MONTREAL - Montreal city council will meet Tuesday afternoon to continue debating the latest report from Auditor General Jacques Bergeron.

He will have to face a 90-minute grilling from councillors who have looked over his latest report, then will follow that up with a presentation to the media.

Two key issues in the report are the spy scandal, and the bad deals the city has made for real estate.

Bergeron says the city has done very poorly in negotiating land deals around the Quartier des Spectacles.

He was very harsh in criticizing three parcels of land the city bought for $11.7 million, then sold last year for less than $3 million.

Bergeron says the city did not do proper evaluations of the property, and in the end, ripped off taxpayers.

Spy Scandal cost taxpayers

In his 400-page report Bergeron opens with a chapter devoted to the spy scandal, where he vigilantly defends his autonomy.

Bergeron maintains that former Comptroller Pierre Reid had no right to read private emails, and is demanding a network that is separate from the city's system.

City Manager Louis Roquet says that wil be be done, for email, computer systems, and cell phones.

"The systems to which the verificateur general and all elected officials and their personnel will be completely independent from the systems of the city of Montreal," said Roquet.

But Michael Applebaum, chairman of the city's executive committee, says he would rather the AG spend less time focussing on how the city is investigating the watchdog's office.

"Maybe some of his time should be put more into services and how we're managing the city of Montreal," said Applebaum.

Bergeron does note in his report that dealing with the spying by Reid has cost the city $288,000.

Poor maintenance, infrastructure spending

Aside from the spy scandal, Projet Montreal says the 2010 report concentrates on many issues that affect all citizens, including crumbling infrastructure.

More than 65 percent of the city's tunnels, roadways, and sewer systems are more than half a century old.

Projet Montreal leader Richard Bergeron (no relation to the AG) says the report highlights the lack of skill and knowledge among the city's bureaucrats

"We learn in this report that the city of Montreal does not have the expertise to know what are the main dangers for Montrealers," said Richard Bergeron.

In the report, the AG notes that the city has promised to spend $48 million each year on tunnels and roads, but that only one-third of that money has been spent.

Bergeron has also been preparing a report into the city's Bixi program which will be delivered in June.

Read more about the Bixi program and the proposed bailout package.