Former Westlock County CAO Peter Kelly breached his duties and is liable for damages, according to an opinion from the municipality’s lawyer.
In a July 13 eight-page internal and confidential letter obtained by the Westlock News, a legal opinion from Reynolds, Mirth, Richards and Farmer Barristers and Solicitors outlines a dozen breaches by Kelly, including breaches of the Municipal Government Act, during the Horizon North deal.
“There were a number of unusual procedures followed by Mr. Kelly with respect to his dealings with Horizon North and the Horizon North project,” the letter states.
“From our review of the relevant documents and information gathered during the investigation by Westlock County, we conclude that Mr. Kelly has breached his duties to Westlock County as CAO.”
Breaches include selling the lots for below market value, spending unbudgeted funds, withholding information from council, continuing to deal with Horizon North after his tenure as CAO and failing to maintain appropriate paperwork.
At the advice of interim CAO Pat Vincent, acting reeve Don Savage did not comment on the report.
“A legal opinion was obtained. It’s very unfortunate from my perspective that it got out into the public, we’ll have to deal with that issue,” Vincent said.
“I’ve consulted with municipal solicitors in terms of that already. Until I get further advice from them, we’re not in a position to comment.”
Div. 4 councillor, and former reeve, Bud Massey did not respond to questions regarding the legal opinion and deferred any questioning to Savage. While the documents say Kelly is liable for damages to the county, which total approximately $194,000, the likelihood of a successful prosecution is estimated at less than 50 per cent and is not advised by the lawyers.
“An action of this nature could easily take a number of years to proceed to trial, at a significant expense,” the letter states.
“While the county has been able to deduce much of what occurred, the county does not have an original Horizon North file and Mr. Kelly may present a very different version of events.”
If the county does choose to proceed legally, the Limitations Act means the claim would have to be filed prior to the spring of 2017—two years of the date the county knew or ought to have known about the of the claim against Kelly.
If prosecuted and found guilty, Kelly could face a fine of up to $10,000 and a year in jail.
On June 14, councilors learned the county was on the hook for over $202,000 for funds they wouldn’t recover from the deal to prepare an eight-acre industrial park lot for Horizon North.
Investigation revealed Kelly approved more than $375,863 worth of work to prepare the lot and never brought the matter to council for approval. This was in breach of Section 248(2) of the MGA, which requires council approval for any expenditure of a non-budgeted amount of $10,000 or greater.
County expenses on the site, including recent improvements and original development costs total $465,000, while current market value of the site was assessed at $263,000. Council was forced to write-off the difference.
