In this episode, I discuss the December 23, 2019, dismissal of the City of Chestermere's City Council, and the findings from an independent financial inspection conducted by Deloitte, Canada's largest professional service firm, into the City's finances.
00:00:00.000As some of you may know, and as the residents of Chestermere are very much aware, at my direction, an independent third party has been working these last few months on an inspection of the City of Chestermere's financial management.
00:00:13.800Back in January, we appointed Deloitte, Canada's largest professional service firm, to inspect the financial management of the City of Chestermere during a very specific time period from October 18th, 21, to December 4th, 23.
00:00:27.200This is the period from which the most recent municipal election in Chestermere, in October 21, to the moment in December 23, when I made the very difficult decision, but well-informed one, and deliberate decision, to dismiss four members of Chestermere's City Council, along with three Chief Administrative Officers.
00:00:47.700We have provided a significant amount of information over the past two years regarding the previous municipal inspection into the governance of the City of Chestermere.
00:00:56.340Information regarding that municipal inspection, including information about the December 2023 dismissals, can be found on our website.
00:01:04.300You may recall that in March 2023, Minister Rebecca Schultz, who held the role that I currently do, from October 2022 until the election last spring, issued 12 binding directives as a result of the previous municipal inspection,
00:01:20.060and ordered an official administrator to continue to supervise the management and operations of the City of Chestermere.
00:01:25.600As part of that supervision, the City was required to provide certain financial reports to the official administrator and to the Minister.
00:01:34.400While the required reporting was not always provided, after reviewing the documents that were provided, as well as the reports to me of the official administrator,
00:01:43.000significant concerns arose regarding the City's financial management.
00:01:47.320At the time of the December 2023 dismissals, including in letters to all residents of Chestermere, I committed to undertaking a new inspection focused on the City's financial management
00:01:58.160and to sharing the results publicly in advance of a by-election.
00:02:04.180On January 17, 2024, I ordered an inspection into the financial management of the City of Chestermere and appointed Deloitte as the inspector.
00:02:15.020The results of the financial inspection are in, and we are releasing them today, as promised.
00:02:23.520The inspection was conducted from January 17 to May 3 of this year.
00:02:28.840More than 10,000 items of correspondence were reviewed, and the inspector conducted more than 1,000 tests of financial transactions,
00:02:38.200completed 80 tests of financial and information technology controls, and conducted more than 30 interviews.
00:02:47.540It was certainly a robust and thorough inspection, and the findings make it clear that during the time period from the last municipal election to the dismissal on December 4,
00:02:58.980the City's finances were managed in an irregular, improper, and improvident manner.
00:03:07.980The report identifies gaps in processes and financial controls, as well as more recent instances where during the period of this review of how finances were not managed in compliance with the Municipal Government Act.
00:03:21.220The report provides many, many examples of this, but I will highlight just three.
00:03:28.080First, regarding financial policies and controls, the report showed that the City did not have appropriate policies or tools in place to log transactions or to protect data.
00:03:40.200Well, while the report does not necessarily lay blame the former Council and administration for this deficit,
00:03:50.040those charged with oversight did not take steps to address it, which I believe contributed to the City's overall dysfunction.
00:03:59.740Second, regarding financial transactions, the inspector tested 565 Council expenses
00:04:08.780undertaken by the Mayor and Councillors and found that one of them was submitted with full, documented, reviewed, and approved approval in accordance with City policy.
00:04:26.140Third, regarding financial governance, the report notes instances where Council and administration incurred costs without passing a resolution or by-law
00:04:34.920or including those expenditures in the City budget.
00:04:37.640A number of these instances were directly tied to the former Mayor assuming the powers, functions, or duties assigned to the Chief Administrative Officer,
00:04:46.400which is very specifically prohibited under the Municipal Government Act.
00:04:52.140In one such incident, the report notes that the Mayor executed an agreement to sell municipal land without an approved resolution from Council,
00:05:02.040and then directly dealt directly with legal counsel on the terms of that sale.
00:05:08.140As I say, these are just three examples of the 31 findings noted in the Financial Inspection Report,
00:05:14.680which reflect that Chestermere's finances were indeed managed in an irregular, improper, and improvident manner.
00:05:21.180I would encourage everyone interested, especially Chestermere residents, who deserve this knowledge,
00:05:28.400to visit the Government's website and read the public report in full.
00:05:33.140But I can tell you it's clear from this report that appropriate checks and balances required to protect the interests of the public were lacking.
00:05:41.320Checks and balances that citizens deserve from their government in the stewardship of their tax dollars.
00:05:46.480The report also confirms instances where Council and administration failed to uphold their responsibilities under the Municipal Government Act.
00:05:54.720Based on the findings of the inspection, I have issued another ministerial order, which issues two binding directives for the City of Chestermere.
00:06:04.020The Council must discuss the City's plan to address each recommendation in a public meeting,
00:06:10.340approve the plan by Council resolution, and send a copy to my office.
00:06:14.680The second directive is for the current CAO to post the inspection report on the City's website
00:06:21.420and make print copies available upon request until the first directive has been met, to my satisfaction.
00:06:28.820I encourage residents to read the inspection report carefully to understand the significant concerns
00:06:35.720with how their municipality was being managed prior to the dismissal of some former Council members and the Chief Administrative Officers.
00:06:42.920It is my sincere hope that the inspection report will inform a common understanding of the work that needs to be done
00:06:51.140by the City to implement the necessary changes to policy, procedure, and practices
00:06:57.640that are needed to establish good stewardship of Chestermere's finances.
00:07:02.860I will share this hope in a letter that I will be sending to all Chestermere residents,
00:07:09.320along with my encouragement to read the report.
00:07:12.920The City of Chestermere will soon be calling a by-election to address the vacancies that it has currently on its City Council.
00:07:21.520The by-election will be run by the City without the involvement of the Provincial Government.
00:07:28.540Residents of Chestermere should stay tuned to the City for details about the by-election date
00:07:34.000and be prepared to exercise their democratic rights, either as voters or, if they choose, as candidates.
00:07:43.880Before I conclude my remarks, I would like to reiterate one very important point.
00:07:49.140At all times throughout this municipal inspection process,
00:07:51.960it has always been the goal of Municipal Affairs to restore good governance to the City of Chestermere.
00:07:57.680The residents of this community deserve to have faith in their local government,
00:08:02.000and our commitment to this goal has never wavered.
00:08:05.160This has been an unfortunate chapter in Chestermere's history,
00:08:08.980but now we have delivered clarity about financial management
00:08:12.840that the citizens of Chestermere rightfully deserve.
00:08:17.120Council quorum will be restored in short order following a by-election.