COMMENT: He said, she said: A blow-by-blow of the Rossland Arena Scandal townhall meeting on Jan. 3
By Andrew Bennett
The Seniors’ Hall fire code was likely violated as more than 70 Rosslanders packed into its conference room on Jan. 3—along with reporters from CBC news and Mountain FM—to get answers from Mayor Granstrom regarding ethical breaches to city policy and an employee’s contract during major renovations to the arena.
Former building inspector Jason Ward was the project manager for the renovations, but chose to violate his contract by awarding his own company about $185,000 in untendered contracts. This also violated the city’s purchasing policy. The extent to which Ward’s supervisor, former CAO Victor Kumar, was aware of his employee’s actions is not known.
In particular, Kumar’s position is critical because of the so-called “Delegation Bylaw” (Bylaw No. 2473) that was instituted in 2009 to confer onto the CAO “all of the powers, duties and functions of council.”
Ward resigned in September, 2011, “for personal reasons.” Kumar resigned earlier this year, also for “personal reasons,” replaced at his suggestion—and without an open job competition—by current CAO/CFO Cecile Arnott.
The Jan. 3 meeting was organized by resident Les Anderson and mediated by former mayor Bill Profili. Besides Mayor Greg Granstrom, Coun. Kathy Moore was present. Coun. Jody Blomme and Coun. Kathy Wallace attended roughly the first half of the meeting. CAO/CFO Cecile Arnott was not present.
Rossland Telegraph—Note to readers
Below I’ve transcribed the hour-and-a-half meeting in detail to allow residents to determine for themselves the content of the meeting.
[Note: The full audio is now available at the end of the article.]
You will read several comments that require greater clarification. Among them, however, are statements by Mayor Greg Granstrom that “there was much council discussion on the issue,” and “all the records are public; the whole thing is public.”
In December, we reported that these ethical issues were “swept under the rug.” If council discussed the issues, it was never in public. To date, the only declassified in camera material is Coun. Kathy Moore’s complaint to the auditor and his reply—public documents that remained classified until Laurie Charlton and myself individually appealed to the FOI (Freedom of Information) commissioner who then, just last month, finally convinced the city that the records were public domain.
These declassified letters are the only confirmation of council discussion on the topic, and this occurred about ten months after Ward resigned. Below, you can read the dialogue between Moore and Granstrom in which she asks why it was hidden from her and other councillors from the beginning.
The letters confirm that Coun. Moore’s attempts to get the topic on the agenda were stymied by the CAO and mayor, that she had to press to get the topic more directly audited at a basic level.
Council must have decided not to conduct a forensic audit, but these minutes remain classified too. Even if the minutes were made available, other in camera minutes declassified in the past have no record of the actual debate that took place so, beyond establishing a date, their utility will be limited.
Les Anderson—Introduction
Anderson said, “There’s a misconception that I talked the mayor into this meeting, which is not true. Mayor Granstrom phoned me last week and discussed a comment I had posted in the [Rossland Telegraph]. We discussed that maybe it’s time to answer some of these questions in front of the citizens of Rossland. I don’t want you to think he was corralled into this by force.”
Anderson introduced Bill Profili, a city councillor for 12 years and mayor for 20 years. “We picked Bill because he knows and understands the bylaws and how a municipal government works. I can’t think of a better moderator.”
Bill Profili—Limited disclosure
Profili began, “The one thing the mayor cannot discuss is the actual [legal] ramifications for labour. The mayor can’t be expected to disclose things that were in camera on labour relations.”
Leigh Harrison, a lawyer and Rossland resident, interjected, “Just a minute. Are you here as the mayor’s apologist?”
Profili said, “No, I’m not. I’m here to say don’t ask labour questions because he isn’t going to take them.”
“Well, that’s not an acceptable position,” Harrison said.
Later Harrison apologized to Profili and clarified, “I understand there may be some confidential agreements, but not everything that is done in council is confidential.”
The mayor said, “It is not possible for me to speak to individual labour issues. There are labour laws, et cetera, like that. I’d love to be able to say anything, but I cannot and I will not speak to individual labour issues.”
Mayor’s statement—Regrettable, but nothing illegal
“First of all, without a doubt, this process was regrettable in some instances. I will continue by saying that, as far as we know, there was no loss to the city. The entire process was audited very closely,” the mayor said.
“Second of all, the auditor made some recommendations to correct some procedures, and those requests have been taken care of and implemented,” he said. “I would also say, I have no knowledge of anything that is illegal.”
Elise Paré—Undefined scope, untendered work
“I’ve had a look at the budget summary from the arena project. I understand that there was $1 million or $1.2 million set aside for the arena roof project. But the tender for the roof project came in at just over $600,000. So there was money left over to do other repairs,” Elise Paré began.
“How was the scope determined for those other repairs? Was there a design put together for the scope of work for the contractors listed here as getting paid—ADA included [Ward’s company], but also several other contractors?”
“And, [because it wasn’t tendered,] how do you know the work was completed, that the city did get a good deal?”
Granstrom replied, “I can’t answer your question specifically. Part of it was not tendered, that is correct.”
Paré clarified, “The $400,000 extras? Everything aside from the roof.”
Granstrom said, “The roof was tendered. The mechanical, the painting, and one other [I do not remember.]”
Paré continued that the untendered items seem to be greater than the procurement policy (or purchasing policy) that requires at least three bids on jobs greater than $10,000, or a ‘request for proposals.’
“Those values were exceeded and those awards were put out without the proper public procurement policy,” she said.
Granstrom replied, “There were issues. When staff became aware of the issues, staff took action immediately and dealt with the situation. Did we get value for money? Yes we did.”
Paré asked, “How do you know what the scope of the project was? It was undefined.”
Granstrom said, “Repairs were made to individual things that needed repairing. That was the scope.”
Paul Picard—A very basic audit doesn’t cut it
“I thought this meeting here tonight was about one topic, but then you say you don’t have any numbers or anything about that topic. I would like to get your summary of your perception of the whole scenario first, and then we can go from there.” Paul Picard said.
