 |
| Developer Rainer Hummel holds an envelope during Regional Audit Committee meeting that he said contained a cheque for $50,000 to pay for an audit of the Town of Pelham finances. Credit: POSTMEDIA |
You will recall that some Regional Councillors started questioning Town issues on March 30, 2017 when Regional Councillors Barrick (Port Colborne) and Gale (Niagara Falls) put forward a motion that included 13 accusations about Pelham’s debt, finances, and property taxes. Why at the Region? They said the Region could talk about Pelham because the Town’s debt might impact the Region’s Standard & Poor’s AA Credit Rating. This was later disproved since the 2017 S&P report shows that the Region could borrow an additional $282 million before risking a credit rating downgrade.
Town Staff responded with a 335-page comprehensive report that refuted each of the 13 claims in the motion. Yet, instead of letting me respond to the March 30 motion as Pelham’s rep, a majority of Regional Council referred the matter to a June meeting of the Regional Audit Committee.
On April 3, Town Council reviewed and endorsed the Town’s response to the Regional motion. Worried that Pelham residents might have questions, Council directed Staff to organize an “Evening with the Experts.” About 100 people attended the panel discussion on April 24, with 17 people asking questions of Town Staff and professional advisors.
Then Town Staff attended and answered all questions at the June 12 Regional Audit Committee meeting. Despite my insistence that the Region has no jurisdiction in Town matters, Committee Chair Quirk (Grimsby) allowed specific questions about Pelham including parkland over-dedication, property purchases, water and tax rates, development charges and credits, library budgets, and cemetery fees. After these Town responses, the Audit Committee approved a motion that removed all references to Pelham.
When that revised motion went to the June 29 Regional Council meeting, Rainer Hummel, a Niagara developer, made numerous accusations about Pelham regarding a parkland over-dedication and a development charge credit agreement with Fonthill Gardens. Despite my request, the Regional Chair refused to recognize that the presentation was outside the Region’s jurisdiction. Following the presentation, a majority of Regional Council referred the matter to the September 18 Regional Audit Committee.
 |
| After Sept. 18, 2017 Audit Committee, I chatted with Rainer Hummel for the first time. Credit: VOICE PHOTO |
Town Council sent a strongly worded motion and Mr. Shedden to outline the Region’s lack of jurisdiction to the September 18 Audit Committee meeting. Instead of heeding the legal advice, the majority of the Audit Committee voted to allow Mr. Hummel to speak again. During his presentation, Mr. Hummel admitted to never raising his concerns with the Town or myself directly. Instead, he said he had a cheque for $50,000 for the Region to pay for the Town to undertake an audit of the parkland over-dedication and development charge credit agreement.
The committee “endorsed” the funds and recommended that Regional Council ask the Town to undertake an independent audit, but with the involvement of Mr. Hummel and Regional Staff.
I have thought a lot about and spoke to many people about this matter since last week.
For example, neither Town Staff nor Fonthill Gardens fear an audit, because it will then clearly show that all parties handled the parkland over-dedication and credits appropriately and legally. Some folks asked me why the Region’s Audit Committee was baited by the cash and agreed to the involvement of a developer in what should be an independent process. Others still cannot understand why some Regional Councillors interfere in Pelham business.
I will recommend to Pelham Council, therefore, that we initiate an independent, third-party audit of all transactions and documents related to the 3.3-acre Parkland Over-Dedication to the Town by Fonthill Gardens and a 2015 Development Charge Credit agreement between the Town of Pelham and Fonthill Gardens. While I am certain that we followed all laws and appropriate policies with these transactions, I hope than an independent audit will help satisfy those with questions.
Yet, I will not recommend that Pelham Council accept the lure of the money. I believe it is ethically inappropriate to accept the $50,000 because it sets an unacceptable precedent of granting wealth great influence and privilege in municipal decision-making. Further, it is beneath the high-standard that the public expects from Town and Regional Councillors and Staff.
Watch for Town Council to discuss these types of motions at our next meeting.
You may contact Mayor Dave at mayordave@pelham.ca or read past columns at www.pelhammayordave.blogspot.ca.
_____________________________________________
Update: Monday, October 2, 2017
Pelham Council approved proceeding with an independent, third-party audit. Council also refused the "cash to influence" offer.
