Despite previously refusing money, Council mulls reimbursement request
BY VOICE STAFF
At the end of its meeting last Monday, Council discussed billing the Region of Niagara for costs incurred by the Town as a result, in its view, of motions made by Regional Council.
The approach was recommended by CAO Darren Ottaway, and includes $117,000 paid to KPMG, as well as funds spent on lawyers, all totalling some $160,000.
Councillor Richard Rybiak spearheaded the motion.
“I think that the entire episode was completely unnecessary. It was unnecessary because when information or complaints were made to Region was that it should have been directly back here,” said Rybiak. “There was no basis that any response made by the Town of Pelham would be anything but accurate… We’re not going to get back the sleepless nights, get back the arguments, get back the stress. The only thing we can get back is the money. We should make the attempt to recover it.”
Mayor Dave Augustyn supported Rybiak’s motion, and said that he’d “be interested to know what the community thinks. I think people will go crazy [and say], ‘What are we doing paying all this.’ I want to hear from the public. I want to hear from people. We heard from the people on the other side, and we reacted.”
Council voted to ask staff to factor-in the cost of staff time to the $160,000 figure, and return with an updated number.
But notable was what Council did not discuss when it considered sending a bill to the Region.
As a result of KPMG’s investigation, it was found that the Town overpaid the Allen Group by $32,500, money that the developer then agreed to repay to the Town.
KPMG also found another error in which the Allen Group owed money to the Town. KPMG wrote, “We understand it could be in excess of $50,000.”
Town Public Relations and Marketing Specialist Marc MacDonald said last week that a meeting with the Allen Group will soon be held to determine the final amount.
“The Town should be embarrassed that KPMG found that it lost out $83,000,” said an accountancy expert consulted by the Voice, whose name the paper has agreed to withhold.
Last September, real estate developer Rainer Hummel, who first raised questions about the Town’s land deal with the Allen Group that was the focus of the audit, offered the Town $50,000 to pay for it. Hummel made a cheque out to the Region and took it to a meeting of the Audit Committee.
“I am willing to pay the $50,000-dollar estimated cost of a forensic audit from my own pocket, so not to further burden the ratepayers of Pelham,” wrote Hummel in an op-ed in the Voice.
“I ask that the terms of reference be dictated by the Region and that the Region choose a non-partisan, independent, forensic auditor to review the issues presented at Regional council with respect to land transactions and actions taken by the Town of Pelham on behalf of its taxpayers in the East Fonthill secondary plan.”
Council rejected Hummel’s offer to pay for the audit. Mayor Dave Augustyn asserted at the time that it was an instance of a wealthy individual using money to buy influence.
Members of the advocacy group DEBT, made up of Pelham residents, also offered to contribute to the cost of the audit.
The accountancy expert consulted by the Voice said that the fact that the Town rejected money for the audit before it was commissioned, only to ask for it after, indicates that the Town wanted to ensure that only it could control the terms of reference for the audit.
“For starters, the Region would have insisted that KPMG talk to lawyers other than the Town’s own,” said the expert. “And then KPMG could have gotten a second opinion on whether it was appropriate for the Town to create an offsetting accounts receivable for the money spent on the land.”
