Northeast council criticized for allowing staff and families to do business with town

LITTLE CURRENT— The recent disposal of two properties by tax sale by the Northeast Town has become a topic of speculation in the municipality after it became known that the successful bidder for the properties involved the spouse of a town employee. Despite allegations of the sale being a conflict of interest, both the employee and the Northeast Town mayor maintain that there were no wrongdoings and that the usual tender process was followed.

“Earlier this year, the Northeast Town advertised specified real estate for sale by tender under the applicable tax sales procedure,” said Little Current businessman Jim Bousquet, who had also bid on one of the two properties in question. “Tenders were stated to close on June 24, 2015. On or about July 10, unsuccessful tenders were notified by letter from the Northeast Town that the highest bidder had now completed the transaction and the deposits of competing tenders would be returned.”

“On June 18, 2014, six days prior to the close of the tendering, an Ontario corporation, 1924471 Ontario Inc., was incorporated and on July 15 the two tax sale properties were registered to the successful bidder, 1924471 Ontario Inc.,” Mr. Bousquet explained.

Mr. Bousquet told The Expositor that he looked into the corporation and that the Ontario Ministry of Government Services records confirmed that 1924471 Ontario Inc. is an active Ontario corporation with two directors and two officers: Pamela Margaret Williamson, director and president, and David Albert Williamson, director, secretary, treasurer and vice-president.

“David Albert Williamson is the chief administrator officer (CAO) of the Northeast Town,” continued Mr. Bousquet, who noted that he has hired a lawyer to look into the matter. “And to my knowledge, at no time were other bidders notified that a private corporation in which the Northeast Town CAO was an officer and director would be participating or had participated in the bidding.”

“I’m not bitter I didn’t get the tender,” added Mr. Bousquet, “I’m bitter about the process. It appears to be a conflict of interest. It has the perception of wrongdoing and invites criticism whether it was a clean process or not.”

“I firmly believe that there should be a policy in place preventing this (town staff or their spouses from bidding on public tenders) from happening in the future for all town staff,” concluded Mr. Bousquet. “The process needs to get cleaned up.”

The Expositor spoke with Mr. Williamson who stated that there was no conflict of interest regarding his actions.

“My wife, Pam Williamson, was at a point in her career when she was eligible to withdraw some of her pension funds,” explained Mr. Williamson. “She chose to withdraw funds and set up a corporation as a vehicle for investment. The purpose of the company (1924471 Ontario Inc.)  is specifically for the president, Pam, to invest in various properties or ventures and to be sheltered from liability. The company has the sole purpose of protecting her other assets.”

Mr. Williamson confirmed that his wife was the president of 1924471 Ontario Inc. and that he was the vice president and also noted that their son, Adam Williamson, and Ms. Williamson were the two shareholders of the company.

He said that Ms. Williamson, through her company, was interested in bidding on two properties that were advertised for sale by tender from the Northeast Town.

“She went through an open tender bidding process and the company (1924471 Ontario Inc.) was the successful bidder,” Mr. Williamson said. “It was an open and transparent bidding process.”

As to allegations that his role in the company and its participation in a public bidding process was a conflict of interest, Mr. Williamson responded, “The CAO or any town employee is not precluded from participating in public processes in the Northeast Town.”

Mr. Williamson said that there is nothing preventing a CAO or town employee from participating in a public process under the Ontario Municipal Act, but that some municipalities have conflict of interest policies for employees or restrictions built into employee contracts.

“There is no policy in this municipality preventing employees from participating in public processes,” said Mr. Williamson. “In some municipalities there is a section in the CAO’s employee contract restricting participation in certain processes, but that does not exist in my contract.” The Expositor reviewed Mr. Williamson’s contract and confirmed this point.

“It was not a requirement, but in the interest of perception, I wanted to distance myself completely from the tender process of these two properties,” continued Mr. Williamson. “I completely excused myself from any involvement in the tender process and wouldn’t receive bids, would not discuss the tenders and was not even in attendance two days prior to the closing of the tenders. I was present the day tenders closed, but stayed away from the process. The town treasurer, Sheryl Wilkin, is responsible for the tender process, but has the ability to delegate authority and did so, for these tenders, to town employee Brenda Hawke as Ms. Wilkin was away.”

The Expositor contacted the Ministry of Municipal Housing and Affairs (MMHA) and asked, “what are the restrictions and policies surrounding municipal CAOs according to the Municipal Act? Do CAOs have any particular defined status that is set out by provincial statute?”

“Under the Municipal Act (section 229), municipalities may appoint a chief administrator officer who shall be responsible for exercising the general control and management of the affairs of the municipality for the purpose of ensuring the efficient and effective operation of the municipality, and performing such other duties as are assigned by the municipality,” responded Praveen Senthinathan, MMAH senior issues and media specialist.

The Expositor also asked, “What are the statutory prohibitions for staff? What is the bidding process for tenders?”

“Under the Municipal Act, municipalities must have policies in place regarding the sale and disposition of land,” stated Mr. Senthianthan. “Municipal staff codes of conduct and policies are drafted and enforced locally.”

Northeast Town Mayor Al MacNevin told The Expositor that the municipality does not have a code of conduct for employees.

“Years ago, council looked into developing a code of conduct or conflict of interest policy for employees, but decided not to do it,” said Mayor MacNevin. “The feeling from council at the time was that it would be quite costly. A code of conduct requires the hiring of a third party if any complaints are made. Council decided not to proceed with the development of a code of conduct or conflict of interest policy for employees.”

“Subsequent to conversations with Mr. Bousquet, who felt that there had been a conflict, I asked staff for a review of the process,” the mayor added. “I was assured that Dave (Mr. Williamson) was not involved in the process and that the proper process was followed. To me, no conflict has occurred. Due to the allegations of conflict, I have asked staff to review the bidding process with council and, specifically (to review), what took place in this situation.”

Northeast Town Treasurer Sheryl Wilkin explained to The Expositor the tender process for tax sale real estate in the municipality.

“When a property has gone for registration, after a one-year period it is advertised for tax sale,” Ms. Wilkin told The Expositor. “An ad is placed in the Ontario Gazette for one week and a local newspaper, The Manitoulin Expositor, for four weeks advertising the tender. The closing date is approximately 30 days later. Tender forms can either be picked up at the town office or are available online. The tender form has to be submitted using the form supplied. Town employees, the ladies in the front office, receive the sealed tenders up until the closing date at 3 pm, mark the date and time received on the envelopes and file the sealed envelopes.”

“A 20 percent deposit is also received with each tender,” said Ms. Wilkin. “When the tender closes, myself or someone I delegate opens the envelopes and records the names of the bidders and the amounts bid. The bids for each property are recorded on separate forms (if there is more than one property and tenders are closing on the same day). The unsuccessful bidders receive a letter notifying them that they were unsuccessful and their cheques are returned. We retain the cheques for the two highest bids so that if the first one doesn’t go through, then the property is offered to the second. A letter is sent out to the successful bidder along with the amount needed to complete the sale. The money must be received within 14 days. Once the sale is finalized, the second highest bidder is sent a letter notifying them that they were unsuccessful and their deposit is returned. This is all governed under the Municipal Act, municipal tax and sale rules.”

As to enquiries to the Northeast Town mayor on whether council would be revisiting the development of a code of conduct or conflict of interest policy for employees, Mayor MacNevin responded, “not that I am aware of. But, as I said, I have asked staff to review the bidding process with council.”