Peter Kelly will continue in his role as CAO of Charlottetown, says Charlottetown Mayor Clifford Lee. The decision comes after a report from Alberta concluded that Kelly acted outside his authority while working for a municipality there.

The report from the Alberta Department of Municipal Affairs regarding his activities while employed at Westlock County was released late last month.

Charlottetown Mayor Clifford Lee

The city does not have a legal justification for dismissal or discipline, says Charlottetown Mayor Clifford Lee. (CBC)

In an emailed statement, Lee said council met twice with a legal advisor to discuss the report.

"The report out of Westlock provides no justification to Charlottetown for dismissal or disciplinary action that would be supported in the court system, according to the legal guidance obtained," wrote Lee.

"The majority of Council did not wish to expose tax payers to a potential lawsuit that legal advice suggests would not be successful in defending."

Peter Kelly has called the report "a selective witch hunt" and said the actions he took in Westlock County were approved by council there. He also said he did what he believed was in the best interest of the county.

Commenting on Friday Lee said, "There's no foundation to the report, and that's not my opinion, that's an opinion that was shared with council by legal advice."

Lee added, "I'm not going to defend what happened in Westlock County ... because I wasn't there ... All I can tell you is that based on the best advice that the City of Charlottetown has received, that this is the decision of the majority of council."

'All of this could have been avoided'

Lee said, while he's seen criticism on social media, "People who've met Mr. Kelly, people who know Mr. Kelly think he's doing a great job for the citizens of Charlottetown."

Council passed a resolution Thursday night by a 7-2 vote. Lee said councillors Bob Doiron and Jason Coady voted against the motion, while Mitchell Tweel did not attend the meeting.

Doiron told CBC News council should be terminating Kelly's employment, even if that means negotiating a severance package.

"I'm not saying Mr. Kelly can't do a good job. It's just the background there ... it's coming out. I think the city, the residents ... you know, they deserve better," Doiron said.

In a statement Coun. Coady wrote, "the resulting distractions have not been in the best interests of our City.  All of this could have been avoided." 

With files from Kerry Campbell