Region requests that Town commission audit

Mayor Augustyn looks on at Monday's Audit Committee meeting. YOUTUBE SCREENCAP

Call for clarity bolstered by $50,000 offer to underwrite cost


The ongoing conflict between the Town of Pelham and those seeking to investigate its finances continued on Monday at a meeting of the Niagara Regional Council’s Audit Committee. The committee, comprised of Regional councillors—including Mayor Augustyn—met for over two hours, most of which was spent discussing allegations made by developer Rainer Hummel regarding Town financial practices.

Town solicitor Callum Shedden first took to the podium to summarize a motion passed at the last meeting of Pelham Town Council. The motion stated that the Town would no longer participate in the Region’s review process because Niagara Region lacks jurisdiction over municipal finances. Shedden acknowledged that Hummel was present, but said that Hummel was “in the wrong room at the wrong meeting. He should be at the Town, where there is jurisdiction.”

Echoing the motion passed at Pelham Council’s meeting, Shedden said that the Town would no longer “spend the time and money” required to defend itself. Part of that time and money has, no doubt, accrued to Shedden and his law partners.

When asked by Councillor David Barrick why development charge credits were issued when the parkland was bought, Shedden declined to answer, saying that his retainer for the day was merely to report Pelham’s motion to the Audit Committee. Barrick was not pleased.

Barrick then asked Shedden which funds were repurposed to fund the IOUs offered as development charge credits. Shedden replied that “the answers are there—you just have to look for them.”

Councillor Bart Maves began to speak to the history of his concerns regarding Pelham’s community centre financing. As Maves spoke, Augustyn said something that was barely audible. Maves stopped and addressed the Chair.

“[Augustyn and I] have sat near each other for a long time, and he knows that if there’s one pet peeve I have it’s nattering. He always has to natter,” Maves said.

“Stop nattering,” said Committee Chair Tony Quirk.

“I apologize,” said Augustyn.

“The member apologizes all the time,” said Maves.

The developer Rainer Hummel then took the podium. His initial presentation was brief, and concluded with his holding up what he said was a cheque for $50,000 to pay for a third-party audit of Pelham’s books.

“I’m glad I don’t have a ten-minute limit,” Maves said, launching into a long list of questions, most of which concerned the presentation that Pelham CAO Darren Ottaway made at the last Pelham Council meeting, a copy of which was included in Monday’s Audit Committee agenda. Much of that presentation was “very denigrating” to Hummel, Maves said.

“There’s truthiness in it,” Hummel said of Ottaway’s remarks, using the phrase popularized a decade ago by satirist Stephen Colbert to describe distortions based on half-truths.

But Hummel stipulated that his allegations were questions, and included the words “may” and “questionably” because the Town had not released documents that could confirm or refute his allegations.

“The truth is fun,” said Maves. He asked Hummel whether he had any doubts over whether the development charge credits were issued.

“These were DC credits,” Hummel said, declining the cautious phrasing that his lawyers advised he use.

“I’d prefer to be sued at this point,” he said, asserting that this would result in the production of documents previously unseen.

Maves moved on to the land that the Town bought, for which Hummel alleges far too much money was paid. The Town asserts that the land was appraised as parkland, and thus had to be appraised as fully serviced, something Hummel says should not have been done.

Councillor Tim Rigby asked why Hummel had not approached Pelham’s Town Council directly.

“You certainly know when you’re not wanted,” said Hummel, and alluded to Council’s harsh treatment of Regional Councillor Brian Baty when Baty called for an audit at a Council meeting earlier in the summer.

Augustyn took the moment to “extend an invitation” to Hummel, and to Regional councillors, saying that he hoped no one would feel unwelcome appearing in Pelham Town Hall. Onlookers, comprised mostly of Pelham residents, guffawed.

Finally, Barrick put forward a motion that received Hummel’s comments and requested that the Town of Pelham commission an independent third-party audit of its books, in conjunction with both the Audit Committee and with Hummel.

Later, Barrick acknowledged that it would be up to Pelham to determine whether such an audit would proceed. Since Hummel has offered to pay the cost, Barrick said, Pelham “really doesn’t have a rationale to not accept it, and if they don’t accept it, then why? Is there something to hide?”

Pelham residents in attendance were pleased with the committee’s motion. Paul Bryant said that it was “good to see continued action on the matter,” and hoped that the audit would be done with “appropriate timeliness.”

After the meeting, Rainer Hummel, left, and Mayor Augustyn speak. VOICE PHOTO

But the morning’s most interesting exchange came after the room had emptied. As Hummel prepared to leave, Augustyn approached and introduced himself. The two had never formally met.

“We were very confused, because we’ve answered all these questions,” said Augustyn. “We’ve been very straightforward, so we’ll be pleased to sit down with you at the appropriate time.”

“I don’t think you’ve answered them,” said Hummel. “The questions…what part of that land is park dedication? Are hazard lines being given as park dedication?”

“They’re not,” Augustyn said. Hummel listed off more inquiries regarding Summersides Boulevard.

“So now you’re adding questions,” said Augustyn. “But that’s fine.”

“I’ve had those questions all along, but you get ten minutes to speak here,” replied Hummel. “I could spend two hours on the questions.”

“Well then we’ll have to do that. And eat,” said Augustyn.

“The very basic one is who pays $920,000 for a piece of land that you could’ve bought the day before for a lot less,” said Hummel.

“I don’t know where you’re getting the day before.” said Augustyn.

The two argued over the facts for a minute. Hummel reeled off a litany of land purchases and mortgages that he said that he’d researched.

“When did you give the three million in development charges to the Allen Group?” Hummel asked.

“In September of 2015, we set up the system for purchasing the parkland,” Augustyn said. “It’s all here. By-law 3650.”

Hummel shook his head. Augustyn relented.

“All right, then we’ll sit down, I’ll get staff in the room, and we’ll go through it all with you. But we’ve answered all of the questions, as far as I’m concerned. I’m sorry you haven’t seen them.”

“I have seen them,” said Hummel. “But that doesn’t answer the question.”

“Well you think it doesn’t, and I think it does. So let’s get to the bottom of it,” said Augustyn. As the two parted they seemed to agree to meet again.

After Augustyn left the room, Hummel made an indelicate observation. Then, realizing that he had made it to a reporter, requested that it be kept off the record. ­

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