Council divided on BIA financial investigation

Jeff Helsdon, Local Journalism Initiative Reporter

Tillsonburg council was divided on how to deal with a staff report on the Business Improvement Association finances tied to an anonymous letter sent to businesses, but was united in response to a request to pay the association’s legal fees.

The May 26 agenda contained five items associated with the BIA: a letter from the BIA board of management requesting the town pay legal fees, a letter from the BIA board of management about the anonymous letter, a letter from BIA board member Michael Bossy requesting support, a letter from Shane Curtis about the BIA boundary expansion proposal and a staff report on BIA finances in connection with the anonymous letter.

The staff report tied to the anonymous letter, which alleged possible financial fraud, was the most contentious. In his report, treasurer Renato Pullia noted town policy does not include anonymous complaints, but “given that the Downtown Tillsonburg Business Improvement Association Board of Management (the “BIA”) is under the governance of council, an update to council on this matter is deemed appropriate.”

Pullia ssaid BIA finances are audited, and the nature of its business involves accepting cash transactions. In a discussion with the auditor, he was told “the risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error.”

The report concluded by giving council the option of accepting the BIA letter “that it has reviewed its policies and procedures and found no evidence of misconduct, and that it considers the anonymous letter to be without merit” or to request the board of management provide further information on how it satisfied the letter was vexatious. It was suggested that this could include requesting proof of the cash transactions from the six businesses listed in the letter and providing the auditor with the BIA’s record of the cash transactions, if the transactions occurred and records exist. If the businesses have records of the cash transactions, but the BIA doesn’t, the report suggests that a forensic audit of the BIA's finances be completed.

“Based on the report, we need to limit the risk to the municipality and hopefully that if there is an investigation, it will put the rumours that are out in the public to bed and quell them,” said Coun. Chris Parker.

Coun. Kelly Spencer pointed out the BIA board has two CPAs and a financial advisor.

“They are professionals in our community,” she said. “They have confirmed they have investigated and confirmed checks and balances. They have confirmed they’re audited independently annually. This is a response from an anonymous letter sent to hundreds of people that seemed more, quite frankly, like a smear campaign than seeking truth. If there was merit, I don’t know why they wouldn’t have signed it.”

She pointed out there were council members who hadn’t previously seen the letter.

“We have a policy about anonymous complaints and the BIA board is packed full of capable businesspeople, several of who are, as I stated, in finance,” she said. “I’m not going to be questioning the professionalism of this board and the good people on it.”

Coun. Bob Parsons asked about the cost of a forensic audit and how it would be funded.

Pullia said it’s difficult to know, but this depends on the initial findings.

Mayor Deb Gilvesy emphasized this is a final step.

Coun. Pete Luciani said he supports asking the board of management to contact the six alleged businesses who had cash transactions and if the BIA had records of these transactions to provide them to the auditor, but not going to a forensic audit without coming back before council. Parker, who had initially moved the motion for the investigation, agreed to the change.

Deputy Mayor Dave Beres questioned the cost of the investigation for an anonymous letter.

“I would feel better on this if we had a signed letter,” he added.

Saying she was still not in favour of an investigation, Spencer called for a recorded vote, and added, “To doubt this board is not a good look for this council. As I said, there’s two accountants and a financial analyst.”

The motion passed with Luciani, Parker, Coun. Chris Rosehart and Gilvesy voting for it. Spencer, Beres, and Parsons voted against it.

Request for legal fees to be paid

The BIA also submitted a letter to the council requesting that legal fees be paid. The letter asked that council “pays all current and future legal fees related to the vexatious complaints and HR matters relating to same.”

The motion presented was to accept the letter for information and request more information on the reason for the legal fees.

“I don’t know how we can vote on anything without a wholesome overview and there doesn’t seem to be any specific information that would be necessary for council to make an informed decision,” said Spencer.

Parsons also agreed the BIA should respond to the report.

Council was unanimous in requesting more information.

Letter asks for pausing the expansion

In a separate matter, local businessman Shane Curtis, writing on behalf of Jesse Goossens, Neil Crompton, Dave Martin, Andrew Burns, Kassandra McLaughlin, Tyson VanLeeuwen, John Colla, Chris Wood and Pat Buyse, asked council in his letter to pause the expansion of the BIA area.

The BIA is proposing to expand its area for the first time in 50 years, and input is open until June 10. Commercial property owners within the BIA area pay an additional tax to support BIA programs. The expansion means property owners in the larger area would pay the same fee. The proposal does not affect residential property.

Curtis raised 10 points about the proposal in his letter, ranging from the additional tax making it harder to attract businesses to the area, to diverting focus from the core, to bad timing with the economy, and the area's inclusion of warehouses and industrial lands. The main request was to “pause this expansion until full consultation takes place and a fair and transparent plan is shared, one that ensures every business has a voice and received value in return.”

Prior to the debate, Gilvesy declared a conflict of interest because her husband owns property in the proposed expansion area. She left the council chamber during debate on the letter.

With property owners in the current and proposed BIA area voting on the expansion, Beres asked if the final decision on the expansion was one council would make.

Clerk Amelia Jaggard explained, “It is a decision of this council if the objection threshold not be met.”

Parsons pointed out that the process for the expansion of the BIA area is outlined in the Municipal Act and is being followed.

“I don’t disagree with some of Mr. Curtis's points, but it’s premature in my view,” he said. “The process must take place and the results from the community will speak and then that letter may come back.”

Rosehart said there is some confusion with property owners receiving the letters, but tenants being unaware. She questioned the process.

Jaggard explained the municipality’s responsibility is to inform property owners. The Municipal Act outlines it’s then the responsibility of landlords to inform the tenants. She said the BIA fee could be paid entirely by the landlord, or divvied up as part of the rent.

Rosehart asked how this would impact residential tenants in commercial buildings.

Jaggard responded if residential tenants pay a portion of the BIA tax as tenants, they can object.

Council voted to receive the letter as information.