand by the response as issued. Your avenue for complaint if you are not satisfied with the response is through the Manitoba Ombudsman.” The very fact City’s official response is in essence, if you don’t like our response, take it up with the Ombudsman, is alarming and a smack in the face of transparency.

As of now, the citizens of Winnipeg still lack detailed information on the city’s bond practices. The Ombudsman’s office has now been tasked with investigating the City of Winnipeg, seeing they will not provide information freely. Its office will now seek to provide clarity to the citizens of Winnipeg on the following questions:

1. What type of bonds has the City of Winnipeg issued in the last 10 years, e.g., General Obligations (GO) or Municipal bonds?
2. If the bonds are GO bonds, are they limited or unlimited taxable?
3. What is the value of the bonds outstanding by the City of Winnipeg?
4. What is the bonds’ yield to maturity rate?
5. How many new bonds did the City of Winnipeg issue in the last 20 years, broken down by year?
6. Which banks hold the bonds from the City of Winnipeg and how much does each bank hold?
7. How are the repayments to each bank structured?
8. What is the total amount of outstanding bonds on the books of the City of Winnipeg and when do they expire?
9. What are all the projects being paid for by these bonds?

In addition, it would be helpful to know if there are bonds on the city books that have not been attributed to any projects yet, just sitting in the city’s coffers gathering interest while city taxpayers are paying interest on those amounts.

At a recent city forum during a budget committee hearing, citizens were allowed to ask questions regarding the city’s budget. Don Woodstock, a citizen and former Mayoral Candidate, posed pointed questions about the city’s bonds to Mayor Scott Gillingham. In response, Mayor Gillingham instructed that this was not the appropriate time to address bond concerns. “Mr. Woodstock, you are speaking to the $200 million bond, that’s not a part of today’s budget presentation topic,” said Mayor Gillingham.
When is the best time to ask questions about major city expenditures listed in the city’s budget? Is it unreasonable to bring up a specific budget item during a meeting focused on city finances and budget issues?

Should the citizens of Winnipeg be worried about the city’s finances? It’s one thing for the city administrators to direct them to the city’s website and go through the pages of financial documents and figure it out on their own, knowing that the average person can barely read a balance sheet, never mind a complex monstrosity compiled by chartered accountants who specialize in city finances.

So the questions we ask again: Should the citizens of Winnipeg be worried about the city’s finances? By no means are we suggesting or alleging the city has an insolvency issue? All we’re asking for is clarity. Right now, citizens, don’t feel confident in the current administration because the city has not always been transparent and forthcoming with information.

In 2013 the city of Detroit went bankrupt and filed for Chapter 9 bankruptcy owing over $18 billion in debt, mainly to the banks. At that time and still is, the Largest bankruptcy ever recorded in North America by a municipality. Many citizens likened the ordeal to a type of scheme, using the money from bonds they received from one bank to pay the interest of the bonds from another bank with limited revenues coming in and using those same monies to pay for projects that were slated in the past or for the future. It is prudent that any administration operating at a civic level, study the collapse of Detroit and use it as a teachable moment.

As concerned citizens, we would hate for the Ombudsman to come back and say Winnipeg has an insolvency issue because the ramifications of that would be catastrophic.

With the provincial Office of the Ombudsman now opening an official investigation into the City of Winnipeg’s bond practices, this will now become an investigation of interest. It is not only going to garner the public’s attention but also that of Canada’s Minister of Finance, the Premier of Manitoba, the Finance Minister, and the Minister responsible for Municipal Affairs. It would not be unreasonable for the province to order a full forensic audit of the City of Winnipeg’s books, specifically focusing on its bond transactions.