City of Rossland asks BC Auditor General for Local Government to investigate governance issues in the arena scandal
By Andrew Bennett
The crowd spilled into City Hall’s hallways as 11 Rossland residents addressed council’s public input period on Monday to support Coun. Kathy Moore’s motion to request that BC’s new Auditor General for Local Government (AGLG) investigate the big picture of policy, procedure, and governance in Rossland that may have contributed to the Jason Ward arena scandal.
The residents who spoke—among them Michelle Laurie, Elise Paré, Maurine Brown, Darcee O’Hearn, Jan Micklethwaite, and Louise Sidley—also asked that the motion be moved up in the agenda from the end of the meeting. Council agreed to this suggestion.
Moore’s original motion had asked that the request for an investigation be made to the “Auditor General and/or the Inspector of Municipalities,” but, after some correspondence with Julian Paine, Assistant Deputy Minister of Local Government, she decided to amend this to only the AGLG.
Paine recommended that the city consider a police investigation because “many of the various issues you have cited seem to have a strong legal dimension to them, either criminal or civil,” and he suggested that the municipality also consider “how much or how little of its authority it delegates to staff.”
But he wrote that the Inspector of Municipalities might not be suited to investigate the arena problem because that office focuses “on the financial viability of local governments.” He added, “The residual power of the Inspector to hold inquiries into the conduct of municipal business is extraordinary and very rarely used (i.e. requiring approval of Cabinet before proceeding).”
Instead, he suggested, “The newly established office of the AGLG has been created to provide an independent source of information and non-binding recommendations to local governments about the economy, efficiency and effectiveness of one or more of their operations, as well as identifying possible best practices that might be relevant to other local governments.” He noted that the AGLG is tasked with performance audits, not forensic audits, for which the municipality must hire an auditor.
Public input supports a third-party investigation
Resident David Grant asked if there have been “any further developments” in the inspection council recently ordered for the arena upgrades performed by ADA.
Mayor Greg Granstrom replied, “Council just found out today that Fairbanks will be here on Feb. 6 to complete their report on the inspections, and council expects a report two weeks later.”
Ken Absher said, “This kind of arrangement—with a city employee awarding a contract to his own company, and the company submitting invoices for his approval for payment, and he’s responsible for inspecting the work afterwards—is a direct conflict of interest. The only thing that stands in the way of the City of Rossland being defrauded is an almost saintly level of ethics and integrity on the part of Jason Ward.”
Granstrom opposed the mention of Ward’s name, so Absher modified his comments to “this individual who shall remain nameless.”
Absher continued, “He violated his legally binding contract with the City of Rossland when he entered into this conflict of interest, and he violated very basic provisions in the City of Rossland’s purchasing policies. And we’re expecting his integrity to assure us that we haven’t been defrauded of our taxpayer dollars? For councillors and the mayor who don’t understand why this is an important issue to people, that might be the answer. I’d like to support having some outside, independent investigation.”
Rosa Jordan thanked the mayor and council “for forming a task force to deal with the Delegation Bylaw, considering the problems that bylaw has caused in the past.” She suggested, “The most responsible thing to do is simply eliminate it.”
Jordan added her appreciation that, “as a council, you have decided to deal with this issue yourself, not hand it off to staff.” She said, however, that the “outside influence” of the AGLG is required because “just about everyone here is implicated, either by having benefited from contracts, or having not noticed when they were handed out and objected to them.”
Bill Micklethwaite qualified his statement to council: “This is not a witch hunt,” he said. “Nobody really wants to pin the tail on anybody.”
“I’d like to suggest it’s important to improve all future contracting and hiring in both operational control and oversight, from a business point of view,” he said. “The city is the citizen’s business. I don’t know of any business that would appoint a CEO and give him complete power over all affairs without further oversight.”
David Diplock said, “I have yet to meet anyone who is not appalled by what they’ve heard about what’s going on.
“I feel that all the great press the town has received this year has been nullified by this negative cloud that’s hanging over the town right now, and we need to get to the bottom of it and move on from there,” he said, referring to positive press coverage such as the Rossland-Nelson win of Powder Magazine’s Ski Town Throw Down, the New York Times’ No. 8 ranking for Rossland in top 2013 destinations worldwide, and CTV’s extensive coverage of the 116th Rossland Winter Carnival on Canada AM.
Coun. Moore’s motion
The motion requests that the AGLG “undertake an inquiry…into the conduct of the City of Rossland’s business” and to make suggestions for improved governance and best practices in the following areas:
- The history since 2007 of council decisions that have limited council’s authority.
- A review of city controls on tenders, contracts, and reports for “adequate oversight” of projects.
