Adam Prudhomme
Editor
The Town of Greater Napanee’s tax sale by-law will be getting an overhaul following a report published by KPMG that identified several policy gaps.
Greater Napanee council voted to begin the process of constructing a new policy after hearing KPMG’s report at the Jan. 26 council meeting, which was held virtually via Zoom and broadcast on the town’s YouTube channel.
Council also voted to receive KPMG’s report and to retain the firm to take a closer look at ‘control breakdowns’ that were noted in the sale of three properties-32 Oke Rd, Heritage Park and 313 Belleville Rd. A further review of those properties was one of 12 recommendations made by KPMG following their examination of 10 properties that were sold by the town over the last decade.
KPMG put together the report at council’s request after public outcry following the sale of 32 Oke Rd to former Greater Napanee mayor Gord Schermerhorn. A tender process was held for the property in 2019, with only one bid, for $10,100, received on time. About three months after the property was purchased from the town, it was sold again for nearly 10 times what it was purchased for from the town.
“KPMG was engaged by the Town of Greater Napanee to undertake a review of the property sales process for the previous 10 year period,” Bruce Peever, a partner at KPMG explained in advance of delivering the report to council. “The overall objective of the project was to perform a complete and thorough review of properties sold over the last 10 years, identify transactions that require further study and present our findings to management and council. Specific objectives included the identification of policy gaps, the selection of property transactions and a detailed analysis.”
Though the report outlined flaws in the town’s current process, it was also noted that the by-law was at par with those of surrounding communities such as Loyalist Township, Quinte West and South Frontenac. Among the recommendations to apply going forward were to include more information when publicly advertising a property and advertised for at least two weeks before closing, that council should create a consistent method for obtaining appraisals and that appraisals of properties should be maintained on file.
“A strong internal controls framework and preventative controls can identify process inefficiencies and control breakdowns,” said Sana Malik, senior manager at KPMG, who presented the report to council. “We’re recommending developing a guide and a checklist to support the details of the surplus by-law. The by-law should also be updated to reflect the recommendations made in this report and other recommendations, as management deems necessary. Also the town should consider using the pilot program of using a real estate agent for disposition of town properties and a clear direction should be provided as to the use of funds following the sale that is aligned with the town’s strategic priorities.”
Councillor John McCormack made the successful motion to accept the report and to hire KPMG to review the three highlighted properties in depth.
“I’m doing this because I believe this report is not complete and there’s additional information that I’m interested in getting,” said McCormack. “I also understand from conversations that I’ve had that we would have to receive this information in closed session.”
Malik says those properties were highlighted because they had four or more ‘controlled breakdowns’. A follow up report on those properties is expected to take two to three months to compile.
“This investigation was excellent, but it isn’t complete,” said councillor Bob Norrie. “We never finished a case until the investigation is complete. So we have to have these questions answered for transparency, for the public. I fully support this, as much as I hate spending money. They’ve done an excellent job so far and we should carry on and find the final answer and get our five Ws all answered.”
Councillor Terry Richardson agreed.
“This unfortunately just isn’t quite finished,” said Richardson. “There’s some information with some respect to some breakdowns that I think we just have to clean up. These breakdowns may be very innocent. They really could be. Or they could be far more nefarious than we think. But they could be very innocent. I think it’s important that we look at why we had the breakdowns and we ensure that the breakdowns don’t happen again and we move forward.”
Mayor Marg Isbester complimented the report.
“It has been many good and useful comparisons and suggestions,” she said. “I also feel that the properties chosen were the type that would compare the many type of land deals that municipalities like us are up against on a regular basis. I also like the fact that our neighbouring communities struggle to have a perfect by-law as well.”
Isbester also revealed that she was interviewed as part of KPMG’s investigation.
“On Page 36 you refer to and I quote ‘it was revealed that from January through April in 2019 a local developer, who has worked closely with a relative of council member, that authorized the tender, was inquiring regularly on the status of Heritage Park to purchase.’ Can you tell me who was interviewed that gave you that information?’’ Isbester asked Peever, who responded he couldn’t reveal any names. “That’s ok, because I can tell you. Because it was me. I have no qualms about telling you because I think with our interview the very first thing that I did was I wanted to make sure that you were very aware of relationships with actually both my sons, because 37 Dundas has an involvement with my other son, and I revealed that very quickly with you. Please don’t take that as a criticism. But it makes me look pretty bad, and I’m sure I’ll get lots of flak over that statement.”
“My desire as mayor is that everything that we can possibly bring out of the negotiations and closed session and discovery of this becomes public knowledge,” Isbester added.
Council was unanimous in supporting the motion to further investigate the three properties. The exact cost of the second investigation is yet to be determined. KPMG secured the tender to conduct the first investigation with a bid of $30,560.
“This council and past councils has never had a good, true vision of how to put themselves out on the market and be competitive,” said Isbester. “It’s always been reactive instead of proactive. If we are going to use KPMG further, and it looks like that is the direction that council is going, then I would want something that would be easily updated, that isn’t going to cost us an arm and a leg and I’d love to see it come under three months but I realize if you’re going to do it, you need to do it properly. I just think that we need more recommendations and more guidance to make sure that we are doing what’s right not just for the residents now, but for the residents in the future as well.”
-Greater Napanee CAO Ray Callery gave council an update on the ongoing OPP contract negotiations. The town has held off on signing a new contract while it waits for the province to rule on whether Greater Napanee has been overcharged due to OPP staffing costs relating to Quinte Detention Centre.
Callery said the town had a ‘productive’ meeting with Ontario solicitor general Sylvia Jones and plans to establish a follow up meeting with the solicitor general’s office as well as representatives from the OPP.
“One of the key points that came out of the delegation is that it probably won’t be a just Greater Napanee solution,” said Callery, noting a decision will likely take some time. “There’s an intent to try and make sure there’s a solution that works across the province.”
In the meantime, the OPP and the town will continue to operate under the previous contract as long as there is meaningful discussion on the matter going forward.