Granstrom replied, “I don’t have specific numbers, my apologies. If you have a specific question, I hope I can answer it.”
“How about informing us of your perception of the situation first, and from there we go to questions.”
Granstrom said, “My perception is that it was less than perfect. I know we have no evidence of anything illegal. I know the process was audited, and audited to the nth degree, I might say, and it was determined there was no loss to the city and the work was done as per the invoices—that was all looked at by the auditor.”
Picard continued, “If there was no problem, why this meeting tonight? On the other side, I would like to bring to your attention that when you say ‘everything was audited,’ it was not a forensic audit, it was a very basic audit.”
“If we paid $100 for a pencil and $50 for an eraser,” Picard explained, “the audit would say everything is fine, so long as you have an invoice for $100 for the pencil and $50 for the eraser. To say everything was audited is stretching the scenario here. Yes there were invoices.”
Picard asked, “What are the things you would have changed?”
Bill Profili added, “…and what changes have you implemented or did council take?”
Granstrom said, “The procurement policies were looked at and it was determined that perhaps there has to be more enforcement—that’s the wrong word, more acknowledgement that those policies and procedures are followed. That was what was done.”
“As for [not doing] a forensic audit, that was a decision council made after going through the regular audit,” he continued. “For what the forensic audit could bring for what it would cost, council decided a forensic audit would not be done.”
Ken Holmes—Was Ward’s side-business known about before?
“Prior to his appointment as project manager for the arena contracts, was it known that Jason Ward owned and operated a company called Alberni Design Associates, ADA, using the city’s phone number and city’s fax number?” Ken Holmes asked.
Granstrom said, “To the best of my knowledge, no.”
“Quite frankly,” Holmes said, “I find it hard to believe that a person can operate a business using a city phone number and city fax number without anyone at city hall knowing about it.”
Leigh Harrison—Tell us what you know
“Could you tell us what you know, just what you know, about the situation? Just take us through this whole situation please, which is what our friend Mr. Picard was getting at,” Leigh Harrison asked.
Granstrom said, “ADA was doing work for the city. It was found out that an employee may have been part of ADA. When that was discovered, the city—senior staff—investigated and found that he may have been involved with the company. The next thing that happened is the building inspector resigned.”
“What happens after that,” he continued, “is there was an audit. Then it goes to council and we say, ‘Here’s what happened: we spent this much money, the auditor says the money was spent on the invoices, so where do we go from there?’”
“Do we go to a forensic audit, and spend money on that? Or do we agree that the work was done, the employee is no longer there, and we move on. Council did not deem it necessary to spend—I can’t remember the number—on a forensic audit.”
Leigh Harrison—Ward accepted the bid for himself?
Harrison followed up, “Am I to understand that [Ward] was highly involved in setting the parameters of the contract, then accepted the bid for himself to do that work?”
“And then inspected that work?” another resident added. [Laughter.]
“And then approved his invoices!” added another. [More laughter.]
Granstrom said, “He did not ‘do the work,’ per se.”
“Well, his company did, ADA,” Harrison said.
“I understand that,” Granstrom continued, “but he wasn’t doing the work.”
“With respect,” Harrison said, “A company, ADA, owned by this gentleman—it took three phone calls to find out that ADA, Alberni Design Associates, and the GST number were all him—certainly there’s no difference in the city’s mind between Jason Ward the person and a company controlled entirely by him?”
“Am I missing facts here,” he asked?
“No,” Granstrom replied. “When the city found out, we took every action we could take to resolve it.”
Leigh Harrison—Responsibility and fundamental problems with city governance
“Delegation is at the base of this. This has all been delegated down the line [from council to the former CAO.] Who is responsible for a city employee being empowered to take the bids on this, then accepting a bid for himself? There are obviously tremendous structural problems here that went unrecognized at the time.”
“I gather it’s only through Coun. [Kathy] Moore’s attention to this matter that it’s come to this stage of realization,” he added.
“There’s obviously some fundamental problems with city governance here that allowed this to happen, wouldn’t you say Mr. Mayor? I’m not getting that sense from you at the moment.”
Granstrom said, “The auditor made recommendations for the process, and we have implemented those recommendations.”
“As to why it was up to Coun. Moore to bring this forward, I don’t think it was. There were many council meetings on the subject, and congratulations to Mrs. Moore for bringing it to whomever she wanted to, but there was much council discussion on the issue.”
Kathy Williams—What took so long?
“Why did it take you so long to identify that there was an issue and then move forward? And why did it take so long to bring it to the public?” Kathy Williams asked.
“Why it took so long,” Granstrom began, “I don’t know. It was dealt with the instant it was discovered—the same day it was discovered.”
“Why it took so long to come to the public?” he continued. “Quite frankly, the whole thing is public. All the records are public. The whole thing is public.”
Kathy Williams—What about trust?
“I think a lot of people are here wondering how we can trust our city staff and city council from here on forward. Knowing that we have a new CAO, how are you going to instill confidence in the citizens of Rossland again?” she asked.
“First of all,” Granstrom said, “I’m very excited about the new CAO. She’s a wonderful lady with great experience. She brings a lot of management skills to the city. There are procedures in place that perhaps weren’t used—I don’t know if that’s the right word—but I know she will make sure that they are, and that it’s tightened up.”
“As to how I can make you confident,” he continued, “I don’t know that. All I know is that all we can do is do our best, and that’s what we try to do.“
Dave Grant—Who verified the work was done well and for a good price?
“Has there been any attempt to discover if the work matches the invoices and if you have a fair value for that work?” Dave Grant asked.
“Yes,” Granstrom replied.
“And who did that work?” Grant continued.
“Works Manager [Darrin Albo],” Granstrom replied.
“So an internal staff member. Is there a written report?” Grant asked.
“I’m not aware, but I can ask that question,” Granstrom said. “I know the work was looked at, but I don’t know that there’s a written report.“
“And [staff] felt it was fair value for money?” Grant asked.
“Yes,” Granstrom replied.
