Vaughan used water funds to cover up deficits: Lawyer alleges

Thewhig.com
October 5, 2018
Sam Pazzano

A lawyer representing a group of Vaughan taxpayers is accusing Vaughan council of running unlawful deficits of more than $100 million a year since 2014 and that councillors misapplied funds to cover those deficits.

Though city officials are calling the allegations “fake news.”

Lawyer Robert Karrass, acting for the residents, maintains in a letter to city clerk Todd Coles that Vaughan hiked water raters for the past four years and improperly amassed a $217 million surplus.

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

Those councillors who voted individually or collectively to violate this act are liable for the amount applied and would be disqualified from serving on council for two years, Karrass states in his letter.

He said the city has 30 days to take commence legal action or he’ll will take action on behalf of ratepayers to address the matter to the Superior Court of Justice.

Karrass is seeking a tax refund of $217.3 million to be distributed to all Vaughan taxpayers on a pro rata basis, a refund of $45.7 million to the City’s Reserves for fees improperly applied relating to infrastructure mandated to the VHCC, full transparency of City Finances to the public and an end to the city operating in a deficit.

It is alleged that the City raised funds for a special purpose by increasing the cost of water to taxpayers, asserting that these increases were required to provide that service and to maintain and improve water infrastructure, wrote Karrass.

The average annual surplus raised from the waterfund was approximately $54.3 million. However, it is alleged that this surplus, totaling approximately $217.3 million was unlawfully applied to offset the operational deficit, stated Karrass.

It is alleged that the City has been operating at an average annual deficit estimated at
$106,365,000.00. Council was aware of these deficits and never took action, stated Karrass.

Acting mayor Mario Ferri is greeted by an angry audience after a heated debate concerning the recounts of the municipal election for Linda Jackson vs Michael DiBiase inside the Council Chambers in the city of Vaughan. VERONICA HENRI, TORONTO SUN

Vaughan’s deputy mayor Mario Ferri, Vaughan’s deputy mayor told CBC News that the allegations are “fake news.

“This is absolute bunk. It’s political gamesmanship, and our staff will be responding and will be making a statement and I’m sure it will be clarified,” said Ferri.

“We don’t have a deficit, absolutely not…Our staff are looking into this and I believe there’s no validity to any of those claims. It’s ironic that it’s happening now, two-and-a-half weeks before the election.

Mayor Maurizio Bevilacqua said the accusations in the letter “are without merit.

“The City of Vaughan uses best practices to ensure fiscal sustainability and credibility, while at the same time safeguarding investments for the quality public services residents, visitors and businesses rely on each day,” stated Bevilacqua.

“It should be noted that the City of Vaughan’s financials are certified through a third-party audit and presented at public Council meetings on an annual basis. This helps ensure financial accuracy and integrity.”