On Monday afternoon, November 6, 2017, about three hours before Councillor Marvin Junkin resigned from Pelham Town Council, the Voice invited Mayor David Augustyn to an interview at Peter Piper’s restaurant in Fonthill.
Present were the Mayor, reporter Sam Piccolo, and editor Dave Burket.
The paper wanted to give the Mayor an opportunity to confirm or deny what it had learned from Councillor Junkin about the purported state of Pelham’s finances, based on audit results Junkin asserted were given to Council by KPMG behind closed doors two months earlier, on September 5, 2017.
The Mayor was unaware that Junkin planned to resign that evening, or that an article detailing Junkin’s allegations was set to run in the next edition of the Voice.
In late November 2017, responding to Voice coverage of Town Council’s special meeting at E. L. Crossley, the Mayor requested that the paper “correct” our wording of his assertion, made in the following interview, that he was unaware that the Town’s reserve funds had been virtually depleted by “internal borrowing.”
Junkin had told the paper that KPMG made this fact explicitly clear to Council on September 5. Junkin further alleged that Council then passed a resolution authorizing the Town to obtain an $8 million dollar bank loan to cover immediate cash needs.
The following is a verbatim transcript of the Piper’s interview relating to the reserve funds, and to Pelham’s total debt. We invite readers to reach their own conclusions as to the meaning of the Mayor’s words.
BURKET: You and staff—or, let’s say, Council and staff, but you in particular—work closely enough with staff that you would be apprised, pretty much right away, if there were any significant differences in the Town’s financial situation compared to what had been publicly announced in previous periods.
So you’re saying the Town’s finances are absolutely fine, that they—
Well, they’ve been, they’ve been reported publicly, so, I, have. You know. I don’t. You’re saying that, you’re wondering if there’s other public reports, or you’re wondering if they’re different than what was published. No. There’s public reports that were published, and they were audited, and a third party, and, and 2017 will be audited.
I don’t know what you’re getting at. You’re kind of circling around with your question.
No, I’m just asking if they’re accurate, if the numbers are accurate.
I have no reason to believe that they are not accurate.
So, for example, the Reserve Funds, 2016, the end of the calendar year 2016, $5.8 million and change, those funds were actually in the Reserve accounts at the end of the year.
That’s what the auditor tells us, that those are the reserves, reserves and reserve funds. Those were audited and we were told this by an auditor.
So you have no reason to doubt the accuracy of that audited statement. It’s clear these are audited statements. I’m not asking if they’re audited. I’m asking if they’re accurate.
Council…when the auditor presents to us we ask questions, we review the audit, we do all those things. So…
So you’re saying that you’ve not received any information in the interim to suggest that there’s anything incorrect about this number.
These are the audited financial statements. They are truthful and audited and we have—you’re missing pages here where the auditor says where, that these are, to their, the best of their knowledge, all the audited financial statements and they match what information Council received. So Council will be—another one I remembered—Council, as we work our way through the budget, we will be looking at, you know, we approve, in the 2016 budget, for instance, the reserve balances, we look at the balances as we go forward, for the different accounts, so we look at those, those types of things.
At the risk of being too persistent, could I get a yes-or-no answer? Do you have any reason to believe that this number is not correct?
I have no reason to believe that number is not correct.
Okay. Total debt, at the end of 2016. $13 million and change. Again, any reason to doubt the accuracy of that statement? We realize it’s audited, we realize it’s been presented to Council—
Same answer. No, there’s no reason. It’s been audited. The auditor’s gone through it.
If you have a problem with the audit, you should call Deloitte.
Right. So you’ve received no information in the interim that suggests that any of these numbers are not accurate.
This is accurate as of December 31st, 2016.
Right. And you’ve received no information after that time—
Well, okay. Specifically for this, again, I don’t know what you’re getting at, I don’t know what context you’re doing. I mean, you’re just asking these—
It’s not a difficult question to answer.
No, but. Okay, so I’m going to expand on it, because it’s not black-and-white. Because, for instance, we took an additional debenture, which was well publicized, you guys covered it in your paper in June, June, July of this year.
So you would have to add that to that. And that report, from July or June, or whatever it is, does say how much the, what the debt is for the Town. And then those will be audited in the 2017 audit. And there was another report that came in, October of 2017, at the Region, because there were additional draws that people took. Port Colborne added debt to their—I think I wrote to you about that—Port Colborne added debt to their, what they were doing for their Operations Centre. And West Lincoln added $21 million dollars….so those are in those reports. And you’ll see the number in there for 2017, so you’re asking has, has this changed. Yes, yes it has, because the year progresses and we took another draw on the—
I think we’re wandering way farther afield than my question. My question was related just simply to Pelham’s financial statements, and the Consolidated Debt amount at the end of 2016.
This has nothing to do with Port Colborne, or West Lincoln, or the Region even. It has to do with whether or not this number is correct.
That number is accurate to what the audited financial statements say to December 31st 2016.
Right. We understand that’s what the statements say. Is the number, in fact, correct, in light of any subsequent information you may have received since the audited statements were provided to you?
No. I think. Yes, it’s correct. I don’t know how to answer it, because you’ve confused me on these yes-and-no questions.
It’s very easy….
There’s a good quote. “You’ve confused me on these yes-and-no questions.” Is it, is it correct? It’s correct as it’s stated there on the 31st, 2016.
Absolutely no reason for you to doubt that this is—
—forever and ever will be truly the picture of the Town’s financial health on December 31st, 2016.
Updated to correct the time interval between the interview and Councillor Junkin’s resignation: It was approximately 3 hours rather than 5 hours. Also lightly edited to remove pauses in the Mayor’s responses.