City of Vaughan answers deficit allegations by ratepayers' lawyer

Torontosun.com
October 15, 2018
Sam Pazzano

The city of Vaughan has responded to accusations that its city councillors ran unlawful deficits of more than $100 million a year since 2014 and that councillors misapplied funds to cover those deficits.

“The City denies there is any merit to the allegations ... the City therefore will not be commencing a court action,” lawyer John Mascarin wrote in a letter to Toronto lawyer Robert Karrass, who represents a group of Vaughan taxpayers who made the allegations.

“Should your clients nonetheless choose to advance the allegations, we expect that the City will pursue those available remedies,” Mascarin wrote.

“It is interesting to me that the city of Vaughan as a distinct entity from the Members of Council would be so quick to deny the allegations without any attempt to investigate the same,” wrote Karrass in response.

“I am shocked the city would take this position,” said Karrass. “This is about the public interest and if the city is acting in that public interest, then why wouldn’t it welcome an independent auditor or provincial regulator to look at this?”

Karrass said he’s awaiting instructions from his clients.

“We’ll either bring the action to court or continue to keep channels open with the city of Vaughan to bring transparency and accountability to the city’s finances,” Karrass said.

Karrass alleged that Vaughan hiked water rates for the past four years and amassed a cumulative surplus of $217 million.

Instead of returning that money to residents, city officials improperly used the cash to cover departmental deficits, something the Municipal Act prohibits, Karrass suggested.

Mayor Maurizio Bevilacqua said the group’s accusations are meritless and the city’s finances” are certified through a third-party audit. This helps ensure financial accuracy and integrity.”

Frank Miele, Vaughan mayoral candidate and the city’s former commissioner of economic development for 17 years, has examined the city’s consolidated statements since 2010.

“This is fake accounting,” said Miele, who has 35 years experience in municipal government and now teaches municipal finance at Seneca College.

“Annual revenues from water and sewer billings are partially used to pay down the city’s annual operational cash deficit,” said Miele.

“Yet there’s still an annual cash deficit averaging $46 million since 2010.”

“The public has limited time and resources to analyze these audited financial statements,” said Miele.

“Has the province ever reviewed the city’s financial statements, much like the Ford government that discovered a $15-billion deficit?”