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EDITORIAL: Apology first, access to cash second

T his Thursday evening the Town of Pelham will send its lawyer to Regional Council in an effort to gain access to $13.5 million dollars in short-term loans, money needed to finish construction of the new community centre.
Aerial view of the community centre construction site, March 2 2018. HOO-AHH DRONE PHOTO
 

This Thursday evening the Town of Pelham will send its lawyer to Regional Council in an effort to gain access to $13.5 million dollars in short-term loans, money needed to finish construction of the new community centre.

The loans were approved in 2016. However, as increasing scrutiny was brought to bear on Pelham’s financial condition and mismanagement last autumn, the Region placed further distribution of the loan funds on hold. Before releasing them, the Region has asked that certain financial questions relating to the Town’s adventures in East Fonthill be answered.

To date, those answers remain missing in action.

Now the Minister of Municipal Affairs is considering opening its own investigation into Pelham’s finances, an investigation called for by some 200 residents who petitioned for it, an effort also supported by Regional Council.

The fact is that despite the Town’s silence, we actually do know more—much more—about Pelham’s financial situation now than Regional Council knew in 2016, when it effectively rubber-stamped the Town’s loan application based on what turned out to be misleading statements.

We know now that the Town did not disclose that its reserves had largely been spent—that the numbers on paper were merely decorative.

We now know that Pelham’s own councillors were not fully aware of this so-called “internal borrowing,” though the Mayor, CAO, and Treasurer almost surely were.

We now know that the Town failed to disclose provincial warnings about its financial condition—socked in 2015 with five “moderate” indicators, and two “high” indicators of financial challenge.

Other revelations since 2016 include a dubious land-for-credits scheme in East Fonthill. We still don’t know whether the scheme was legal, much less why the Town would agree to a deal that so blatantly enriched a single developer.

All of this is to say is that plenty of reason remains on Thursday for Regional Council to think twice about releasing any more funds to those in charge of Pelham’s purse.

But as the Town’s lawyer argued in a letter to the Region last week, blocking receipt of the cash “will cause financial damage to the Town.”

The lawyer is not wrong. Blocking it will also cause damage to the townspeople.

We’ve already seen it. As the Town has poured millions into its East Fonthill legacy project, any number of infrastructure repairs have gone undone, capital projects deferred. The Town is now effectively broke.

The problem is that Pelham Town Hall wants the reconciliation without the truth.

The truth is that the Town misled the Region—and misled Pelham residents—when it applied for the community centre loan two years ago. The truth is that the community centre was a far more risky project than Town Hall ever let on. That said, it’s too late now. We’re stuck with it, and with the bills that must be paid to finish it (and later to run it).

This doesn’t mean that the Region should again rubber-stamp Pelham’s request. Pelham residents, and Niagara residents, need someone inside Town Hall finally to take responsibility for the deception, someone to admit that mistakes were made and then covered up—a cover-up sufficiently unethical to prompt a Councillor to resign his seat in disgust.

Pelham residents and the Region both deserve an apology. If the Town wants its cash, Mayor Augustyn must rise before Regional Council on Thursday, demonstrate that he has the moral courage to admit when he is wrong, and apologize.

Only then should the Region agree to turn on the tap.