Jim Albo—The high price of flawed procedure
“I understand only from what I’ve read in the paper, but if there was a procedure in place that said contracts over a certain amount were supposed to be put out to tender and bids looked at, where is the procedure to handle this, now that procedures were not followed?” Jim Albo asked.
“Who looks after an employee such as this particular individual to make sure he is following procedures? Doesn’t city council look at contracts of that size to decide which they’re going to pick, or do they just let one individual say, ‘Fine, let’s go with this,’ and that’s it? If that’s the case, then this is what you got out of it,” Albo said.
“Furthermore,” he added. “You’ve got an electrician on staff who could have gone around to see how much work was actually involved, to know that this $185,000 in contracts was not even close to what it should have been. Are we getting bilked for our tax dollars?”
“As it turns out,” he continued, “you said you don’t think there’s anything wrong. But isn’t the fact that a city employee awards himself a contract for $185,000, or $100, isn’t that a conflict of interest? Isn’t that unethical? I’m not sure, I’m not a lawyer, but isn’t that illegal?”
“It bites my rear end, I don’t know about the other people in this room,” he said. [Laughter.]
Jim Albo—Ward and the ISL downtown renovation contract
“Furthermore,” Albo said, “I understand that this individual had something to do with the awarding of the contract for the streets. Then all of a sudden he leaves the city and becomes their project manager. Nothing wrong with this scenario?”
“For me,” he said, “the whole, damn thing stinks. And you guys [mayor and council] have to bear the responsibility for this.”
“While I’m at it,” Albo continued, “I’d like to say that [former councillor] Laurie Charlton is the one who brought forward the fact that this guy had a $6000 [city] phone bill for conducting his own business, but you guys dismissed Mr. Charlton after that. You said that Mr. Charlton was harassing staff and…”
Profili cut Albo off, to “stick to the subject at hand,” the arena project.
Albo concluded by thanking Coun. Kathy Moore and Charlton “for what they’ve done to bring this to our attention.” [applause.]
Granstrom responds to Albo
“Where do I start?” Granstrom laughed.
“Maybe an apology would be a good place,” a resident called out.
“I will say that the fact that we got value for money is fact,” Granstrom said.
“How do you know it’s fact?” Ken Holmes asked. “That’s your opinion. You don’t know that. Ask an engineer.”
Profili cut Holmes off, “We’re not going to get into open debate.”
“Why not?” Holmes asked. [Laughter.]
Profili said, “The mayor came to answer questions, not to debate with one hundred people.”
Debbie Nelson—Conflict of Interest
Debbie Nelson read out a definition for ‘conflict of interest’: “A situation where a public official’s decisions are influenced by their personal interests.”
“In your opinion,” she asked, “does the absence of an open tender, and the relationship between the building inspector and [ADA] constitute a conflict of interest?”
“And my second question, do you think a conflict of interest is a serious offence?” she asked.
Granstrom responded, “I think conflict of interest has more to do with public officials, not with employees.”
“Actually,” Nelson clarified, “Jason has a conflict of interest clause in his employment contract. Do you think it’s a serious offence to break that contract?”
Granstrom said, “I do think that it’s a serious offence to break that contract. But what I will say is that the employee resigned. What would our action be to a person that resigned?”
Debbie Nelson—What were council’s actions? What meetings?
“Well,” Nelson responded, “you said you took every action you could. What were those actions?”
“First of all, we had to investigate what was going on, obviously,” Granstrom said. “When staff found out there was a transgression, right away we looked into the legalities, all that stuff, and before anything could proceed any further, the employee resigned.”
Nelson asked, “You said you had many council meetings on the subject. If we were to look at the records, all those discussions would be part of the public record?”
“I think most of them are. I think some of them might still be in camera because it is a labour issue.”
Jan Absher—Serious internal control weaknesses missed by the auditor
“You said you implemented all the recommendations of the auditor. Could you identify those and what you did?” Jan Absher asked.
Granstrom said, “One was to maintain the paper trail on tender documents. It was not done in this instance. The other recommendations were to tighten up controls on procedure policies.”
“Could you be a little more specific,” she asked.
“In other words,” Granstrom said, “what an employee is required to do subject to letting a contract, or you know, that kind of thing. It’s in the policy manual, what an employee has to do. There were policies there that didn’t get proper attention.”
Absher continued, “I read the two letters from the auditor that I could read, and the auditor identified the lack of a paper trail as an internal control weakness. It did not identify the fact that an employee could award a contract to himself and not put it out for competitive bid as a serious internal control problem.”
“I’m an accounting professional and a former auditor in government, and I can tell you, that’s a very serious internal control problem. I have serious questions about your auditors. Are they serving you and serving us?” she asked.
Granstrom replied, “I don’t know if that’s a fair question. ‘Are they serving you’: me, do you mean?”
“Yes, the taxpayers,” Absher clarified.
“Certainly they’re serving the taxpayers,” Granstrom said.
“When they don’t identify a serious internal control problem and the fact an employee could do that?” she asked.
“They identified things we could do better,” Granstrom said, “and we’ve done that. In this instance, the fact that the employee was no longer there when that audit was done, that may be why that was left out. That’s all I can say.”
Jan Absher—Trust in council and fiduciary responsibility
“It’s still an internal control weakness when you have an employee able to do that with no-one noticing,” Absher said. It needs to be fixed. We can’t trust you if you haven’t done something to fix this problem. It needs to not happen ever again.”
“I agree,” Granstrom said.
“So what have you done?” she asked again. “A paper trail doesn’t do it. It has to be more than that.”
“You put controls in place,” he said.
“You said you [already] had policies,” she reiterated.
“If there needs to be more control, you put more in place,” Granstrom answered. “I’m not the CAO/CFO. Council has to believe that the people who are working for you are doing their best. And I know that they are.”
“So the CAO in that case was not doing his best,” Elise Paré interjected.
“You have a fiduciary responsibility to the taxpayers and the people who elected you, is that not true?” Absher continued.
“Yes,” Granstrom replied.
“Then it is your job to see that the CAO and employees of the city are doing what they’re supposed to be doing,” she said. [Applause.]