- A review of city employees in positions of responsibility “who were, or should have been aware of any issues with the Arena Improvement project (2009-2012), and failed to inform Council of such issues.”
- A review of the actions taken by city staff and council once wrongdoing in the arena project was discovered.
- A review of hiring procedures for management contracts since 2007.
Moore’s complete, amended motion is attached below. The final motion was further amended at Coun. Jody Blomme’s suggestion to include a clause that the city, before proceeding with the investigation, be advised of any cost that an AGLG investigation might incur.
Nevertheless, the AGLG has clearly stated that, if they chose to proceed with an investigation, there would be no direct cost to Rossland. The AGLG’s mandate rests on the premise that these investigations will help improve best practices in municipalities across BC.
Moore called the motion “self-explantory,” and said, “This is what we need.” She said her communication with the AGLG indicated the office was “interested,” even though as a new government office it is not yet fully operational and, even if the AGLG agreed to investigate, it may take months before it gets off the ground.
Moore concluded, “This is not the only thing we need to do, but it’s a good start.”
Moore has also submitted other motions to address issues that council itself can investigate and improve, including a review of the Officers Bylaw, a review of the Purchasing Policy, and movement towards a forensic audit.
Council’s response to the motion
Coun. Jill Spearn said, “The whole issue has led us into waters that I, as a councillor of seven years, have never waded in before.” She called the entire issue “disturbing” and said she realized “this has become a huge issue in our community.”
“The overall intention of this [motion] is understandable,” Spearn said. She questioned the date of Jan. 1, 2007, and asked why the investigation should go so far back. Moore replied that some history of the powers delegated by successive councils is needed to shed light on the current Delegation Bylaw and its role in the present quandary.
Spearn asked, “How do we hold past councils responsible today?”
Moore said, “It’s not about past councils, it’s about past bylaws. I’m not saying, ‘These guys did a bad job or a good job.’ To learn, we need to look at where we were to know where we ended up.”
Spearn also asked about the review of city employees and their potential failure to inform council.
Moore responded, “If a person was in a position to report something to council that they knew about, but they didn’t do it, that’s a failure in the structure of the position, or the management of that position.” She added, “I’m not out to get people, I’m out to find out what went wrong.”
Coun. Cary Fisher said he found the issue “difficult,” and agreed, “in principle this [motion] is a good idea.” Nevertheless, he argued that he would prefer the issues be dealt with in-house by council itself, rather than through a third party that might take a year or more.
Moore reiterated that in-house investigations were also necessary, and these would be complementary to an AGLG investigation. “There are things we need to do ourselves, which is why I’ve brought forward motions to look at our Officers Bylaw, I’m very glad to see there’s a task force on the Delegation Bylaw, and I also think we need to go back and look at our Procurement and Purchasing Policy, since the changes that were made—again, before this council was elected—have weakened that document,” she said. “I also have a motion for our solicitor to do a [Request For Proposals] for a forensic audit.”
Fisher said, “Our responsibility is to get it right now, to get our [council] investigation completed, to find out what happened, and report back to you, [the public], and seek retribution.”
He said, “Sometimes something bad is going to happen regardless of how good the procedures are.” He added that even investigating this issue and implementing better practices “won’t guarantee it won’t happen again.”
“We need to do a better job for sure, we need to review policies and procedures. I’m not so afraid of having a third party come in, but it might be a year from now. Why not get on it now?” Fisher said. “We’re all good people up here [on council], all of us, and we’re going to do our best to get it right. I’m just not sure forwarding this [motion] is the best idea.”
Coun. Tim Thatcher said, “I’m in favour of the amended motion,” but he was bothered that “there is so much there for Auditor General to look at. Are they going to look at all the bullets? Or Just one? What’s the timeline?”
Thatcher added, “I agree with Coun. Fisher, there’s lots we could do ourselves, or should do ourselves.”
Coun. Kathy Wallace was strongly opposed to the motion. Her repeated comments about the participants at the senior’s centre meeting of Jan. 4 not being “representative” of Rossland are reported separately.
Wallace referred to Moore’s communication with Julian Paine, and quoted his reply: “I [Julian Paine] understand that your proposed motion has just been presented to Rossland Council on January 9. As you can appreciate, it is Rossland Council that needs to determine how it wishes to proceed on the issues that are before it. Raising your concerns with your colleagues—as you are doing—seems the right focus for your efforts at this time.”
Wallace said, “To my mind, whether it is good enough for some, council has taken some steps forward. We have begun a process of gaining information. As we gain information, council will decide how to proceed to the next step.”
“I can’t endorse it,” Wallace said about the motion. “It’s so complex. I understand it generally, but do I understand it on a deep legal level? No, I do not.” She said she thought the city should seek a legal opinion before endorsing the request to the AGLG.
