PEI·CBC Investigates

Documents on Charlottetown CAO given to province in August 2019, says city councillor

P.E.I. Communities Minister Jamie Fox should have all the information necessary to order an investigation into financial and administrative concerns raised regarding Charlottetown’s chief administrative officer, says a city council member.

Cabinet minister Jamie Fox has said he has received no complaints

Communities Minister Jamie Fox has called the controversy over Peter Kelly a human resource issue. (Province of P.E.I.)

P.E.I. Communities Minister Jamie Fox should have all the information he needs to order an investigation into financial and administrative concerns raised regarding Charlottetown's chief administrative officer, says a Charlottetown council member.

Bob Doiron says he provided more than 100 pages of documents related to CAO Peter Kelly to the province in August 2019, including a letter in which the former deputy CAO for the city, Scott Messervey, said he believes he was fired by Kelly in retaliation for having raised the concerns.

Kelly wrote a letter to Messervey saying he was being fired because of his interactions with city staff and some members of council, who felt the accountant was "looking for errors" rather than working with them to meet the city's goals.

In the letter sent to council after he was fired in January 2019, Messervey outlined 18 specific concerns with the city's financial administration and cited examples where he said he believed the city was operating in violation of P.E.I.'s Municipal Government Act. CBC has not verified those allegations.

Coun. Bob Doiron believes his complaints about Peter Kelly in 2019 led to his colleagues sanctioning him. (Sarah MacMIllan/CBC)

The letter also said a complaint was being filed under the terms of the city's Fraudulent or Dishonest Conduct and Whistleblower policy.

On Tuesday, Communities Minister Jamie Fox told CBC News his office had never received the letter.

On Wednesday, a spokesperson for his department said in an email that "given the complexity of the situation, changes in senior staff, and that these claims span over the course of years, staff in the department are now reviewing all documents received concerning the City of Charlottetown."

'Nothing illegal here'

Doiron said he provided the letter and other documents to the Office of Municipal Affairs in August 2019 in an attempt to get the department to investigate Messervey's concerns.

"I'm certainly not an accountant," Doiron said. "But I brought [the concerns] to the government, and they basically said, 'Well, you'll have to work it out yourselves...' 

"Who am I supposed to go to? I can't go to the mayor. I can't go to the CAO."

Peter Kelly has been CAO of the City of Charlottetown since 2016. (Steve Bruce/CBC)

Among the concerns Doiron said he raised with provincial officials, all taken from Messervey's January 2019 letter to council, were allegations that: 

  • Kelly authorized millions of dollars in capital cost overruns that Messervey believed required council approval;
  • There were a "large number of material errors" in the city's financial statements;
  • That in some cases tendering rules were not followed.

"If you find nothing wrong and everything's running well, then my concerns have been answered," Doiron said.

"But they didn't do that, and the concerns are still there to this day."

He said provincial officials told him they needed time to go over the documents. Then he met with three officials in November 2019. Fox was not among them.

Eventually he said he received a phone call telling him: "'There's nothing illegal here.' And then it was over."

Doiron believes his complaints about Kelly led his colleagues to later sanction him

'Why does your story change every time?'

In the legislature Wednesday, the Opposition seized on various accounts Fox has given in the past week over whether his department had received any complaints regarding the City of Charlottetown, and what it did in response.

Green MLA Steve Howard accused Communities Minister Jamie Fox of changing his story. (Province of P.E.I.)

Last week, Fox said a third-party review had been conducted concluding there had been no breach of the Municipal Government Act, and that conclusion had been shared with the city. But both Doiron and Mayor Philip Brown said they had never heard of any such review.

On Tuesday Fox characterized the review as an outside legal opinion.

"Why does your story change every time you speak about this investigation?"  Green MLA Steve Howard asked the minister.

Fox has continued to characterize the concerns raised around city hall as a human resources issue for councillors to resolve on their own, but he also hasn't ruled out a possible investigation from his department.

"We must remember that we have duly elected individuals by the City of Charlottetown who have been trusted to follow the bylaws and the rules and regulations of the city under the MGA," Fox told the house Wednesday.

Charlottetown Mayor Philip Brown says the city is going through a process to reach a resolution on the Peter Kelly issue. (Steve Bruce/CBC)

"I don't understand why the Opposition does not trust the mayor and council who had been elected to handle HR matters and operations within the City of Charlottetown."

'Going through a process'

Howard told the legislature that municipal taxpayers will be on the hook if Fox fails to launch an investigation before "the CAO of Charlottetown has sailed into the sunset with his six-figure golden handshake."

Last week, sources told CBC that negotiations were underway around a severance or retirement package for Kelly, but even members of council have said they've been provided with no information from the city.

In an email Tuesday, Mayor Philip Brown reiterated what little he had to say the week before regarding the future of Kelly as the city's CAO.

"We're currently going through a process to determine the best way forward for all affected parties," the mayor said in the statement.

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