Halifax Mayor Peter Kelly, left, and Barry Barnet, Nova Scotia's minister for health promotion, announce that the city and province has scrapped their bid to host the 2014 Commonwealth Games, in Halifax on Thursday, March 8, 2007. The two levels of government said that the bid budget, with inflation factored in, was close to $1.7 billion.ANDREW VAUGHAN
Municipal rules were broken amid an "overwhelming desire" to hold concerts in Halifax, the city's Auditor-General said after probing a funding scandal.
In a report released Tuesday, Halifax Auditor Larry Munroe blamed "many people" for a mess that left the city on the hook for more than $350,000. He said Mayor Peter Kelly and a former senior bureaucrat should have been more diligent.
Mr. Kelly, who has offered an inconsistent version of events, once again refused to resign.
"I have taken responsibility and I've apologized for the outcome," he said. "It won't happen again and we're moving forward."
Halifax boosters became frustrated in recent years as Moncton emerged as a more desirable location for summer mega-concerts. And the lengths to which some city officials were willing to go to reverse that trend became clear earlier this year.
In the spring it came to light that for years the city had been advancing money secretly to promoter Harold MacKay, who was behind poorly attended shows including Paul McCartney and KISS.
The public funds were typically handed over and repaid out of ticket sales. But Mr. MacKay was unable to make good on most of $400,000 advanced before a Black Eyed Peas concert last summer, money provided when he threatened to cancel the event. His business went under in the fall, leaving the city on the hook for $359,000.
Taking questions from reporters, Mr. Munroe would not name those at city hall who were responsible, saying that was not his job. But his report suggests that Mr. Kelly and former chief administrative officer Wayne Anstey were negligent.
"Each of these individuals should have known something out of the ordinary was occurring and should have asked more questions to determine if what they were contemplating and/or doing was appropriate," Mr. Munroe wrote.
His report focuses on improving oversight at city hall and makes 54 recommendations, including the hiring of a risk-assessment manager.
After heated back and forth, Halifax's council on Tuesday voted not to discuss the Auditor's report. They punted it to a committee that will meet in the coming weeks.
"The only thing we've learned is we're abysmal in the concert business," councillor Sue Uteck, a regular critic of Mr. Kelly, said in frustration.
In his report Tuesday, the Auditor criticized an apparent unwillingness at city hall to ask hard questions.
"[Halifax]has many well defined and functional systems of controls in place which, had they been followed, would have mitigated or prevented this situation from occurring," Mr. Munroe wrote.
"The report speaks at length to issues around governance, general thoughts around risk management and, with 'groupthink' as a backdrop, addresses how risk assessments became seemingly overlooked or lacking in the apparent overwhelming desire to offer concerts."
After the payment scandal broke in the spring, Mr. Kelly initially said that everything had been vetted by the city's legal department. He later said legal services had no prior knowledge of the money. Councillors said they were unaware of funds flowing to Mr. MacKay.
Mr. Munroe said at the time this arrangement broke municipal rules.
Mr. Anstey resigned as CAO over the scandal. His replacement was not at the council meeting Tuesday because of a prior commitment, Mr. Kelly said. The new CAO did issue a statement, though, saying that "after an initial review of the report it is my opinion that the recommendations are reasonable."
Until now, Mr. Kelly has shown admirable skills as a Teflon politician. But his vulnerability was highlighted in a poll released last month by Metro Halifax.
The free daily's survey, conducted by Marketquest-Omnifacts Research, showed that 42 per cent of city residents had a somewhat or greatly worsened opinion of the mayor. His approval rating slipped only slightly, though, within the poll's margin of error.
In a comment then to the paper, Mr. Kelly said there was no doubt the concert issue was hurting him.