Motion to defer matter to Audit Committee ends debate
BY VOICE STAFF
Niagara’s Regional Council chamber was abuzz with a much larger crowd than usual last Thursday evening, with some two dozen or so residents of Pelham in attendance hoping to attain a clearer understanding of the state of the Town’s finances.
The public’s concerns were sparked when Port Colborne Regional Councillor David Barrick put forth a motion calling on the Region to investigate the Town’s financial state of affairs. Inbetween representing his own constituents, working full-time as director of corporate services at the Niagara Peninsula Conservation Authority (NPCA) and serving as the Chair of the Region’s Budget Committee, Barrick says that he has uncovered an unusual and excessive debt load on the municipality, which he asserts could have dire consequences for the Niagara Region.
“I do make this motion as the chair of the Region’s budget committee as well as the chair of corporate services,” said Barrick.
“It is consistent with my campaign commitment to keep property taxes low and it is consistent with previous resolutions that I have brought here respectively with taxation. This motion is an opportunity to provide clarity to residents, many of whom are here this evening, and to have a plan to have financial sustainability, so as not to impact everyone else in the region.”
The motion painted a grim picture of the future for taxpayers in Pelham and throughout the region, implying that the debt incurred through the new Pelham Community Centre along with other municipal developments has overloaded the Town and potentiall the Region with debt. It also called on Mayor Dave Augustyn and Council to exercise greater transparency regarding its finances.
“Part of my goal is to ensure that doesn’t have a broader impact on the rest of the region,” said Barrick.
“It’s public money, so it should be open and transparent. If you look at the annual repayment limit—no one else will have a higher annual repayment limit. That’s part of the issue — to be clear on what the true level of debt is. When you talk about the development charge credit, is that part of their overall debt or encumbrance?”
Despite allegations by Augustyn and others that political motivations were behind his motion, Barrick maintains that the resolution arose from his concern for taxpayers in Pelham and Niagara.
“Any mention of any other issue not related to this is a cheap excuse and a deflection about the issue,” said Barrick.
“This matter is not about me. What’s before us in this resolution is not my information, it’s all the Town’s information. I would highlight that there is reference in here that some information in the body of the motion is wrong, and I would clarify that it is not wrong, it’s different.”
“Yeah, alternative facts,” mumbled one of the other councillors loudly enough to be heard in the gallery.
Once Barrick had read through the lengthy motion (which ran in its entirety in last week’s Voice), Grimsby’s Regional Councillor Tony Quirk spoke in support of Barrick’s motion. Alluding to the 330-page report provided by the Town of Pelham to respond to each of the allegations in the motion he said, “I do reference that sometimes in a lawsuit when you are trying to hide something you do a data dump.” Calling some of the numbers in the report “quite worrisome,” Quirk highlighted several of his concerns.
“I’m concerned about some of the other things that have come forward as part of this because maybe if the financial statements don’t tell the whole picture that is a concern,” he said.
“But I also look at [how much] the projected repayments were going to be before Pelham jumped on the debt rollercoaster. They basically were planning to spend $592,000 in 2016 to repay debt, now late in 2016 they were scheduled to spend $1 million. So, that extra debt has almost doubled their principal requirements.”
Declaring that he appreciated all the information provided in the Town of Pelham’s report, Quirk said that it wasn’t fair to the residents of Pelham and taxpayers in Niagara for Council to make a decision without having a chance to “take a deeper dive into it.” Asserting that the auditor’s management response letter was not part of Pelham’s information package, Quirk suggested that Council have a policy-related conversation to determine which forms and documentation should be provided by municipalities before the Region issues more debt on behalf of local municipalities.
“As audit chair of the NPCA I made sure that that letter was released to this Council to read what the auditor was saying and it has been thrown back in our face multiple times,” said Quirk. “Because although we are making strides to reduce those deficiencies that’s not good enough, and never is good enough. But at least that letter is out there in the open. Unfortunately, that letter isn’t provided, or required to be provided by local municipalities.”
Later, Augustyn indicated that the reason this letter was not included in the package was that the auditor did not issue a letter voicing any concerns.
Regional Councillor Selina Volpatti tabled another motion, referring any further discussion regarding the matter until the Audit Committee’s next meeting on June 12. Passing by a vote of 16 to 12, Augustyn was prevented from responding to the accusations asserted by Quirk and in Barrick’s motion when regional councillor.
Augustyn expressed his disappointment after the meeting with not being allowed to speak to the allegations against the Town.
“Democracy is an informed debate and an informed discussion,” he said.
“All we had at Regional Council the other night was one-sided accusations. We had all the information needed to refute every one of their claims and they wouldn’t let that occur. It’s very sad.”
Augustyn says that Barrick’s motion was intentionally misleading to the public because it misrepresented the Town’s financial position. He also believes it may in part be Barrick’s way of striking back in response to comments made by the Mayor in the Voice questioning the hiring practices of the NPCA, namely that Barrick left his position on the NPCA’s board to take on the role of the organization’s Director of Corporate Services.
Whether Barrick’s motion was related to the Mayor’s outspokenness regarding the many issues plaguing the NPCA, Augustyn said the Town decided to respond directly to his allegations by issuing the detailed report presented to Regional Council. Asserting that the report answers concerns raised in the motion, he said he expects the NPCA to follow the same process.
“Many municipalities across Niagara have asked the NPCA to be open, to give out information and to answer the allegations and they should do so,” he said.
“It was alleged that there was something wrong with the Town’s finances and we’ve came out and showed very clearly that’s not the case. Similarly, those who are making accusations should have the basis on which they are doing so. The Ed Smith document is the basis for those accusations causing concern and everybody is waiting for the NPCA to answer those allegations. Instead they’ve reacted by suing Mr. Smith for putting out very detailed accusations about them and have still failed to answer them.”
Pointing out that the region’s acceptable debt to operating revenue is 85 percent in 2019, Augustyn said Town staff were informed by their auditor that this number would have to climb to 120 percent for the Region’s credit rating to be threatened. Crunching the numbers himself, Augustyn said that even under the worst-case scenario, Pelham’s debt could in no way force the Region into this credit danger zone.
“They’re alleging that to change the credit rating you would need another $282 million added to the Region’s debt load,” he said.
“For Barrick to stand up publicly and say that if there is a problem in Pelham it may cause a problem with the Region’s credit rating is categorically false and fear-mongering. The clear thing is, is that we do our homework, we provide the information. Before I stand up at Regional Council I make sure I am well-researched and I expect others to do the same. In this case, it’s clear that these are simply allegations.”
Councillor Tony Quirk expressed his continued concerns about Pelham’s books on Monday just before press time.
“I spent the weekend going through the Pelham submission [responding to Barrick’s motion], he said.
“The actual financial numbers are what they are, but there appears to be some information withheld about the land deal and some inconsistencies between what as said and the documents provided.”
Quirk’s comments and the Town’s response will run in our next issue.