“I agree,” Granstrom said. “I agree totally.”
Lesley Beatson—We elect officials to represent us, to make sure staff are doing their job
“I’m having trouble, from your comments, identifying what you think your role is as the mayor and leader of council. It sounds like the staff is running the city on lots of levels, besides the ones we’ve talked about. I think we elect officials to represent us, to make sure staff is doing their job, so we can trust you.,” Lesley Beatson said.
“What do you think your role is?” she asked.
“I agree,” Granstrom responded. “Council is the body that sets policy. That’s what we do. We set policy and staff implement it, that’s our role.”
Reporter from Mountain FM—Gross incompetence or collusion?
“I take it from the audience here, they’re framing the issue in terms of gross incompetence. Is this a matter of—solely—incompetence: not identifying somebody who pulled the wool over the city’s eyes? Or is this more than that?” the reporter asked.
“I want a clear answer from you, Mr. Mayor, is there any collusion, in your opinion, from anybody else in city hall?” he asked. “Or is it just you guys not being able to see what was going on here? Is it collusion, or are you just incompetent? One or the other.” [Laughter and applause.]
“One step at a time,” the reporter said. “There was incompetence. Is that clear?”
“There were mistakes made. If you call that incompetent, then there was incompetence,” Granstrom said.
“Okay. Secondly, was there collusion?” the reporter asked.
“I have no knowledge of that at all,” Granstrom said.
“Do you have any suspicions?” the reporter asked.
“No,” Granstrom said.
Bob Murray—How do we move forward?
“If you did not know this employee’s connection [to ADA] prior, we don’t all have crystal balls, the question is: how do we move forward?” Bob Murray asked. “When something like this happens, we have to look at, how do we prevent this from happening again…to gain trust from the citizens?”
“I’m upset about this,” Murray said, “but I don’t think crapping on you totally, calling you incompetent necessarily, I don’t agree with that fully. But I’d like to know how we move forward and regain trust from the citizens.”
“That’s the goal for sure,” Granstrom said. “In hindsight, were there errors made? For sure. Financial damage to the city? We’re not aware of that.”
“Could we do a forensic audit and maybe proceed with charges to an individual?” he continued. “Could we have done that? Yes, we could have done that. But at the end of the day, what would be gained by doing that?
“Accountablity?” suggested Rosa Jordan.
“That’s why I’m here,” the mayor said. “That’s why I am here.”
Michelle Laurie—Trust, council, and the new CAO
“How do we trust, moving forward? The CAO in the past had quite a lot of power, and was running the city in terms of making decisions,” Michelle Laurie began.
“It seems that the new CAO has equal power, does not need to be reviewed by council, and if you did want to let her go, she’d be paid for 24 months at her $160,000 salary,” she said.
“Going back to the mayor and council, what are you guys actually able to do?” she asked.
“First off,” Granstrom said, “the power you describe, [the Delegation Bylaw,] was given to the CAO by council. It’s by bylaw. As with any bylaw, if you make a bylaw, you can change a bylaw. So if council decides that that is what we should do, then council will do that.”
“That’s a great idea!” a resident called out.
“We’ve asked, what are the measures that have been discussed, but so far nothing new has come forward. Is this something [council] are discussing? If so, the public would love to hear this,” Laurie asked.
“What I’ll say, is that’s being discussed at the staff level, but it hasn’t got to council yet.” [Laughter.]
“I hope mayor and council take these issues seriously, because from the perception of the public, those of us who do not attend council meetings and are not necessarily reading all the reports, we do entrust you, our council and mayor to make decisions on our behalf,” Laurie said.
Les Anderson—Checking contractor qualifications and validity
Les Anderson described his background working in Fort Nelson, bids made by his company, and the necessary “competence audit” of their company to “check the validity of our company insurance, GST number, provincial tax number, and were we capable of doing the work.”
“Does the city not have a competence audit on bids the size of what they were bidding out?” Anderson asked.
“An audit as to the qualifications of the contractor?” Granstrom asked.
“Yes. And we also had to sign a release to assure that we were not in a conflict of interest with any portion of the work we were doing. Does this not go on at council or at the City of Rossland?”
“Employees sign a code of ethics, which I think would cover what you’re asking. Unfortunately, it may not have been followed this time,” Granstrom said.
“For the size of contracts here, it must have been mandatory to have insurance to at least the size of the contract,” Anderson continued. He said that a competence audit would have stopped what Jason Ward did.
“That may be the case, Les, and in hindsight, maybe that’s something we need. But it didn’t happen this time.”
Vincent Joseph—Let’s investigate the facts
“Mistakes have happened,” Vincent Joseph said. “The best time to learn something or set policies is to analyze a problem right at hand. What happened? By whom? What order of mistakes? Don’t guess! Really see what’s happened here. We need some facts, some data. At the very least, there should be a resolution to get some facts.”
“What facts would you like?” Granstrom asked.
“What kind of mistakes? How [did it happen]? Half of it’s not even in council. I want to know the extent, and not just this incident. Maybe this has been going on for a long time?” Joseph asked. “You need data. From there, things can be done.”
“Not everything that was in place was followed, procedures et cetera. When that was determined, action was taken and the employee resigned. That’s fact,” Granstrom said.
Aaron Cosbey—What misconceptions? My perspective hasn’t been changed.
“I was surprised when I read in the Telegraph Les [Anderson’s] initially critical comments, which were followed by a note from Les that said, ‘I talked to the mayor, and now I see things in a different light,'” Aaron Cosbey said.
“I was hoping to come here and see things in a different light myself, but I’m wondering what it was you told Les? [Laughter.] I haven’t heard anything that changes what my perception was before I came to this meeting,” Cosbey said.
“Well, I don’t know how more straightforward I can be,” Granstrom replied.
“What did you tell Les?” Cosbey asked again. [More laughter.]
Les Anderson—What the mayor said
“There have been misconceptions about what I said in the paper [Rossland Telegraph.]” Les Anderson said. “I didn’t say he informed me of everything that I asked.”
