Chestermere sues fired mayor, councillors to recover $650K

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The City of Chestermere is suing its fired mayor and councillors for more than $650,000 in public funds that the municipality says were spent without approval — including personal legal fees, cameras to surveil city staff, booze and travel expenses for a councillor’s wife.

The City of Chestermere filed a statement of claim against ex-mayor Jeff Colvin and former councillors Mel Foat, Blaine Funk and Stephen Hanley in the Court of King’s Bench in Calgary on Monday. Postmedia obtained a copy of the lawsuit, which claims the ousted officials caused the city to expend taxpayer dollars without proper budgeting or authorization on several occasions.

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The city alleges the four beleaguered politicians are jointly responsible for more than $430,000 of unauthorized city spending between 2022 and 2023 and that Colvin alone is liable for an additional $223,000 — all of which the city is attempting to recover. Under the Municipal Government Act, elected officials are liable to municipalities for cash spent without necessary approval.

The city’s claims have not yet been tested in court.

Municipal Affairs Minister Ric McIver booted Colvin, the three councillors and three top city officials from office in December last year following two years of head-butting over a municipal inspection that found the city was mismanaged. The dismissals were rooted in council’s failure to adhere to binding provincial directives resulting from that probe.

In the wake of the firings, McIver ordered a second municipal inspection, a financial probe conducted by professional services firm Deloitte that focused on the municipality’s time under Colvin’s leadership.

The financial inquiry’s laundry list of findings formed the basis for many of the city’s claims outlined in the lawsuit, coupled with additional information the city provided to its lawyers after the Deloitte report was released last month.

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Legal spending to ‘advance their personal interests’

Unsanctioned legal fees represent the majority of the alleged unauthorized funds, accounting for more than $415,000. The lawsuit says the four retained two firms for purposes of failed injunction applications against McIver — at costs of $140,000 and $240,000 — noting one of them as a bid “to advance their personal interests in remaining on council.”

Colvin and his supporting councillors are accused of retaining another law firm for more than $35,000 to “undertake unauthorized investigations,” according to the claim, of which the targets were their political opponents.

“This included an investigation into the background of another member of council for the purpose of publicly discrediting him. In fact, the private investigator’s report disclosed no basis to discredit that member of council,” it reads.

The lawsuit says the city purchased “mini cameras and a hidden device detector” for more than $200 to “covertly surveil staff or others at the city’s staff offices.” The city bought the devices through a company owned by one of the city’s top officials, Kim Wallace, and her husband.

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To prove those cameras didn’t exist, the city paid $15,000 to have a company conduct a “sweep” for electronic listening devices after officials learned of an RCMP criminal investigation into Colvin and Wallace for the alleged surveillance.

A document Colvin provided to Postmedia in December states the sweep found no evidence of any such devices. At the time, he called the accusations and the criminal investigation “completely false, made-up claims.”

Alcohol, personal items purchased on public dime

The lawsuit again points to issues with Colvin’s use of his city credit card, alleging the ex-mayor spent almost $6,500 on booze on the taxpayer’s dime.

The Deloitte report noted the mayor spent more than $50,000 on his city credit card over the course of his two years in office, the majority of it on food and booze, though the meal expenses don’t appear to be included in the city’s lawsuit.

The most sizable item the city’s going after the mayor for is $160,000 in funds related to a clean-up at the site of a long-defunct waterslide park in the city — including a $4,000 environmental fine related to that work. Colvin directed multiple city departments to conduct work on the privately owned property after multiple attempts to give the owner a more than $100,000 tax refund were snubbed by a province-installed supervisor, states the lawsuit.

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“At or about the same time, Mr. Colvin instructed city staff, and retained private contractors, to conduct cleanup work at the waterslide park. Mr. Colvin caused the city to expend significant sums of public money to conduct cleanup work on these private lands without any authorization by the city,” it reads.

Additionally, Colvin is accused of improperly spending $46,000 on a summer carnival in the city last year without the approval of council.

“The city’s event department was entirely unaware that the Summer Carnival was being organized by Mr. Colvin until after it was publicly announced by Mr. Colvin,” reads the claim.

The lawsuit claims Colvin is also responsible for $5,600 in unauthorized spending to hire Dan Buryn — a former councillor in Thorhild County in northern Alberta who was fired by the province in a similar fashion in 2017 — for “consulting services” in December 2022.

Some other unauthorized funds tied to Colvin that the city is looking to recover are as follows:

• A $94.72 spend on Colvin’s city credit card for a “digital family crest” and “personal seal”;
• A $375 expenditure to have Colvin’s personal piano moved to city hall;
• A $3,100 purchase of a painting at an RCMP fundraising event, at Colvin’s direction;
• More than $4,200 spent on memberships for “various individuals” in the Chestermere Regional Community Association, which manages the local recreation centre.

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Additionally, the city is pursuing under $700 in improper expenses by Foat, comprising $230 for headphones and close to $450 for undefined travel expenses for his wife.

Jeff Moroz, the lawyer for the four, told Postmedia he has not yet seen the statement of claim.

The City of Chestermere declined to provide comment about its lawsuit.

Colvin’s team has long cited investigations he ordered of past corruption and financial wrongdoings at the city as notable omissions from the Deloitte report and other probes and critiques of his mayoralty.

He’s alleged McIver, Deloitte, opposing councillors and past city staff, among others, have conspired against him to quash and cover up those bids. This includes a cancelled city lawsuit against three former employees for what Colvin called $600,000 in “hush money” severance packages and a probe of what his administration once said were “missing millions” from the city utility company.

When city officials authorized the legal action against the four at a dramatic meeting last week, Colvin said it amounted to “interference” in the byelection scheduled for later this month.

Colvin is one of four mayoral candidates running in the byelection, and Foat, Funk and Hanley are among the 23 candidates vying for five councillor seats.

Election day is June 24.

mrodriguez@postmedia.com

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