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Mayor challenges former councillors statements

By Allan Benner, The Standard

Pelham Mayor Dave Augustyn

Pelham Mayor Dave Augustyn

Pelham Mayor Dave Augustyn has called two special council meetings in response to concerns raised by a former town councillor, regarding an in camera meeting that took place in early September.

“Part of the oath we take when elected into office actually prohibits us from disclosing any information about those ‘in camera’ meetings,” Augustyn says in an e-mail sent to this newspaper, late Friday, responding to allegations made by Marv Junkin, regarding a discussion during a Sept. 5 in camera meeting about $17-million of debt accumulated since 2008.

Junkin says the discussion at that meeting indicated the debt was not recorded on town financial statements.

“The closed session rules and the oath allow Council to discuss land, legal and labour issues. Ultimately these rules are intended to protect residents and taxpayers. As a result, neither I, nor Councillors, nor staff can legally respond to the allegations or questions. Doing so could risk a lawsuit against the Town, result in criminal charges, and impact our finances,” Augustyn’s e-mail says.

“That’s why I have called a special Council meeting on Wednesday, Nov. 15 to consider the breach of confidentiality of the resigned and former member of council.”

Although Augustyn originally hoped an audit expected to be released before the end of the month, as well as staff reports regarding the town’s financial position to be released as part of 2018 budget deliberations would resolve concerns, he wrote in the e-mail that the town recognizes the importance of providing residents with access to accurate information about Pelham’s finances.

“In order to ease any concerns, therefore, I have called a special meeting of Council on Wednesday, 29 Nov. 2017 to receive KPMG’s external audit, and to hear from the Town’s new Treasurer about the financial plan moving forward,” the e-mail says.

“As Pelham continues to grow and flourish, councillors and I are more committed than ever to respect our responsibilities, keep working hard to manage growth and the town’s finances, and work together with resident and businesses to improve our community.”

In an interview earlier Friday, Augustine said Junkin “alleged many things, and I can’t directly legally respond to them. I’d love to, and I will when legally able to do so.”

The municipality’s regional Coun. Brian Baty, however, said the allegations against the town may warrant an in depth audit of the town’s finances.

And the town needs to respond to those allegations as soon as possible.

“While the mayor is saying they can’t speak about it because of confidential matters in closed session, etc., that doesn’t make the questions and concerns go away,” Baty said.

Baty also says the current audit being conducted by KPMG, commissioned by the town in early October, likely won’t dig deeply enough to resolve the concerns.

He says he suggested, when concerns about the town’s debt first arose, that “the best thing to do to clear the air was to conduct a full forensic audit, by a third-party.”

“Many of the councillors very soundly scolded me for taking such a position,” he recalls. “In retrospect, it was the right thing to say, and it’s unfortunate it didn’t happen at the time.”

Junkin’ allegations were published in a story by the Voice of Pelham, a local newspaper, following his resignation from Pelham council at the start of Monday’s town council meeting.

In that story, Junkin is reported as saying a KPMG auditor reported to councillors at the Sept. 5 meeting that while examining financial documents dating back to 2008, a cumulative $17 million of additional debt was discovered.

Junkin has not returned numerous phone calls from Postmedia placed throughout the week, since Monday evening.

During the meeting this week, the first-term councillor provided a written explanation for his decision to resign, saying: “As council continues down a path that I feel is increasingly unethical and dishonest, I have no choice but to resign my position, effective immediately.”

Although Augustyn again says he cannot discuss the allegation directly, he adds there “is certainly nothing untoward” regarding town finances.

“There are all these allegations about our audited financial statements from the auditor general. There’s nothing missing. There’s nothing misstated, and that’s what the auditor has told us,” he says.

“I think the article says it’s debt that has gone missing. As I said, the audited financial statements say there’s nothing missing from them and they are not misstated. The debt is the debt and it’s there and it’s been audited by a third-party.”

The most up to date audited financial statements are from Dec. 31, 2016, showing $21.3-million of long term debt. New debt added this year, primarily for the community centre, increased the amount owing to $31.9 million.

“That’s where we’re at. That’s what our plan has always called for,” Augustyn says.

Although there has been no corroboration of Junkin’ allegations, Baty says “there have been many calls and a string of emails and phone calls from people about it.”

Many of those people, he added, have been “asking for a full public release and disclosure of that Sept. 5 report, because that’s the hard data.”

The minutes of the Sept. 5 meeting say the in-camera portion was held to deal with advice subject to solicitor-client privilege, including communications necessary for that purpose; as well as personal matters about an identifiable individual, including municipal or local board employees.

The local newspaper reported that Junkin filed a complaint with the Ombudsman’s office last week, saying the town did not have legal grounds to hold the meeting in camera.

But no such investigation has been initiated, at this time.

The Ombudsman’s office communications director Linda Williamson says the organization does not confirm the receipt of individual complaints “to protect the integrity of our process and the privacy of complainants.”

“If and when we conduct an investigation and issue a report, the Ombudsman’s findings are of course public,” she explains.

Baty says he is “also shocked, if the report is correct … that the auditor was apparently told issues of fraud of issues of irregularity were not their concern. That seems very strange to me.”

“The solid question is how does an employee, only two weeks into the job, make such a significant discovery, when there are annual financial reports and audits? And this isn’t something new. This has been going on for a period of time. That’s the question at large. I find it difficult that this employee, new to the organization, is the only person who knew of the irregularities,” Baty says.

“It just doesn’t seem to make sense that this has gone on for a period of time, unnoticed by others.”

Augustyn says the town plans to pay off about 57 per cent of its debt through development charges arising from new residential growth.

“The taxpayer won’t pay for that. It’s the new homes that are coming in. The development community knows that and we’ve outlined a plan on how that’s all going to work,” he says.

“None of this is odd or anything like that. We knew there would be some financial strain this year, and next. But there’s lots of growth too.

“All of that needs to be factored in, as we look at the 2018 budget and that’s what we’re going to do. We like to do business in a measured responsible way. And that’s what we’re going to keep doing.”

ABenner@postmedia.com