Wallace was also concerned there would be a cost to a large and in-depth AGLG investigation.
If council chose not to support the motion, Wallace noted that Moore intended to take the request to the AGLG as part of an independent coalition of residents: “It doesn’t really matter to Ms. Moore whether council supports this request, she’s going to do it anyway. And that would be on the backs of taxpayers,” she said.
The AGLG confirms that there is no direct charge to the municipality, although the office is funded through provincial taxes.
“At this point in time, I’m not in favour of this,” Wallace said.
Coun. Jill Spearn defends the motion and it passes
“I am not adverse to the Auditor General coming in,” Spearn said. “In my place of work [MacLean Elementary] we have audits all the time. If we didn’t work towards best practices, or better practices, then no change would happen. I agree with statements from all around the table, but I really feel we need to find some peace in our community around this issue.”
Spearn continued that, as a councillor, she has “bigger things on her plate” that demand her energy, namely the threatened closure of Rossland’s schools. “Not that this [arena issue] isn’t big,” she said. “It’s huge. So if this third party can come in—and let’s face it, it’ll be taxpayers’ dollars at work—I don’t think that’s a bad thing. I know this is complicated, and the whole issue is complicated and goes back to prior councils.”
“I was worried about the cost, but Coun. Moore says it’s not going to cost anything,” Spearn continued. “I don’t want to see heads rolling, I want to see a systems improvement or a systems analysis. I think that’s what the intention of this is. And I’m not afraid.”
“I spoke passionately last meeting about the fact that I did feel there was information that wasn’t presented to council in order to make some viable decisions. I feel that I’m responsible here. With that responsibility, I’m really not afraid to support this motion for the good of this community,” she said.
“I don’t have the expertise to be part of a committee, as Coun. Fisher is suggesting,” Spearn added. “My concerns and my energies are directed towards other committees right now.
Fisher said, “If the motion passes, that’s fine.” He added, “I don’t find it that complicated.”
He continued, “The fundamental issues we have are that policies and procedures need to be reviewed. That’s really a council job, to set direction.”
“The way I look at it, let’s get the Auditor General in, that’s great, but if we’re not going to do our job, then we need to all resign, because our job is to fix all these things. And I agree, there are things that need to be fixed. But there are probably a pile of things that don’t need to change. We don’t need to reinvent the wheel.”
Blomme said, “If there are people in the community with the qualifications to audit us, and who are willing to offer their time, why don’t we let that happen, instead of potentially racking up a bill for the city? To lump all these things in one motion and then pass it off to someone outside, I don’t think that’s efficient.”
While saying that she now planned to vote against the motion—her objections to Coun. Moore’s version of the timeline of who knew what and when are reported separately—Blomme added, “I appreciate the effort that went into this [motion]. There was a sense of ‘Let’s take action.’ It’s a start.”
Moore reiterated that the AGLG would come back with recommendations for best practices, but this does not in any way preclude the city taking its own action, which she also strongly encouraged. Blomme replied that she preferred to take those actions first and contact the AGLG later.
Spearn explained that the AGLG is a separate but complimentary process to council debates, a “30,000 foot view” of the situation, “the big picture.”
“Sometimes you need people outside your board or council to look in and give you suggestions. Yes, I agree, we do set policy, we bring forth bylaws and change bylaws. That’s enormous, what we do, month to month. And we have a whole lot of big issues facing us right now. But the more people that can look in, and give their opinions, give their ideas, and share their expertise and brilliance, it only makes me a better thinker and a better councillor.”
She added, “If it’s not going to cost [Rossland] anything, why wouldn’t we take advantage of what we’re really paying for as taxpayers. That’s why this office [AGLG] was created, for exactly these kind of things. Let’s do this, and then we can move on. If it takes a year, that’s okay; in the meantime, we’re going to look at those policies and procedures, and maybe we’ll even have it all done—but I doubt it! We know how long things take to roll out.”
“Most of all, because the citizens have spoken to us loud and clear, regardless of how we perceive the different facets of society in Rossland, the citizens have spoken to us, and to me they have spoken loudly and clearly—and sometimes not very nicely. I’m going to vote in favour, and I think we should have the courage to perhaps do that.”
Blomme suggested an amendment to ask the AGLG to confirm, prior to engaging in an investigation, any cost that would be borne by Rossland. Moore agreed, and council passed the amended motion with Coun. Kathy Wallace opposed.
A disagreement later in the evening between Coun. Moore and Coun. Fisher, Coun. Spearn, and Coun. Blomme over the manner in which council has handled the arena scandal up until this point is reported separately.
