The resignation of City of Winnipeg CAO Phil Sheegl, just days before a controversial audit is to be released, has a former adviser to the mayor saying, "I told you so."

Brian Kelcey, who used to work for Sam Katz, said Sheegl — a close friend of the mayor — should never have been hired  as the city's chief administrative officer in the first place.

Sheegl to get compensation

Phil Sheegl will receive a compensation package, CBC News confirmed Friday.

The mayor's office declined to comment on the matter.

Sheegl, who made just under $241,000 last year, left his job as the city's top bureaucrat just days before a review of a controversial land swap deal involving fire halls is to be made public on Monday.

"The list of problems that can be pegged to this gentleman and his management of city hall is too long to put on radio," Kelcey told CBC News.

Kelcey said he thinks Sheegl quit because he would have been fired by councillors next week after a long-awaited audit into a controversial land swap involving fire halls is set to be released."So any notion that this is just about the audit is just a classic case of missing the point."

Sheegl was responsible for axing fire chief Reid Douglas last month, who was expected to answer questions about the land swap.

Last November, city council killed a deal to have land developer Shindico exchange land on Taylor Avenue for three other city properties.

The swap, arranged by Douglas, called for land on Taylor Avenue to be swapped for two surplus fire stations and a parcel of land on Mulvey Avenue.​

City council said they were never informed about the deal and when news it had been made surfaced, a the deal was killed and an audit ordered. By that time, construction had already began on a new station on the Taylor property, even though Shindico still technically owned the land.

With Douglas' firing, city councillors were left without someone at the centre of the controversy to offer explanations. Sheegl never explained his decision to let Douglas go.

Sheegl was also in the headlines one year ago when CBC News learned he sold his Arizona-based company, Duddy Enterprises LLC, to Katz for $1.

The transaction, however, never appeared on the mayor's statement of assets and interests that is required to be filed under Manitoba's Municipal Council Conflict of Interest Act.

Katz claimed the city clerk ruled he didn't have to disclose the company transfer because Duddy was a dormant "shell company" that did not transact any business.

However, a deal between the mayor and the city's top bureaucrat shouldn't be kept from the public record, critics said.

'Sam's mistake'

Katz and Sheegl were good friends at the time Sheegl was recruited for the city's top bureaucratic job in 2011.

And it was Katz who endorsed his friend's hiring in a council vote, so "this is Sam's mistake," Kelcey said.

"He wears it and it didn't need to happen this way. There were plenty of other, more qualified candidates who would have been better suited for the role."

The pressure is now on city hall to make sure the next CAO is qualified, Kelcey added.