Anderson continued, “I owned a company, I set up bylaws for provincial and national organizations. I knew some of the background as to how bylaws work in the city, and what he [the mayor] couldn’t answer. Some things you can talk about, some things you can’t.”
“But I agree with you, some of the bylaws were skipped over, or not paid attention to, or somebody wasn’t overseeing that everything was following the bylaws. That’s a shortcoming of the city that has to change,” Anderson said.
Anderson added, “Don’t forget, there are a whole string of innocent people, city employees, who have to do work as they’re told. They might not appreciate doing something they know is not right, but they’re holding their job. If you start nailing one person, what is the effect going to be on an innocent employee?”
“Did Jason Ward get a compensation package from the city?” Anderson asked.
“No,” Granstrom replied. “He resigned.”
Leigh Harrison—Council did not meet this head on.
“I don’t fault the mayor for somebody breaching their contract—I think it’s clearly illegal from their terms of contract. I don’t fault the mayor for that at all,” Leigh Harrison said.
“What does concern me, when you say ‘mistakes were made,’ were those mistakes the CAO not following procedures in terms of supervising work he had delegated to this employee?” Harrison asked. “If so, we should know that.”
“The other thing, so fundamental here: you have someone seriously breaching their contract of employment in a terrible conflict of interest, with questions of value being entirely subjective and not forensically documented. And yet, city council did not meet this head on,” Harrison said.
“I’m not sure that lesson has been learned here. You let it fester: he resigned, that’s the end of it,” Harrison said.
“With respect, because you do a difficult job for low pay, but it was so wrong for you to not meet this head on. Did you get that Mr. Mayor, that you have to deal with these things much differently, much more proactively, and much more publicly?”
“I totally agree with that,” Granstrom said.
“What about this, in terms of the CAO’s supervision? Is that where mistakes were made? Is that where our new CAO is better? Procedures were in place in terms of supervision that we weren’t following, is that something we have to do better on?”
“All of those procedures have to be looked at, certainly,” Granstrom said. “ADA was a contractor hired. We didn’t know who the board of directors were. I don’t know who the board of directors of Copcan are, does anybody know?”
Ken Holmes interjected, “Spend two minutes googling ‘Jason Ward’ and ‘buildings’ and you’ll find out who Alberni Design Associates is and who is the proprietor.”
“Mr. Holmes, I know that in hindsight,” Granstrom said. “I’m talking about when ADA was hired to do work. Their work was fine. Staff looked at. Darrin, and the boys at the rink, they were all aware of the work.”
“Where’s [former CAO Victor] Kumar in all this?” a resident called out.
“Mr. Harrison, as for supervision, I guess it could be better, yes,” Granstrom said.
Coun. Kathy Moore—Why did you hide it from council?
[Rises to applause.] “Thanks,” Coun. Kathy Moore said. “And thanks to everybody for coming tonight, I really appreciate the community support, because I think this is an important issue that we do need to address. It’s high time.”
“I do appreciate the mayor coming out and doing this,” she added, “I know it’s tough.”
“One thing that could happen on the factual level, we got a summary of the work that was done dated Dec. 6 2011. That’s the total Elise Paré was referring to. That’s the last summary that we had,” she said.
“When I added up what ADA had been paid on that, I came to about $150,000, which was my initial concern. When Laurie Charlton looked at the invoiced paid to ADA, he came up with $185,000. Clearly that report wasn’t quite finished,” she said.
“Additionally, there was work done by Dale Seymour to correct errors in the work that was done initially, and that’s not in the final report,” she said. “I think it would be helpful to have a final report. At least that’s a piece of the facts that we could then look at it.”
“As far as this meeting is concerned, I think the citizens of Rossland deserve to have their questions answered, as long as they’re not beating anyone up, for as long as it takes,” she said, referring to a one hour time limit that had been initially set on the meeting.
“I know this is going to sound like an odd question, I’d like to know: when did you know there was a problem with Jason Ward?” Moore asked.
Granstrom replied, “The day he put in his resignation.”
“That was in September. So when I came and talked to you in November and you said there was nothing wrong, that wasn’t quite being honest?”
“No, what wasn’t honest?” Granstrom said.
“I went to you, and you said nothing was wrong. And I went to Victor Kumar, and he said nothing was wrong,” Moore said.
“What was nothing wrong?” Granstrom asked.
“Nothing wrong was that he ‘left for personal reasons’ when in fact there was more to it than that. I was trying to figure that out,” Moore said.
“He left for personal reasons, Coun. Moore, and you know full well that that’s really all we can say about why he’s gone.”
“I’m not talking about what we say to anyone else, [but] about what a mayor said to a sitting city councillor,” Moore said. “It would have been better to have dealt with this early on, rather than later on.”
Ira Schwarz—What about legal counsel?
“I can’t believe the guy is just getting off and walking out, and nobody does anything about it. If there is in his contract he can’t have a conflict of interest, have you asked for legal counsel if we can fine the guy, or something?
“What I can say,” Granstrom said, “is we have found nothing illegal.” [Laughter.] “We’ve found nothing illegal and I can’t say it any straighter than that.”
“Who is ‘we,'” a resident asked.
“Council,” Granstrom replied.
“But legal counsel?” the resident pursued.
“No, no,” Granstrom said. “Council.”
Leigh Harrison said, “But Mr. Mayor, it’s obvious he breached his contract. You know that. How can you say that? He put in a bid from a company to himself. For God’s sake, you have acknowledged that was wrong. You can’t say there was nothing illegal. It was illegal as illegal can be! We must be on some different planet here, if you don’t think that’s illegal.”
“I said mistakes have been made,” Granstrom said, “I don’t know how much more I can say. If we want to prove that something was illegal, it’s going to cost us money. If an employee walks away, he’s gone. The remedy is, he’s no longer in our employ.”
He continued, “The next thing we look at is, is there any harm to the city? Did anybody lose anything? Did anybody steal anything? The answer to all of that is no.”
“The next step is okay, if we want to move it forward, if we want to prove it, we need to spend money on a forensic audit. Council decided that it was not worth spending money on a forensic audit because the employee is no longer with us.”