Here are the approved motions:
Initiate an Independent, Third-Party Audit of Parkland Over-Dedication and 2015 Excess Parkland Dedication Agreement
WHEREAS the Council and Staff of the Town of Pelham pride themselves in being open and transparent; and
WHEREAS the Town has provided complete details and answered all questions generated by some members of Regional Council and some members of the community by presenting a 335-page comprehensive response document and addendum to a March 2017 motion at Regional Council, answering all citizen questions during an “Evening with the Experts” panel, and disproving all claims and accusations made by a Niagara developer at Regional Council; and
WHEREAS despite these answers and complete documentation, some members of the local community continue to ask questions about the 3.3-acre Parkland Over-Dedication to the Town by Fonthill Gardens and a 2015 Excess Parkland Dedication Agreement between the Town and Fonthill Gardens; and
WHEREAS Deloitte Canada has provided the Town with independent, third-party audits of the Town’s financial statements for the last six years with “unmodified Independent Auditor’s reports” that are “free from material misstatements”; and
WHEREAS KPMG Canada would be an acceptable supplier of services to the Town of Pelham having ranked second in the 2016 tender by Pelham for independent, third-party auditing services;
THEREFORE, BE IT RESOLVED THAT Pelham Town Council directs Staff to RETAIN forensic auditing experts with KPMG Canada to undertake an independent, third-party audit of all transactions and documents related to the 3.3 acre Parkland Over-Dedication to the Town by Fonthill Gardens and a 2015 Excess Parkland Dedication Agreement between the Town of Pelham and Fonthill Gardens; and
THAT KPMG Canada PRESENTS a public report of their findings, with costs to undertake the audit, directly to Council at a meeting before the end of November 2017; and
THAT this resolution be CIRCULATED to Niagara Regional Council for their 5 October 2017 meeting, to all Niagara municipal Councils, to all Niagara MPPs, to the Minister of Municipal Affairs, to local news media and to KPMG Canada, and posted on the Town’s website.
Refusal of Cash to Influence Offer
WHEREAS the Council and Staff of the Town of Pelham pride themselves in being open and transparent; and
WHEREAS the Town has provided complete details and answered all questions generated by some members of Regional Council and some members of the community by presenting a 335-page comprehensive response document and addendum to a March 2017 motion at Regional Council, answering all citizen questions during an “Evening with the Experts” panel, and disproving all claims and accusations made by a Niagara developer at Regional Council; and
WHEREAS despite these answers and complete documentation, some members of Niagara Regional Council and a Niagara developer continue to accuse Pelham Council and Staff of impropriety regarding a 3.3-acre Parkland Over-Dedication to the Town and a 2015 Excess Parkland Dedication Agreement with the Town; and
WHEREAS Pelham Council unanimously approved a motion to send the Town lawyer to the September 18, 2017 Regional Audit Committee to clarify that the Municipal Act does not grant Niagara Region jurisdiction in these Town matters; and
WHEREAS during that meeting some members of the Regional Audit Committee ignored the fact that the Region does not have jurisdiction, yet persisted in asking detailed questions about Pelham transactions and made accusations of impropriety; and
WHEREAS the Regional Audit Committee accepted and endorsed a cheque from a Niagara developer for $50,000, and recommended to Regional Council that it request Pelham Council to consider using those developer funds to undertake an audit of Town transactions; and
WHEREAS the Audit Committee motion compromised the independence of such an audit by specifying the involvement of the developer, the Regional Audit Committee members, and Regional staff in the audit; and
WHEREAS the Niagara Regional Council Code of Conduct demands that members shall observe the highest standard of ethical conduct and are expected to “Act honestly, independently, impartially, with discretion…” and to “Conduct themselves in a way that maintains and promotes the public’s trust in the Regional Municipality of Niagara;” and
WHEREAS accepting these funds would grant wealth great influence and privilege in municipal decision-making and goes against the Values of the Town of Pelham; and
WHEREAS, to us, accepting money from a developer is behaviour which is beneath the high-standard that the public expects from members of the Regional Audit Committee, and Regional Council generally;
THEREFORE, BE IT RESOLVED THAT Pelham Town Council unequivocally REJECTS the inappropriate request by the Region’s Audit Committee to influence Town actions; and
THAT Pelham Town Council REAFFIRMS its jurisdiction over Town of Pelham matters and REQUESTS Regional Council to reaffirm the “Spheres of Jurisdiction” between regional and local municipal corporations as legislated by the Ontario Municipal Act; and
THAT this resolution be CIRCULATED to Niagara Regional Council for their 5 October 2017 meeting; to Mr. Rainer Hummel, the Niagara developer; to all Niagara municipal Councils; to all Niagara MPPs; to the Minister of Municipal Affairs; and to local news media; and posted on the Town’s website.
_____________________________________________
Update: Friday, October 6, 2017
On October 2, 2017, at the regularly-scheduled Town of Pelham Council meeting, Town Council retained KPMG Canada to conduct a third party audit of all transactions and documents related to the 3.3 acre parkland over-dedication to the Town by Fonthill Gardens and a 2015 excess parkland dedication agreement between the Town and Fonthill Gardens.
The Town is encouraging all those with questions to submit them directly to the forensic auditor, Karen Gorgan, senior vice-president of KPMG Forensic Inc.
Questions and concerns will be acknowledged with a receipt of submission, but will not be responded to directly. Instead, the questions submitted will be addressed and noted in the report without names.
“Town of Pelham Council recognized that there are many questions from the community regarding parkland over-dedication,” said Mayor Dave Augustyn. “To make the audit completely independent, Pelham Town Council has retained KPMG Canada to undertake an independent, third-party audit of all transactions and documents related to the parkland over-dedication and the development charge credit agreement.”
Any comments, questions, and concerns can be sent to townofpelhaminfo@kpmg.ca up until October 17, 2017.
KPMG Canada has been asked to report their findings, publicly and directly to Council at a meeting prior to the end of November 2017.
