Defamation drama at Nanaimo Council

At Monday’s Council meeting, the Financial Officer presented a report detailing Nanaimo City Council’s spending for the first six months of 2016.  (The elephant in the room – defamation – got exposed.)

This year, not only did Council vote themselves a raise but they voted to increase their expense budget from $75,000 to $118,000.

According to the CFO, the Acting Mayor approves Mayor and Council expenditures, and in in turn the Mayor approves the Acting Mayor’s expenses. They were told that they can reallocate their expenses between accounts, except legal fees.

Council talks legal expenses:

Bestwick: …why are other agencies not filling out this expense form?…Who checks their expenses? If we fill these forms out in seven days why don’t they?

Brennan: …each councillor received a budget of $13,500 for their expenses but my budget was only $8,500. I didn’t understand that so I contacted staff…I was told that there was $5,000 allocated to each councillor and I was told that I was not entitled to that. The reason I was given was that there was a council motion that attributed $5,000 to each councillor but that motion did not include ME!

So (big frown) …I have not challenged that… I was fighting a losing battle on it…the other council members were awarded an extra $5,000 for legal fees…

Mayor: …careful what you say…

Brennan: …That’s why I didn’t get the extra $5,000 as it was for legal fees…

Yoachim: …when you get boxed in you have to defend yourself…before hiring the current CAO there was no process of hiring…we can get the real story…so it’s not that we five councillors tried to gang up on Councillor Brennan…I hope the story can come out…when legally possible…to say people got extra money…and why I had to get a lawyer to defend myself…

Mayor: …stick to it [expense questions]…

Fuller: …for any other legal challenges against the City do we pay the person making the challenge? Do we do that with any other legal challenge? Is it a practice to pay ahead?…

CAO:…the general practice is for the CAO to provide corporate advice and to retain a legal firm…we have 5 to 8 legal firms on contract at any time…we have a whole list of lawyers available…when council needs legal advice the CAO makes lawyers available…The practice should be to go through the CAO and they [council] will get legal advice for those that need it…an allegation of leaked information from a meeting was made…the minutes for these in-camera meetings have been released now…the legal advice was that there was a breach of confidentiality…

Councillor Brennan requested advice for legal help because she was asked to make an apology…and she requested legal help to do so…and she did…but she requested more informaton from the lawyer…she has been informed that she can apply for the legal money if she wants to…Councillor Brenan has been given that advice verbally and in writing….and it is up to Brennan…also Brennan has made several requests to have this reversed but that is not up to myself or the CFO to make…that’s up to council to reimburse Brennan or not…Brennan would have to make that request to council…the lawyers represent the corporation…some councillors would be better served by having [their own lawyer]….Councillors had to [get legal help]…Mayor McKay retained his own lawyer as well…we are going into 8 months of this [legal mess]…the retention of lawyers is a process that we will have look at…Brennan and Mckay have had their own lawyers…and councillors had to get their legal advice…it is up to council when they want to depart from using corporate lawyers and use their own…

Mayor: …this is the first time we have been told about the ability to [shift the money between accounts]…I appreciate that…we had an all day meeting and were charged $22.66 each [for May 27, 2016 lunch]…we get free food here tonight at the council meeting so why the charge for the once a year lunch meeting?…

Bestwick: …we get inquiries about transparency, about spending money…here we are..airing our laundry…$22.66 for lunch? …it’s not a big deal…if we want to change the policy we put a notice of motion and give everyone two weeks’ notice…get some work careful what you ask for!…it shouldn’t warrant this time…we are wasting your time and our time…

(Clapping from the gallery)

Pratt: …what we are doing is really important…there is real controversy… I have taken advantage of the learning opportunities…I don’t need to be ashamed of anything…I have an issue with the telephone bill. Everyone is at $800 or $900 and we are halfway through the year and we are allocated $1,000 each? That needs some adjustment…

Hong: …this is great…we have a budget…there wasn’t one before…we got paid already for the whole year for the internet so that’s not going to change…that’s how it ususally works…

Should the City pay legal fees for defamation by Councillors?

Councillors opted to increase their legal budget from $15,000 to $60,000 this year. Between January and March 2016, the City of Nanaimo spent approximately $130,000 on legal costs. Did that amount include an out of court settlement for Mayor McKay?

According to the Nanaimo News Bulletin, a letter was sent to the City naming five councillors. Councillor Fuller explained, “If it went to judicial review then those monies were there for us to possibly deal with defamation.”

Should taxpayers be paying for a councillor’s loose lips? In the case of the Mayor of Calgary’s defamation case (he called a builder a ‘mob boss’) he is paying for his legal costs. Calgary Councillor Chu also was sued for defamation and he is paying his own legal fees.

 Legal Fees (Jan - June 30, 2016)Law Firm
Cook Roberts, LLP
Cook Roberts, LLP
3,593.33Cook Roberts, LLP
3,593.33Cook Roberts, LLP
Cook Roberts, LLP

4 Questions on expense reporting

  1. Why is the Mayor and council approving their own expenses?
  2. Why are expenses allowed to be shuffled between accounts?
  3. Why are the internet and call display costs so high?
  4. Why are the expenses for many items the same amount for each member of council?

The chart below shows that for 6 council members most of the expenses were for legal fees or internet/call display.

Comparing 2015 and 2016 expenses

Councillor2015 2016 (Jan - Jun 30, 2016)Biggest Expense of 2016
54% on call display/internet
Thorpe2,038.221,729.7942% on call display/internet
Fuller1,008.684,706.9676% on legal costs
4,831.6674% on legal costs
Bestwick3,039.474,844.8174% on legal costs
Brennan7,116.685,072.5980% on conferences
McKay28,302.376,025.7873% on conferences
Hong7,759.076,088.6959% on legal costs
Pratt7,366.916,582.8782% on conferences