Effort being made to reverse damage done to Pelham
Damage may have already been done to Town of Pelham’s reputation.
But Niagara- on- the- Lake Coun. Gary Burroughs hopes to take immediate action to mitigate any harm that may have occurred as a result of accusations levelled against the town about its finances.
“There’s nothing worse than suggesting that there is a problem, if in fact there isn’t a problem,” Burroughs said.
He was referring to a Nov. 16 resolution from regional council which included several actions regarding allegations about the management of Pelham’s finances — actions that included instructing Niagara Region staff to notify Pelham’s lenders about the allegations.
Although a report from KPMG auditors was presented at a special Pelham council meeting Wednesday night that showed the allegations against the town were false, by that time regional staff had already sent letters to lenders.
The Region’s resolution, first approved by the audit committee on Nov. 14, was based on allegations from former Ward 1 town councillor Marvin Junkin, who sent an email to budget committee chair Tony Quirk on Nov. 12, claiming Pelham had $ 17 million of debt that was not disclosed in town financial statements.
Junkin confirmed to The Standard earlier this week he had no evidence to support his claims.
And Wednesday, Karen Grogan, a partner at KPMG, told a crowd of more than 200 people during the special town council meeting that although council approved borrowing the money, the town never actually took out the loan.
“So there was no debt related to the $ 17 million,” she said during the meeting.
Burroughs, an accountant, said he has no doubt KPMG’s findings are accurate.
“They take a lot of due diligence on any job, but certainly on ones that become controversial,” he said.
But prior to that information being released at the meeting, regional clerk Frank Fabiano sent a memorandum to regional councillors on Wednesday confirming that the lenders had been notified about the allegations. Fabiano’s memorandum, a copy of which was obtained by The Standard, also informed councillors that a copy of a Sept. 5 KPMG report had been requested by the Region, while staff had also begun writing a report on ways to strengthen regional review of municipal debenture requests for 2018, and had sent correspondence regarding the Region’s resolution to local municipalities, MPPs and the Ontario Ombudsman and auditor general.
Burroughs responded to Fabiano’s memorandum with an email calling for a special audit committee meeting hoping to “start to reverse the damage that has been done.”
That meeting, Burroughs added, should also include “the accountants that were involved, as their reputation has been brought into question.”
Pelham Mayor Dave Augustyn said he warned councillors that the town would hold the Region responsible for any damages that result from its actions, before the resolution was approved.
“The Region jumped the gun and acted on garbled, confused and inaccurate information. As we found out ( Wednesday) night, that’s true unfortunately. We’ll have to see what the ramifications are,” he said.
Augustyn hopes creditors would require more than an unconfirmed report before making any decisions regarding the allegations.
“If I was a creditor, I’d kind of look for proof,” he said. “Now we have the proof. We’ll send all this information along to the various creditors, I’m sure.”
He said the Region’s resolution will be on Pelham town council’s agenda for Monday night, “and we’ll see what council says.”
Burroughs said the Region should take action as quickly as possible to address concerns.
“We need to now react,” he said. “I would hate for all our small communities from Wainfleet on up that borrow money to suddenly have the audit committee at the Region analyzing whether they’re honest or not … By us deciding we’re going to take more steps than that, I think is beyond our reach.”
The Region, he added, should react quickly, and not leave it up in the air.
“It’s not up to me to determine what the reaction should be, but it should be swift.”
Although Quirk agreed with Burroughs about the need for a special audit committee meeting, he said the report from Wednesday’s meeting “opened up more questions and more concerns and it’s actually more alarming.”
He also questioned the information presented during Wednesday night’s meeting.
“We have to have a long look at where our next steps are with this,” said Quirk. “There’s nothing I saw ( Wednesday) night that vindicates the town as far as I’m concerned.”
Pelham Ward 2 Coun. Catherine King, however, feels vindicated.
“All along I believed we had not done anything wrong, but when you have all this negativity that goes on and on for such a long period of time, you begin to doubt yourself. I was very pleased to have the reports presented, both from KPMG and the town treasurer ( Teresa Quinlin) to learn that everything we thought we were doing, we were on track with,” she said.
Ward 3 Coun. John Durley, too, feels vindicated by the presentation, but he, too, understands that it won’t convince everyone.
“To be honest, I don’t think anything will help some people who are so narrow- minded that they’re not