Region Audit Committee calls for OMB to investigate Pelham

Residents Nancy Beamer and Bernie Law at the podium on Monday. VOICE PHOTO


In front of nearly 40 Pelham residents on Monday, the Niagara Region Audit Committee voted to call on the Ontario Municipal Board (OMB) to conduct a full investigation of the Town of Pelham’s finances.

The motion, authored by Councillor Selina Volpatti, cited December reports by the auditing firm KPMG as the reason for concern. KPMG wrote that it was “unsure” whether a Town credit scheme violated any by-law or municipal legislation, and that the Town “appears to be offside” on its end-of-year reserve fund balances.

The Audit Committee’s motion, still to be approved by Regional Council, requests the Minister of Municipal Affairs “direct the Ontario Municipal Board to conduct an inquiry” into the matters referenced by KPMG, as well as “any other financial matters” under the OMB’s special municipal jurisdiction.

Councillor David Barrick said that Pelham has repeatedly asserted that the Region has no jurisdiction to investigate Town finances, but that this referral to the OMB “puts the matter in a body that certainly has jurisdiction.”

Despite being a member of the Audit Committee, Pelham Mayor Dave Augustyn did not attend the meeting.

The committee heard two presentations, the first from Pelham residents Nancy Beamer and Bernie Law, the second from former Town Councillor Marvin Junkin. Junkin resigned his seat on November 6, alleging that Council had been made aware of the Town’s dire financial situation and decided to keep this information secret. His allegations were largely confirmed by KPMG’s December reports.

On Monday, Junkin said that he was present before the Audit Committee to dispel any ideas that he is confused.

“In a perfect world, I wouldn’t be here,” began Junkin, before expressing his disappointment that Mayor Augustyn and Pelham Town Council continued to assert that all is well.

“KPMG confirmed that Town cash reserves had been depleted, that the Town was basically broke,” said Junkin.

“In her presentation [at E.L. Crossley], the Treasurer pointed out that the Town is not legally required to keep cash balances on hand. She said, basically, ‘Though we are broke, we have the legal right to do it this way.’ It didn’t make people feel any better.”

Junkin said that the most damning aspect of KPMG’s reports is the Town’s financial scorecard.

“If you’re running the Town the way it should be run, you should have six [low risk scores] in a row,” said Junkin. “If you ended up with two moderates, then that would be enough to instigate an investigation from the province. Pelham ended up with two moderates and a high. Yet the Mayor tells us that the Town’s finances are in good hands.”

Junkin also spoke about the implications of the Town’s financial position.

“Two roads in town are currently closed due to infrastructure failure,” he said, referring to Poth Street and Sulphur Springs Drive.

“If Poth Street is fixed in 2019, it will have been closed for two and half years. Sulphur Springs has been deferred to 2020—if it’s fixed then, it will have been closed for four years because there’s no infrastructure money to fix it. These are public roads.”

Barrick asked Junkin why he thought that the Town had continued to refuse to release a copy of the KMPG report presented to Council during a closed-door meeting on September 5.

“[For] the same reason that we talked about Town finances in camera,” answered Junkin. “They’re probably embarrassed.”

The Voice has filed an appeal with the province against the Town’s decision not to release this report through a Freedom of Information and Protection of Privacy Act request.

Councillor Bob Gale asked Junkin why he thought that other Pelham councillors had not been supportive of him. Junkin replied that he had not spoken with any members of Council since his resignation, but said that he had brought the matter up beforehand.

“I said, ‘Guys, this isn’t right.’ One of them said, ‘We’d like to do the right thing, but it’ll make the Community Centre look bad.’ Another Councillor said that if we dug too deep, we’d find even more problems. He wanted the next Council to deal with it. Obviously, I couldn’t live with that.”

Nancy Beamer, representing the Pelham DEBT advocacy group, expressed her displeasure that Pelham Council is refusing to answer further questions about its finances.

“Council broke their promise and deemed a second meeting unnecessary,” she said.

Though Beamer said that representatives from Pelham DEBT had met with Town staff last Friday, she said that this meeting had not answered all of their questions.

According to Beamer, Mayor Augustyn agreed to attend the meeting, but did not show up, claiming a last-minute engagement of greater priority. (Based on posts made to his Facebook page, it appears that Augustyn instead met with Niagara Centre MP Vance Badawey, who has praised Augustyn as a “politician of great integrity.”)

Beamer listed several questions that she said remain unanswered.

“There have been innuendos that there something else going on,” said Beamer, apparently referring to Augustyn’s cryptic comments before Town Council on December 18. She disputed this.

“We are not into politics,” she said. “We are into truth.”

(Augustyn has repeatedly declined opportunities to explain his remarks before Council.)

After the meeting, many Pelham residents who had been in attendance stood in the lobby discussing the results. Former Councillor Sharon Cook praised the move to involve the OMB, saying that it’s “starting to make headway” into providing a full picture of the Town’s finances.

Responding by email late Monday afternoon, Mayor Augustyn declined to comment specifically on the call for an OMB investigation, saying, “Instead of bickering and bullying, people are looking for political leaders to work together and support each other for the benefit of the entire Niagara Peninsula.”

Marvin Junkin, who was repeatedly applauded by the gallery during his presentation, said that he was pleased with the motion.

“I’m still hoping that someone, at some level of government, will take a proper look at the finances of the Town,” he said, adding that he hoped that someone inside Town Hall would eventually take responsibility for the situation.

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