Toronto Mayor John Tory says he is disappointed a law firm must scrutinize a “flawed” $1.3-million consulting contract entered into by Toronto Community Housing Corp. – but he insists progress is being made at the long-troubled agency despite the CEO being placed on paid leave during the process.
“These kinds of things disappoint you,” Mr. Tory told reporters on Tuesday, stressing that he was not prejudging the outcome of the investigation. “They disappoint you greatly. … The bottom line is the process here, with regard to this particular contract, left something to be desired.”
The mayor said the city is spending hundreds of millions of dollars with some help from Ottawa and Queen’s Park to fix up many of the agency’s dilapidated social-housing units, improving life for the 110,000 people who call TCHC buildings home.
But Mr. Tory had made reforming Toronto’s massive public-housing landlord a key mission when he was first elected, convening a panel that called for sweeping reforms in 2016 after years of scandals and governance problems.
And now, as his second term as mayor begins, the agency’s leadership is in crisis. Its chief executive, Kathy Milsom, has been asked to step aside after TCHC’s board of directors – where three city councillors have seats – called in law firm Bennett Jones LLP to review how a three-year, $1.3-million management consulting contract was won earlier this year.
On Monday, the board issued a statement saying the contract, won by management consultant Edmond Mellina and his firm Orchango, had been terminated after the board learned the process to award it was “flawed” and “did not follow existing TCHC regulations.”
But the statement said the decision to place Ms. Milsom and another unnamed TCHC staffer on administrative leave was not discipline, but done only “to ensure the independence and integrity" of the probe.
The TCHC declined to release documents detailing how the bid was won. But a spokesman confirmed that under TCHC procedures, contracts worth less than $2.5-million are approved by a committee of senior staff or the CEO, and do not require board approval.
Mr. Mellina, who lists Loblaw, Sun Life Financial and Hydro Quebec as clients on his website, was awarded the contract after responding to a request-for-proposals (RFP) the housing agency issued in February. The RFP called for a consultant to provide “change management consulting services” to help transform TCHC’s “organizational culture” and make it “more responsive and tenant-centric.”
Mr. Mellina declined to comment on Tuesday, saying he was still consulting advisers about his next move.
When he won the contract, he was already working for TCHC as a consultant, with a much smaller contract that had been sole-sourced – awarded without competition – after Ms. Milsom took over as president and CEO in September, 2017, TCHC spokesman Bruce Malloch confirmed.
Mr. Malloch also confirmed that TCHC staff had determined that Mr. Mellina’s bid was 28 per cent higher than an internal staff cost estimate made before the RFP was issued, but that TCHC staff had decided the price tag was reasonable.
Mr. Mellina had also provided similar consulting services to the province’s non-profit Technical Standards and Safety Authority in a contract awarded when Ms. Milsom was the TSSA’s CEO in 2011, according to documents on Orchango’s website.
Jeff Gray