Nova Scotia·Updated

Mayor apologizes for concert scandal as CFO leaves

Halifax's mayor said Friday that he's sorry about the concert cash scandal as another top official stepped down
Taxpayers have footed the bill for concerts in Halifax over the past three years. (CBC) (CBC)

Halifax's mayor said Friday that he's sorry about the concert cash scandal, as another top official stepped down.

"We apologize to the public for having this [occur] and we'll make sure it doesn't happen again," Peter Kelly told CBC News on Friday.

The apology follows a scandal that left taxpayers footing a bill of $359,000 because the promoter of last summer's concerts on the Halifax Common could not repay all of $400,000 advanced by the city.

Halifax Chief Administrative Officer Wayne Anstey stepped down Thursday over the scandal. On Friday, another top official announced she was leaving. Chief Financial Officer Cathie O'Toole said she was going to take a post with Halifax Water Commission.

O'Toole told CBC News her decision had been made before the concert issue became public, but said the scandal had played a role.

"It only served to illustrate to me that [the] decision that I was leaning towards was correct, because it certainly has been a stressful last couple of weeks," she said.

O'Toole, who oversaw the city's finances, said she only found out about the $400,000 advance on March 3 when Anstey told her they had a problem. "It was a shocker, for sure," she said.

She said she should have been involved earlier in the process, as it was her job to handle such transactions, and that the situation could have been avoided.

"Hindsight is 20/20 for everybody, I guess. I think a major role of any finance director is trying to keep people out of trouble, essentially, by making sure they're working within policy and rules," she said.

O'Toole's last day on the job is April 9.

TCL head thought advance was unusual

Meanwhile, the head of the provincial Crown corporation that gave money to a Halifax concert promoter over the past three years says he thought it was unusual to be asked to advance the money.

Scott Ferguson, president and CEO of Trade Centre Limited, said payments began in 2008 when country singer Keith Urban performed on the Halifax Common at the Country Rockfest event and again in 2009 for a KISS concert.

When he received the request in 2010 from Anstey, Ferguson said he told the chair of the Trade Centre board of directors as well as the deputy minister of economic development about it.

"I was told at the time that it was done with full disclosure and in discussion with the mayor, so I looked at the authority from the CAO's office and the mayor's office as being sufficient authority," Ferguson told CBC News on Friday.

"We were holding the ticket proceeds, as we always do until the show gets settled, and the ask really was to advance — the city was planning to advance some funds to Power Promotions for working capital during the show or during the weeks leading up to the show."

But the $400,000 given last year was not backed by ticket sales.  An official with Trade Centre told CBC News earlier this week Anstey provided written authority for advancing that money, because the city was making such an unusual request.

Paid attendance figures released by Trade Centre Ltd. reveals that a series of concerts on the Halifax Common between 2008 and 2010 never sold the number of tickets forecast by the promoter.

Concert Attendance figures from Trade Centre Ltd.

2008 Country Rockfest                  paid attendance of 11,853

2009 Paul McCartney                    paid attendance of 26,504

2009 KISS                                       paid attendance of 21,402

2010 Country Rockfest                   paid attendance of 10,009

2010 Black Eyed Peas                   paid attendance of 8,362

All of the advances over the past three years are a departure from usual practices and explain why regional councillors knew nothing about the money.

Usually, a cheque from city hall requires the signatures of two senior administrators — such as Anstey, and one other senior civil servant.

Then it goes through the finance department, so others are aware of it. 

In all, taxpayers in Nova Scotia have lost $659,000 dollars over the past three years on concerts. The promoter has not repaid a $300,000 loan from the provincial tourism department for a concert by Paul McCartney in 2009.  The rest is owed to the city from the concerts last year.

Mayor Kelly said he does not plan to step down over the controversy and an ongoing investigation by HRM's auditor.

On Thursday, Anstey announced his immediate resignation a day after saying he would stay until the end of June.

In 2008, HRM advanced Power Promotional Events Inc. $950,000 through its Metro Centre account in advance of the Keith Urban Country Rockfest concert. The loan was repaid.

In 2009, the province of N.S. guaranteed a $3.5 million payment to Power Promotional Events for a Paul McCartney concert, which was repaid through ticket sales.

The Province through the Department of Tourism also provided a $300,000 grant and $300,000 repayable loan to Power Promotional Events Inc. The loan was not repaid, leaving taxpayers on the hook.

In 2009, Power Promotional Events Inc. received a $2.4 million cash advance from HRM to promote the KISS concert on the Halifax Common. It was through the Metro Centre account and the advance was repaid in full from ticket sales.

In 2010, HRM advanced Power Promotional Events Inc. $1.8 million through the Metro Centre account for working capital for the Black Eyed Peas concert. That amount was fully repaid.

Due to flagging sales, two subsequent cheques for a $400,000 grant were issued by HRM in the days leading up the concert, and HRM was left holding the bag for $359,550 that was not repaid.

Journalists were refused access to those figures while Harold MacKay's Power Promotional Events Inc. was in business. The company went under last fall.

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