Inquiry shows Collingwood residents suffered ‘real, permanent and irreparable harm’ – mayor

Collingwood Mayor Brian Saunderson

‘We will do everything in our power to ensure the Province acts on the recommendations to change the Municipal Act and the Municipal Conflict of Interest Act’

AWARE News Network

The following are Collingwood Mayor Brian Saunderson’s notes in addressing council today on the judicial inquiry by Justice Frank Marrocco:

It has been 2 weeks since Justice Marrocco released his report on November 2 and because this is the first Council meeting since then and the first opportunity for this Council to comment publicly on the report, I will provide my comments and then give each Councillor an opportunity to make any comments they have.

Justice Marrocco was appointed by the Chief Justice of the Superior Court of Ontario as Commissioner of the Collingwood Judicial Inquiry at the request of Collingwood Council in February of 2018 under Section 274 of the Municipal Act to conduct an inquiry into 2 major transactions that occurred in 2012 – 1. the sale of a 50% interest in the Town’s electric utility, Collus Power Stream, one of the Town’s largest assets, to Powerstream Incorporated, and, 2. the purchase and construction of 2 Sprung recreational facilities, the Central Park Arena and the Centennial Pool.

Paragraph 1 of the Resolution 042-2018, which I moved and supported, requests that the Commissioner inquire into, “any matter related to the supposed malfeasance, breach of trust, or other misconduct on the part of a member of Council, or an officer or employee of the Town or any person having a contract with it”

Since Justice Marrocco released his report, I have been asked 3 very important questions – What are his findings; What was the harm to our community and what are the next steps?

What are the findings

– As the Commissioner of the Collingwood Judicial Inquiry, Justice Marrocco’s findings have the same force and effect as a ruling by a Judge in a civil court case – if any party wants to dispute any of his findings, that person must apply to the Courts to have that finding overturned.

– Justice Marrocco stated in his report that it was not his mandate to find fault or assign blame. However, it was his mandate to look into the 2 transactions to see if there was malfeasance, misconduct or breach of trust.

– I want to be very clear with the residents of Collingwood – in his comprehensive and thorough report with 914 pages in 4 Volumes, Justice Marrocco makes significant and extensive findings of malfeasance, misconduct and breach of trust.

Sale of 50% interest in Collus

– Dealing first with the sale of 50% interest in Collus, Justice Marrocco found that the sale process was stained by undisclosed conflicts of interest, an unfair procurement process in which the Mayor’s brother, Paul Bonwick, shared confidential information with Powerstream throughout the process, and a lack of transparency as Council and the community were provided with false and misleading reports and information.

– Among his many findings Justice Marrocco made the following findings in Volume 2 of his report:

o That the sale of 50% of Collus was started in November, 2010, when Paul Bonwick and Ed Houghton drafted a letter to Collus directing the utility to look at options including a sale. That letter was signed by Mayor Cooper without the knowledge or direction of Council or the CAO Kim Wingrove.

o That Mr. Bonwick was retained by Powerstream to assist it with its bid to purchase the Collus shares in the winter of 2011. Ed Houghton, Mayor Cooper and Deputy Mayor were aware of this retainer.

o Paul Bonwick obtained confidential information that he provided to Powerstream during the bidding process. Mr. Bonwick obtained this information through conversations with Ed Houghton and Deputy Mayor Lloyd

o Powerstream was aware that it was receiving confidential information, that it had an unfair advantage and did nothing to disclose or stop it.

o That another proponent’s bid was $3.85 million higher than Powerstream’s – Council was never made aware of this

o The Town of Collingwood received no legal advice regarding the sale until after the winning bidder, Powerstream, had been selected and the critical terms of the sale had been negotiated.

o Mayor Cooper and Deputy Mayor Lloyd failed to act on the advice of Town solicitor, Leo Longo to have the Town retain counsel to assist with the financial and corporate aspects of the transaction

o Ed Houghton was instructing legal counsel for both the asset, Collus and the shareholder, Town of Collingwood

o On January 19, Town Council passed a by-law confirming the sale of 50% of Collus to Powerstream and authorizing the Mayor to sign any document in a form satisfactory to the Mayor to finalize the sale – two essential and standard elements were removed from the by-law – the review by the Town’s solicitors and reporting back to Council – Powerstream was involved in the drafting of the by-law.