Elise Paré—Fewer senior staff members means less accountability
“Moving forward, it seems there was an employee who wasn’t supervised for two years. He was able to do this work and bill the city for two years without his boss, the CAO, noticing what was happening,” Elise Paré said.
“First,” Granstrom said, “the employee was not doing the work. His company was doing the work, for sure. Did we know he was part of the company? No.”
Paré continued, “We now have a new CAO combined with the CFO position. In the past, where we had two people checking—that didn’t work—now we have one person doing the job of two people. Would you say there is the possibility for less accountability?”
“And the new CAO was not hired in an open competition,” another resident added, “she was appointed by [former CAO] Victor Kumar.”
“I believe [the new CAO/CFO position] is going to be more effective because [she] also has the assistant CAO/Corporate Officer [Tracy Butler],” Granstrom replied.
“But there was also a Corporate Officer—and a CFO, and a CAO—when this took place,” Paré said.
“The CFO was directly involved in the finance, she wasn’t the rover kind of thing to check out what people were doing,” Granstrom said.
Elise Paré—Report Ward’s breached code of professional conduct
“Jason Ward was a member of the Applied Scientists, Technologists, and Technicians Association. It’s a professional association that has a code of ethics,” Paré said. “One of the principles of his code of ethics is that he is to act with integrity…and avoid a conflict of interest. But, ‘where such conflict arises, to fully disclose the circumstances without delay to the employer or client.'”
“I understand he is no longer the city’s employee, but he is a contractor to the city through ISL engineering [on the downtown renovation project],” Paré said.
“He’s an employee of ISL,” Granstrom corrected.
“He’s an employee of ISL,” Paré continued, “who is contracted to manage a major infrastructure project. Would the city support starting a disciplinary hearing through the professional association?”
“Would we be willing to do that?” Granstrom began. “If there is a need to do that, I think we’d be open to doing it. I don’t know the professional association, I really can’t speak to it.”
“There’s a process for lodging complaints against registered technologists, just like engineers, through the body of their association. If [they] act unethically, you can lodge a complaint against them.”
“I didn’t know that, thank you for the information,” Granstrom said.
“I think it would be one way to get some sort of accountability from Jason. He’s walked off and he’s come back and he’s doing it again, and we’re still paying him,” Paré said.
“We aren’t paying him,” Granstrom said. [Laughter.]
“We are paying him though the contractor,” she said.
“We’re paying a contractor,” Granstrom said.
Ken Holmes—Potential for fraud should be investigated by RCMP
“When a project manager with budget responsibilities violates normal contracting procedures, awards contracts to his own company, and approves payments to his own company, there is a potential for fraud,” Holmes said.
“Why wasn’t this reported immediately to the RCMP?” he asked.
“I can’t answer that question, because I don’t know why it wasn’t. That’s my answer. It’s as honest as I can be,” Granstrom said.
Ken Holmes—Superficial audit supports mismanagement
Holmes continued, “The auditor’s letter of June 16 is very superficial. It reports only on accounting procedures. It raises more questions than it answers. When I say superficial, I actually use the word shallow, like a whitewash.”
“The auditor’s letter does, however, support Coun. Moore’s concerns over the process by which ADA was awarded the work,” he said.
“Was this superficial accounting audit requested by the CAO, so that his lapses in management would not come to light?” he asked.
“After receiving the auditor’s report,” he asked, “why didn’t you and the rest of council support Coun. Moore and demand a more thorough and comprehensive investigation?” [Applause.]
“There was a thorough investigation. It may not be on the timeline that people see, but I know council went through this whole thing, in detail. That’s why we got to where we are right now,” Granstrom said.
“As for a superficial audit, or somehow the CAO asked for an audit that didn’t mean anything? The auditor is the auditor. He’s a legal entity. He has a duty to his profession,” Granstrom said.
“If there are any more comprehensive [letters from the auditor, other than the one on June 16], personally I’d love to see it, and many other people would to,” Holmes said.
“The audit says the invoices conform to the budget. It doesn’t say how cost estimates were obtained. It doesn’t say how the budget was prepared. It doesn’t say who prepared and approved the budget—which would normally be a project manager’s responsibility. It would be quite easy for a project manager to put inflated amounts into a budget,” he continued.
“It doesn’t say whether competitive bids were obtained. It doesn’t say whether bid evaluations were done and submitted to senior management for approval. If competitive bids weren’t obtained or solicited, it doesn’t say how a sole-source bid was approved,” he said.
“The auditor was satisfied the right number of signatures were obtained on cheques. Big deal! It doesn’t say who approved invoices for payment, which is normally a project manager’s duty. It doesn’t say whether or not the former building inspector approved invoiced payments to his own company. It doesn’t say what documentation supported invoices,” he said.
“There appears to be no investigation into how the work was actually performed. It doesn’t say whether subcontractors were hired, or whether he directly hired tradesmen himself and supervised the work while he was doing his other city duties. It doesn’t address so many things, I could go on and on,” he said.
“Surely council should have been asking similar questions to this. All we know is how much money was paid into ADA’s bank account. We don’t know how much was paid out of ADA’s bank account to subcontractors, material suppliers. And we have no idea how much was retained in there as a profit,” he said.
Ken Holmes—So what about the RCMP?
“Why wasn’t this submitted to the RCMP for investigation for potential fraud?” Holmes asked.
“I can’t answer why, I can say that it wasn’t,” Granstrom replied.
“Do you intend to do it now?” a resident added. “Why not?” another asked.
“I think that would be a council decision to do that, and certainly, a councillor here could bring that forward,” Granstrom said.
“Would you support it?” a resident asked.
“I can’t say that I will do that. If it comes to council, I will have to look at it. I’m sure it’s going to be more than just ‘do this,’ there’s going to be more than one side to this thing, don’t you think?” Granstrom asked.
“No doubt a staff report will help make that decision,” Andrew Bennett said. [Laughter.]
Andrew Bennett and Fletcher Quince—Who knew what and when?
