City hall woes remain after Peter Kelly's departure, says councillor who was CAO's loudest critic

Charlottetown councillor Bob Doiron had his choice of 18 proverbial hills to die upon when he decided in the summer of 2019 to take city hall and the city's CAO Peter Kelly to task.

Those 18 choices came in the form of a numbered list in a letter from the city's former deputy CAO Scott Messervey, outlining financial and administrative concerns he told council members he had brought up with Kelly, his boss.

(A recap: Messervey said he believed he was fired by Kelly just before he wrote that letter, in retaliation for having raised concerns. Kelly said Messervey was fired in part because some staff and councillors felt the accountant, who had previously spent eight years working in the office of P.E.I.'s auditor general, was "looking for errors, rather than attempting to work with them.") 

Doiron decided to take on Messervey's number 15 issue: a million dollars worth of paving that went forward without tender. Largely as a result of comments Doiron made in the media, Kelly filed a harassment complaint against the councillor, which ended up costing Doiron $10,000 in salary, plus an additional $8,000 in legal fees.

Two tenders were authorized for the paving work totalling $1.8 million in May 2018. The city ended up adding 11 more streets, and the work came in almost a million dollars above tender.

The extra spending wasn't authorized through another vote in council, but councillors Mike Duffy and Terry Bernard said that wasn't required because council had already passed a capital budget that included $3 million for paving.

To this day, Doiron insists an investigation is needed to determine whether the spending followed the city's own rules, or the province's Municipal Government Act. 

The deputy's other issues

But Doiron could have chosen to pursue any other item from Messervey's list of concerns, sent to council in January 2019.

For example, Messervey's number 12 issue was per diems. Those are amounts your employer will reimburse you to cover the cost of meals you have to buy while travelling on business — and Messervey alleged city staff and council members were claiming them even when they were attending conferences and events where meals were provided. 

Messervey also alleged full per diems were being claimed even when travel was only for part of the day, "resulting in an increase in city costs." 

Back in 2019, the mayor could claim $150 a day and councillors could claim $125.

In his letter to councillors, Messervey said he had first brought the issue forward in March of 2018, shortly after he was hired, but nothing had changed.

Four months after receiving Messervey's list of concerns — and after the council majority voted to take no further action regarding those concerns — many members of council did the same thing again, at the Federation of Canadian Municipalities conference in Quebec City. 

When the Canadian Taxpayers Federation published detailed expenses from that May 2019 trip, obtained through access to information, Mayor Philip Brown responded with an email statement saying changes would finally be made.

Two years earlier, though, the mayor had said much the same thing — when it was first revealed that the overall cost to city taxpayers from that trip was $43,993.22.

The alcohol question

On the same trip, the mayor gave a dinner at a Quebec City steakhouse that was attended by as many as eight councillors and two staff members plus some of their spouses. The $1,810 meal was expensed to the city, including $459 in booze.

Doiron missed that trip because of illness, but he could have chosen that issue from Messervey's list when he went on the offensive in 2019.

Messervey had said some members of council had done the same thing in December 2018, at the Dundee Arms in Charlottetown, expensing booze along with meals for their spouses while describing the meal as a "finance meeting."

By the way, councillors being allowed to expense alcohol with business meals was number 4 on Messervey's list.

Purchase orders and taxes

There are other concerns in the letter that haven't been substantiated but could yet surface to cause headaches for councillors who chose to ignore Messervey's warnings.

Among those:

• A move by council to increase the spending limit on purchase orders from $1,500 to $4,000, against the advice of city finance staff, who described the move as "a significant weakening" of internal spending controls, which had already been flagged as problematic.
• Contracts that were allegedly awarded outside the city's tendering process, including one for a software system for police ticketing.
• The fact that the city had been overcharging residents for sewer and water services for years.
• A break on property taxes that a specific personal residence in the downtown core was receiving from a rebate program meant for business development. Messervey said he advised Kelly that the residence was not eligible for the rebate, but the departing deputy told councillors no action was taken.

When Messervey's successor was finally hired in the fall of 2021, then fired six months later, she also left councillors with a list of concerns she said needed to be addressed. That list has not yet been made public.

To this day, Doiron says all these issues need to be investigated.

"It's awful that you have [this] evidence, [and] no one has ever investigated any of the concerns by the former two DCAOs, staff requesting they be interviewed, or anything like that," he said.

The whole thing about city hall — you're supposed to be quiet. You're not allowed to say a word about anything. It's under a golden seal of secrecy. And it's wrong.- Bob Doiron

"The whole thing about city hall — you're supposed to be quiet. You're not allowed to say a word about anything. It's under a golden seal of secrecy. And it's wrong."

Doiron took his concerns to the province, and it's still not clear what the province did in response.

During the closed-door meeting in mid-May where a majority of councillors voted to terminate Kelly's employment without cause, Doiron said he suggested the city call in the province's auditor general and was told "they don't get involved" in municipal issues.

The auditor general's position

In fact, auditor general Darren Noonan told CBC News he believes his office does have the authority to investigate municipal finances under the Audit Act because municipalities receive provincial funding.

But Noonan said his office is too busy right now with a special audit on the province's COVID-19 spending, adding that its main mandate "is to hold [the provincial] government accountable."

At the same closed-door meeting, Doiron said councillors voted to dismiss Kelly without knowing how much it would cost city taxpayers in severance. He said he asked but was provided with no answer.

He maintains if an investigation had been launched — and found Kelly had acted inappropriately — the chief administrative officer might have been fired with cause, and the city wouldn't have been on the hook for his severance package.

"I have residents in my ward saying, 'Please don't give our tax money away,'" Doiron said. "And lo and behold, that's what we did."