Tuesday, November 7, 2017

Regarding a Council Resignation and Alleged Disclosure of Legal Information

It is disappointing that Mr. Junkin resigned his Council seat yesterday and gave up the privilege of serving the community.

It has now come to light that while he was still a Councillor, Mr. Junkin allegedly disclosed legal information from a Town Council closed session meeting regarding ongoing litigation.

Since Council is required by law to keep any and all information pertaining to that in camera meeting strictly confidential, neither I nor other Councillors, nor Staff can legally respond to the allegations made by the former Councillor, without potentially facing criminal or quasi-criminal charges.

Mr. Junkin made many allegations to a local newspaper and I very much look forward to correcting the inaccuracies as soon as legally possible.

Regrettably, his obvious political action of allegedly disclosing confidential information could have significant financial costs for the Town and our taxpayers.

Accurate information about Pelham’s financial position was always to be considered publicly later this Fall as part of the Town’s 2018 Budget deliberations, and we will follow through with that plan. Further information will also be considered as part of the KPMG audit of the Parkland Over-Dedication Agreement later this month.

Finally, Council will declare the Ward One seat vacant at our next regular meeting on November 20. After that, Council will consider options to fill the seat, which include holding a by-election or appointing a qualified citizen to represent his or her peers.

Sincerely yours,
Mayor Dave Augustyn

UPDATE: November 10, 2017.

Pelham is vibrant, innovative, and caring. We are a Town that wins awards for our festivals, playgrounds, and plans. We’re bike-friendly, walkable, and seniors-friendly. We have vibrant downtowns and dedicated volunteers. We’re the new home for the Wellspring Niagara Cancer Centre and are now building a new Community Centre on time and on budget.

With characteristics like these, it’s no surprise that more people want to live here and more businesses want to open here. Our Town is flourishing.

Yet, managing growth and all that goes with it can be challenging, and change can be difficult for some people.

Recently, a former Councillor very publicly discussed subjects from a closed session of Council. Some residents are now asking questions about that closed session.

Part of the oath we take when elected into office actually prohibits us from disclosing any information about those “in camera” meetings. The closed session rules and the oath allow Council to discuss land, legal and labour issues. Ultimately these rules are intended to protect residents and taxpayers. As a result, neither I, nor Councillors, nor Staff can legally respond to the allegations or questions. Doing so could risk a lawsuit against the Town, result in criminal charges, and impact our finances.

That’s why I have called a special Council meeting on Wednesday, November 15 to consider the breach of confidentiality of the resigned and former member of Council.

We also recognize it is important for residents to have accurate information about Pelham’s finances and Staff work hard on that. It has always been slated to be part of the Town’s 2018 Budget deliberations.

In order to ease any concerns, therefore, I have called a special meeting of Council on Wednesday, November 29 to receive KPMG’s external audit, and to hear from the Town’s new Treasurer about the financial plan moving forward.

As Pelham continues to grow and flourish, Councillors and I are more committed than ever to respect our responsibilities, keep working hard to manage growth and the Town’s finances, and work together with you to improve our community.

UPDATE: November 21, 2017.

Council Clarifies September 5 KPMG Report
Calls for KPMG to include financial update in November 29 Audit Presentation

Amidst rumours and allegations, Pelham Town Council clarified the scope and scale of a KPMG Report that was presented to Council on September 5, 2017.

Passing a motion – with unanimous support – at the regularly scheduled meeting on November 20, Council addressed the allegations by a former Councillor, including the alleged secrecy of a “forensic audit” conducted without Council knowledge.

The Council motion clarified that a “forensic audit,” referred to and debated in various venues, was in fact a privileged report commissioned by the Town’s lawyers, prepared by KPMG in the context of litigation threatened by an identifiable individual, and presented during a closed meeting of council on September 5.

Through the motion, Pelham Council stated their desire to clear up misconceptions that have been lingering in the community since early November.

“Council hopes to alleviate the public’s concerns and to correct the record by asking KPMG to share all financial findings and conclusions as set out in the Report,” said Mayor Dave Augustyn. “Council is also asking KPMG to provide pertinent updates as part of their public presentation on November 29.”

Understanding the oath of office they took when elected requires strict adherence, Council sought legal advice to determine what information could and could not be shared with the public. Releasing the Report, in full, from September 5 could be a violation of the Municipal Freedom of Information Act, as it contains personal information of an identifiable individual.

The Town’s audited financial statements have been deemed accurate by Deloitte and can be found on the Town’s website.

The full motion reads:

WHEREAS former Town Councillor Marvin Junkin has allegedly stated to the Voice of Pelham and has alleged in an e-mail to Regional Councillor Tony Quirk dated November 12, 2017 that the Town has an additional $17,000,000.00 in debt and total debt of $59,000,000.00, that Mr. Junkin states is not disclosed on the Town’s annual audited financial statements;

AND WHEREAS Deloitte has assured the Town that the Town’s annual audited financial statements are accurate;

AND WHEREAS Mr. Junkin has inaccurately stated in an e-mail to Regional Councillor Tony Quirk dated November 12, 2017 that the Town caused a complete forensic audit to be conducted by KPMG and that the findings of such alleged complete forensic audit was presented during a closed meeting of Council on September 5, 2017;

AND WHEREAS a privileged report was commissioned by the Town’s lawyers and prepared by KPMG in the context of litigation threatened by an identifiable individual, which was presented during a closed meeting of Council on September 5, 2017 (the “Report”);

AND WHEREAS Mr. Junkin breached his oath of office by disclosing the existence of the Report;

AND WHEREAS the Town maintains its rights to litigation privilege over the Report;

AND WHEREAS some members of the community and some Regional Councillors have called for release of what they refer to as the KMPG forensic audit, but what is, in fact, the Report, as a result of the disseminated false information relating to an allegation of an additional $17,000,000.00 of debt and total debt of $59,000,000.00;

AND WHEREAS the release of the Report could be a violation of the Municipal Freedom of Information Act, as it contains personal information of an identifiable individual;

AND WHEREAS Council is desirous of clearing up the misconception and allegations of Mr. Junkin and maintaining an accurate record of the finances of the Town.


The Town hereby directs the CAO to request that KPMG include in the forensic audit to be presented to Town Council on November 29, 2017, as permitted by its professional standards and reporting requirements, all of its financial findings and conclusions as set out in the Report, together with pertinent updates, with all personal information about an identifiable individual, information relating to employee negotiations, and advice that is subject to solicitor-client privilege removed.

Update: December 1, 2017 from Town of Pelham website:

Hearing a report from KPMG on Nov. 29, facts presented to Council and the public provided a clear and accurate picture of the alleged misconduct related to parkland over-dedication and Town finances.

KPGM also confirmed that there is no unreported debt, the Town is within its debt repayment limit (even when including approved but not yet debentured debt of $9.9 million), and that no financial statements have been misstated.

"The dark cloud of several allegations hanging over Pelham has been lifted and proven untrue," said Mayor Dave Augustyn. "As the Town continues to experience prosperity and growth Town Council is committed to investing in smart growth and providing an enhanced and improved quality of life for all Pelham residents."

To review the presentations from Nov. 29, 2017, please view the documents below:

KPMG Presentation - November 29, 2017 

Treasurer Presentation - November 29, 2017