“A point of clarification,” Bennett said. “Earlier in the evening you told us that staff realized there was a problem. I assume, if staff were doing their job, they would go directly to the CAO, who would come directly to you. You said you discussed the legalities and were in the midst of those discussions when [Ward’s] resignation came in. But then you later said to Kathy Moore that you knew only the day that he put in his resignation. I’m asking for clarification on the story.”
“I knew of the issue the day the resignation was put in,” Granstrom said.
“When did the CAO know about the issue?” Bennett asked.
“The exact day? I would say, the day before,” Granstrom said.
“Not when [Corporate Officer] Tracey Butler reported that ADA was in a vacant building in Trail?” Fletcher Quince asked.
“Pardon me, sir?” Granstrom asked.
“That ADA was occupying a vacant building in Trail,” Quince repeated.
“You mean Kathy Moore,” Granstrom said.
“No, it has nothing to do with Kathy Moore,” Quince continued. “City staff knew that ADA was not actually a company. ADA is Alberni Design Associates, certainly, but when they [city staff] went down to Trail to check the address of [ADA], they found it to be a vacant building, not occupied by ADA. They then brought that forward to [former CAO] Victor Kumar. Don’t you think that might have been before the day that Jason resigned,” Quince asked.
“I can’t say that, I don’t know,” Granstrom said. “I knew the day he resigned, that’s all I know.”
“The question from Andrew is, when did the CAO know. It’s your supposition that he only knew the day before you knew?” Quince asked.
“I can’t say the exact day, no, it was before I knew, obviously. He told me,” Granstrom said.
“Would you like to look into it? Is that something the city would be interested in knowing?” Quince asked.
“You would like me to look into that, or do you know it already?” Granstrom replied.
“I would like the city to know when the CAO knew that the person they had contracted to work on the arena was, in fact, a city employee. It was brought to the attention of the CAO, which he then brought to the building manager,” Quince said.
Lesley Beatson—Flaws in cheque signing procedure
“Who approves invoices?” Lesley Beatson asked Laurie Charlton, who was sitting behind her.
“All the invoices were supposed to be approved by the financial officer for payment,” Charlton said.
“Were they?” Beatson asked.
“Many of them were only approved by Jason Ward. They weren’t countersigned by the accounting department,” Charlton said.
“That brings questions of how cheques are issued from the city, when the CFO’s signature isn’t there. Doesn’t the CAO follow that?” Beatson asked the mayor.
Granstrom said, “It depends on the value of the cheques, what the process is. The level of scrutiny depends on the level of the cheque.”
“Is there a relationship between Ward and the former CAO, outside of work?” Beatson asked.
“No,” Granstrom said.
Bob Murray—Laxity, ethical misconduct, and discipline
“Forgive me if, from the discussion, it seems things have been pretty lax at City Hall. [Laughter.] With all due respect, we really need some improvement here. I don’t understand why you can’t really say when Victor Kumar knew about this,” Murray said.
“Because I really don’t know,” Granstrom said. “I don’t know the exact date.”
“Why didn’t you ask? This is an important issue, those questions need to be asked. I think communication needs to be improved.”
“I’ll get the answer to that,” Granstrom said.
“Also, to [Elise Paré’s comment] I’m a professional forester, and yes, we do have ethics. All it takes is a letter with supporting documents to make a complaint. Let them do the discipline, because I think some discipline needs to be done here,” Murray said. [Applause.]
Les Anderson—False GST numbers
“I think Laurie Charlton wrote in the Rossland Telegraph that Jason Ward submitted a false GST tax number. Do you know if he used that number on his invoices, and if you paid the GST on this false number?” Anderson asked.
“The GST number is the responsibility of the contractor, that’s what I know,” Granstrom said.
“If you knew, or somebody knew, the GST number was not legitimate, and you paid tax on that number, that’s a federal, criminal offence. You can’t back out of that. Was this reported to anyone?” Anderson asked.
“The GST number is the responsibility of the contractor. If the contractor doesn’t give a proper GST number, that’s a criminal offence,” Granstrom said.
“This is one of the very important aspects of a competence audit,” Anderson said. “Usually it’s the responsibility of the payee to report, and to try and get that money back.”
Adrian Barnes—Relationship between Ward and Mayor?
“This is a question from a Telegraph reader that I’d like to pass along: does the mayor have a relationship with Jason Ward or any of his family?” Adrian Barnes asked.
“No,” Granstrom said.
Jim Albo—High priced staff not doing their bloody job
“One of the things I’m getting out of this is that the CFO, the CAO, and all these other big, high-priced people we have at City Hall, it seems to me from what I’ve heard, for the huge amount of money we’re paying these individuals, they certainly weren’t doing their bloody job,” Albo said. [Applause.]
Ken Holmes—Coun. Moore a model for council
“I want to publicly thank Coun. Moore for her steadfast integrity, and I heartily recommend her as a role model for the rest of council,” Holmes said. [Long applause.]
Vincent Joseph—Maybe this has happened before?
“If we had a chance to look at evidence, this could have happened before,” Joseph said, “it could have happened a lot before. What was the extent? Maybe we’ve been hosed for a long time? [Laughter.] No address, no paperwork, no whatever, don’t know what we’re paying for. I’m concerned.”
“I’ve never been married,” he added, “but I feel like I’ve been cheated on and I’m like, how long has this been going on for? And what’s the lawyer’s bill going to be when I lose everything?” [Laughter.]
Adrian Barnes—Public internal review of fiscal policy required
“Another question from a reader: What happened to checks and balances? Are the only people protecting Rosslanders the ones who are part of the process that allegedly allowed this concern to come to the fore in the first place? I believe, if even part of the allegations were true, that anything less than immediate, intensive, public internal review of fiscal policy is an affront to the citizens and a gross violation of public trust,” Barnes said.
“Why is nobody investigating this beyond staff at the city?” Barnes asked.
“The decision was made by council not to proceed with the forensic audit,” Granstrom said. “The decision was made based on the fact that, if we were proceed, what could we possibly gain? Would the man go to jail? Would the work that was done have to be removed? Whatever.”
“Do you stand by that?” Barnes asked.