The Purchase of the Sprung Buildings

– Justice Marrocco found that the final staff report on the recreational facilities “produced a report that described and portrayed Sprung Instant Structures Ltd. as the obvious, cost-effective choice for Council and one that carried little risk or uncertainty. Misstatements, inaccuracies and omissions in both the construction estimates presented and the discussion of the construction options led to this inaccurate representation. Justice Marrocco made the following findings about the purchase of the Sprung buildings in Volume 3 of his report:

o In April 2012, Deputy Mayor Lloyd, and Mayor Cooper with her brother, Paul Bonwick’s assistance, arranged for Mr. Houghton to become Acting CAO

o During the next 4 months Council turned away from the approved plan to purchase one large multi-use facility, and instead voted to sole source the Sprung pool and arena facilities

o Sprung representative Tom Lloyd was introduced to Paul Bonwick in the spring of 2012 and was interested in involving Mr. Bonwick in the discussions with the Town. Deputy Mayor, Rick Lloyd had recommended Mr. Bonwick’s services to Tom Lloyd.

o On July 26, 2012, Mr. Bonwick met with BLT Construction Services Inc., the company that constructed Sprung structures in Ontario. At that meeting, Mr. Bonwick offered to “promote Sprung structures to Council and the community” and in return BLT agreed it would pay Mr. Bonwick’s company, Green Leaf, a percentage of the over-all contract as a success fee.

o Approximately, 1 month later, after Council decided to purchase and construct 2 Sprung facilities, BLT paid Green Leaf $756,740.42 (including HST). o Acting CAO, Ed Houghton knew Mr. Bonwick was working for BLT and failed to advise Council or Town staff.

o Deputy Mayor Lloyd instructed Acting CAO Houghton and staff and had inappropriate influence on the drafting of the staff report. o That Acting CAO, Ed Houghton directed David McNalty to include adjustments that artificially inflated the cost difference between the fabric membrane arena option and the pre-engineered steel arena option by at least $3.39 million

o Mr. Houghton added language to the staff report indicating that the report’s estimates for a pre-engineered steel structure arena were created solely by WGD Architects despite knowing the estimates had been adjusted by Mr. McNalty

o The procurement process recommended by the staff report was changed from a competitive procurement to a sole source procurement under Ed Houghton’s direction less than 12 hours before the report was finalized

o The Town’s interest in receiving non-partisan, objective, independent advice before a multi million-dollar procurement was utterly ignored o The 2 Sprung facilities cost the Town $13,906,886.17.

What was the harm to our Community?

– Based on Justice Marrocco’s stark findings, there can be no doubt that the residents of Collingwood were victimized and abused and that our community suffered real, permanent and irreparable harm.

– The Town invested $13,906,886.17 in the 2 Sprung facilities

– The Town left $3.85 million on the table in the Collus sale by accepting the Powerstream bid which was lower than another proponent’s bid

– The staff report failed to account for the additional amounts to renovate the Eddie Bush arena between $2.1 and $3.1 million

– Taking all of these numbers into consideration, our community will have invested tens of millions of dollars in the Sprung facilities over the life of those facilities only to find ourselves back at square one, to start the process to develop a multi-use recreational facility in our community.

Next Steps

– The Judicial Inquiry has been a long and complex process for our community and a very significant investment to find out what happened during those 2 very significant transactions in 2012 – as Justice Marrocco comments many times, this Inquiry was necessary to finds out what happened because the parties who had the information and knowledge of the events in issue, failed or refused to disclose what they knew.

– This report belongs to the people of Collingwood – this Council takes each and every one of Justice Marrocco’s 306 recommendations very seriously – we have referred the report to staff for review and comment and, as we heard at the November SIC Meeting, there are many recommendations that the Town has implemented or is in the process of implementing – these we will review in light of the recommendations. For the new recommendations, we will work with staff and, where necessary, the Town’s solicitors to implement.

– We will do everything in our power to ensure the Province acts on the recommendations to change the Municipal Act and the Municipal Conflict of Interest Act

– We will cooperate and assist the OPP in every way possible in their investigations which we are told are active and ongoing.

– My commitment to the residents of Collingwood is to work with Council and staff to act on Justice Marrocco’s report in everyway and to work with our residents to rebuild the trust that has been so badly damaged by the events in 2012.

– There is work to be done and that work began on November 2 at noon with the release of Justice Marrocco’s report.

See also

Secrecy, conflicts in Collingwood deals point to holes in Ontario’s integrity rules, judge finds

Role of mayor, role of lobbyists addressed in Marrocco report