Vaughan water fees paid off hidden deficit, statement of claim alleges

Torontosun.com
May 29, 2019
Antonella Artuso

A lawsuit seeks potentially hundreds of dollars for every Vaughan ratepayer -- roughly $210 million in total -- alleging local politicians improperly used water fees to pay off an annual operating deficit over several years, according to a statement of claim filed with the Ontario Superior Court of Justice.

The claim, filed earlier this month but not yet tested in court, says Mayor Maurizio Bevilacqua and nine other members of Vaughan City Council approved the use of surpluses in a special purpose fund meant to pay for water and waste water services and infrastructure without telling residents or making any arrangement to pay it back.

Lawyer Robert Karrass, who represents client Frank Miele acting on behalf of all Vaughan residents, said municipalities are required by law to balance their budgets.

“It’s our position that they used those funds to pay down an unlawful deficit,” he said.

The purpose of the suit is to claim a refund for ratepayers and to ensure more transparency in the city’s activities, he said.

If it has the effect of being a warning or guide to other municipalities, that would be great, he said.

“I can’t say that’s a bad thing,” Karrass said.

The City of Vaughan issued a statement in response to the lawsuit, saying the allegations are without merit and the municipality intends to defend itself vigorously.

“The City of Vaughan uses best practices to ensure fiscal sustainability and credibility,” the statement said.

“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.”

The statement goes on to say that the city has found about $30 million in savings since 2015, and that it has kept annual property tax rate increases below 3% for the past nine years.

“Vaughan’s promising future continues to be shaped by respect for taxpayers’ hard-earned dollars and attracting job-creating investments, while at the same time safeguarding investments for the quality public services residents, visitors and businesses rely on each day,” the statement says.

The suit alleges Council ran deficits ranging from $1.5 million to $41 million between 2014 to 2017.

The defendants did not disclose those deficits to residents of Vaughan, and misled taxpayers into thinking that increases in the water budget were for future service and maintenance costs, the statement of claim says.

The suit says Vaughan Council’s actions violated the Municipal Act, and it calls for individuals named in the suit to be disqualified from holding office for two years.

The statement does not allege that council members received a personal gain, Karrass said.

Should the suit prove successful, Vaughan ratepayers could see hundreds of dollars returned depending on what approach the court takes, he said.