16 August 2019 0 Comments Posted By : Tim Bousquet

Charlottetown CAO Peter Kelly accused of exceeding authority and awarding untendered contracts

Peter Kelly, the Chief Administrative Officer (CAO) of the city of Charlottetown, is accused of improperly, and possibly illegally, exceeding his authority with the awarding of contracts.

The allegations were made by councillor Bob Doiron at the monthly meeting of Charlottetown council Monday night.

Reached by phone at his home Tuesday evening, Doiron said that Kelly:

• awarded over $1 million in untendered paving work;

• approved cost overruns of $500,000 related to water and sewage work, without bringing that expenditure back to council; and

• approved a no-bid contract to a Halifax consulting company for studying parking issues in Charlottetown.

Doiron said that council must approve any expenditure greater than $25,000.

Two paving contracts of about $900,000 each were approved last year, but Kelly approved additional paving work not covered by those contracts costing over $1 million, Doiron told the Examiner.

Doiron said he received documents that spelled out the additional work, “and he [Kelly] signed off on it.” Doiron did not table the documents at the council meeting, and he declined to make the documents available to the Examiner, saying he didn’t know if he had the legal right to make the documents public.

Asked if he thought the companies awarded the paving work were responsible for the irregularities, Doiron said he didn’t think so. He said there are two major paving companies on Prince Edward Island, and that they regularly bid against each other. Doiron didn’t see anything wrong with that process. Rather, the problem is a lack of financial control at the city.

Additionally, Doiron said Kelly has approved a half million dollars in cost overruns related to water and sewage work. Those cost overruns should have been brought to council to be approved, said Doiron.

And Kelly gave a $45,000 no-bid consulting job “to one of his buddies in Halifax” related to a study of parkades and parking policy in Charlottetown, said Doiron. That contract should have gone to tender and approved by council, as it exceeded $25,000, said Doiron. Doiron said he could not remember the name of the firm that was awarded the consulting job.

Kelly has not yet responded to an email from the Examiner seeking comment.

Doiron said that Charlottetown in now on its fourth finance officer in three years, as three previous finance officers quit. For a while, the deputy CAO acted as finance officer, said Doiron, but then that deputy was fired and there was no finance officer for a number of months until a the position was filled “a couple of weeks ago.”

“So guess who’s in charge of the finances,” said Doiron.

The Charlottetown Guardian reporter Dave Stewart wrote in February that the city of Charlottetown “parted ways” with Deputy CAO Scott Messervey. “No reason was given, and no one from the city was willing to comment on the matter or say whether he was fired or resigned.”

“Messervey was brought on to take some of the load off CAO Peter Kelly’s shoulders,” wrote Stewart. “Since Kelly arrived in 2016, he had been taking care of the tasks done by four former directors, positions that hadn’t been filled — director of public services, director of corporate services, director of human resources and director of fiscal and development services.”

Kelly has a left a trail of financial irregularity in his wake. While mayor of Halifax, Kelly was involved in an improper loan scheme, providing financing to impresario Harold MacKay to put on concerts on the Halifax Common. The impropriety was revealed by then-Finance Director Cathie O’Toole, and was detailed in a scathing report by Auditor General Larry Munroe.

“Given the level of experience and involvement of [then-CAO Wayne] Anstey and Mayor Kelly in the public sector,” wrote Munroe, “each of these individuals should have known something out of the ordinary was occurring and should have asked more questions to determine if what they were contemplating and/or doing was appropriate, especially given the method of arranging for payments to be made to [MacKay’s company] Power Promotional Events.”

Kelly also mishandled the estate of Mary Thibeault, a family friend who named Kelly as executor of her estate upon her death. My investigation of Kelly’s involvement in the estate revealed that “one reason the Thibeault estate remains open is that, after she had died, Kelly transferred over $160,000 from Thibeault’s personal bank account to himself.” That was in 2012; the estate was finally settled about a year later, with terms sealed.

After my article was published in The Coast, Kelly announced that he would not run for reelection as mayor.

But in 2014, Kelly was hired as CAO of Westlock County, Alberta. He soon was embroiled in yet more financial irregularity. As I reported in August 2016, “Kelly oversaw the ‘Horizon North’ project at the Westlock Industrial Park that ended up costing the county nearly $400,000, of which the county wrote off over $200,000. Sue Oberg, the Assistant CAO and CFO of Westlock County, has publicly said Kelly overstepped his authority.”

Subsequently, Kelsey L. Becker Brookes, a lawyer retained by the county, said that Kelly was personally liable for $194,000 in costs incurred by the county but it would be difficult to get a court judgment against him..

By that time Kelly had moved on to the CAO position in Charlottetown.

Charlottetown councillor Bob Doiron, who levied the most recent allegations against Kelly Monday night, is a cop. He worked with the Charlottetown police before taking a job as a cop with the University of Prince Edward Island.

“People never change,” said Doiron, referring to Kelly.

Doiron said that Kelly seems to have won over the majority of the Charlottetown council. “Most votes are seven to three, or six to four,” with Doiron consistently in the minority.

Doiron is clearly frustrated. He’s asked for council to get an independent review of the city’s finances, but was rebuffed. Mayor Philip Brown told Doiron that he was welcome to attend the next finance committee meeting, where the committee will presumably ask questions of Kelly. But Doiron doesn’t expect to get anywhere there, either. He said he intends to ask the province of PEI to intervene.

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