“Yes, I do,” Granstrom said.
Bob Keating, CBC reporter—Jason Ward’s ongoing relationship with the city
“Does Jason Ward still have any relationship with the city, and will that continue?” Bob Keating asked.
“He has no relationship with the city, he’s no longer an employee,” Granstrom said.
“But he works for ISL. Will they continue to do work with someone who has alleged to do these things over 14 months?” Keating asked.
“Yes,” Granstrom said. [Grumbling in audience.]
“Why?” asked several residents at once.
“Well, it’s an allegation, first of all,” Granstrom said.
Michelle Laurie—Do you not have an inkling, Mr. Mayor?
“Based on the conversations this evening, and listening to the public that came out of their homes on a Thursday night to talk to you, do you feel a little differently, perhaps, that an investigation of this situation is warranted to earn back the trust of your citizens?” Laurie asked.
“Again, when we spend money it’s a council decision,” Granstrom said.
“I am asking you, as a person who is representing our city, a person who is elected to lead us, do you not have an inkling that maybe you should investigate slightly deeper into the situation based on what the citizens, who you represent, have said here tonight?” Laurie asked. [Applause.]
“To the best of my knowledge, nothing illegal is here. I know all the records are public. And anyone who wishes to take this any further, has access to all the records, I know that,” Granstrom said.
“Do I think it’s a good use of time to proceed any further? No I do not,” he said.
“Do you feel you represent the citizens of Rossland?” Laurie asked.
“Yes,” Granstrom replied.
Paul Picard—What is to gain? What about understanding what happened.
“You are wondering what is to gain [by an investigation], how about understanding what happened? At the beginning of the evening, I wanted some facts to start from. I hope the whole thing is taped and that you will listen to all your answers through the evening,” Picard said.
“All the answers were like, ‘Something wrong happened and we kinda knew at one point in time that somebody did something wrong, but then we did some measures to improve.’ Just listen to your answers all evening,” Picard said.
“What could we gain by doing [an investigation]? It’s not that we want to put somebody in jail or get some revenge. We want to understand what’s going on.”
David Livingstone—If you won’t investigate, we will
“I can understand how you might be concerned that maybe there’s a witch hunt going on, or something like that, but it’s not so much about accusing someone as it is about preventing this from happening again,” David Livingstone said.
“For me, I came here to see to what extent you as a representative of council were willing to see through the situation, and how far you were willing to go,” he said
“I think, for the rest of us, we want to get to the bottom of it. We’re getting some very vague assurances from you, and for the extent of the wrongs that have happened, it’s not adequate,” he said.
“We need to find out: are you going to do something about this? Because, if not, the citizens of Rossland are going to have to delve a little further,” he said. [Applause.]
Granstrom replied, “We certainly have a responsibility to the citizens to make sure this never happens again, we’re well aware of that. If there was something illegal, we would have already been pursuing it. We haven’t found anything illegal, it ties your hands a little bit.”
“But have you got legal advice?” Livingstone asked.
“Not written,” Granstrom replied.
“You did tonight, there was legal advice right here,” a resident said, pointing to Leigh Harrison.
Jan Absher—Tell us the plan
“I would like you to state very succinctly what you plan to do after the meeting tonight,” Absher said. [Laughter.]
“I plan on going home and taking my dog for a walk.”
“You’re making a joke of it,” she said.
“No, I’m not making a joke of anything,” Granstrom said. That’s succinct isn’t it? I’ve tried to say what I can say, and I’ve tried to be as honest as I am. And I am, I’m honest. There’s nothing hidden here, anywhere. If we can make sure this never happens again, that should be the goal, right?”
“You said ‘if.’ It shouldn’t be ‘if.’ It should be ‘we will make sure this never happens again, and this is what we plan to do to make that happen. That’s what I’d like to hear from you,” she said.
“We certainly do not want this to happen again, and we’ll take all the steps we feel are necessary to make sure it doesn’t happen again,” Granstrom said.
“So again, no facts, just assurances,” Absher said.
“We still don’t know what happened,” Vincent Joseph interjected.
“It doesn’t sound very sincere,” a resident in the far back of the room added.
“It’s very sincere,” Granstrom said.
“It almost sounds like you’re making a joke,” the resident at the back continued. “The public wants answers, and they’re asking: maybe we need legal advice so we know where it’s coming from and where it’s going.”
“You don’t seem like you’re being very honest about it,” he said.
“I’ll tell you,” Granstrom said, “the reason I came here is for exactly that: to be sincere and honest. That’s the reason I agreed. Les and I chatted. That’s why I came, to be honest and sincere. And I am honest and I am sincere.”
Doug Halladay—People are confusing ethics and legalities
“I think there’s a big grey area between what’s unethical and what’s illegal. I haven’t heard anything tonight that tells me there was a lot of illegal things going on, like fraud or anything like that. There’s a breach of contract: that’s unethical, it’s not illegal,” Doug Halladay said.
A chorus of voices replied, “It’s illegal.”
“A whole lot of ethics that have been broken, but I’m not sure how much illegal stuff has been done. I think that’s where a lot of people are getting confused.”
Bill Profili—Closes meeting
“I think people have made their case to the mayor. Coun. Moore was here. Certainly there are open council meetings to carry it further,” Profili said.
“Leigh, I hope I wasn’t too much of an apologist through the meeting,” he said. “Thank you all for coming, I’ll let the mayor close.”
“I want to thank everyone from coming, and seriously, I can’t be more sincere and more honest, I cannot be. I welcome anyone to call me anytime, if anyone wants to call me any time. If anyone wants to organize a forum like this any time, please do so, and I’m happy to come and speak. That’s all I can say. Thank you very much.”
“Thank you,” from various audience members.
[Editor’s note: This article has been updated with one previously “unidentified resident” identified as Kathy Williams, and another identified as Jan Absher.]
[Editor’s note: Ken Holmes was misquoted above as noting that “there appears to be no investigation into whether the work was actually performed.” In fact, Holmes said there was no investigation into how the work was performed. The article has been modified to reflect this.]
