The inspection, which was conducted by the independent third-party Strategic Steps Inc. on behalf of Alberta’s department of municipal affairs, also found that Kelly appeared to not exercise “reasonable oversight of capital project costs” while serving as CAO.
The report states that Kelly, who was hired last year as Charlottetown’s CAO, took actions such as negotiating an industrial land lease and authorizing site improvements “in the absence of an authorizing council resolution.” Kelly served as the Westlock County CAO from September 2014 to March 2016.
“Mr. Kelly seemed to feel that direction given in camera was sufficient for action, which is not accurate and contravenes the MGA (Municipal Government Act) which requires a council to act by resolution or bylaw,” said the report.
Kelly was taken off his probationary period with the City of Charlottetown in June.
The Guardian reached out to Kelly and Charlottetown Mayor Clifford Lee for comment on the report.
“We’ve just received the report and are in the process of reading through the documentation,” said a city spokesperson. “And in terms of comment we haven’t had time to review the whole document yet.”
Westlock County Reeve Don Savage said the report was straightforward in showing that Kelly “took public funds and spent them without council’s approval.”
“I don’t know why he would choose to spend unbudgeted money. It isn’t something that ever went through council, he said it was in camera,” said Savage. “He did a very poor job of looking after the people of Westlock County in my view.”
Despite his concerns, Savage does not feel there will be any legal action coming out of the report.
Last year, Kelly was accused of being responsible for a $200,000 bill connected to developing an eight-acre industrial park for a developer known as Horizon North.
The county spent more than $375,000 to develop the land but based on market trends stood to lose more than $200,000 on the deal due to cost overruns.
During a previous interview with The Guardian, Kelly denied the accusation and said council gave him the direction to move forward.
However, the report stated the project began with significant work being completed prior to formal approval by council.
“Records indicate that related site enhancement work was largely completed in August 2015 and that Westlock County incurred project costs of $375,707 on the Horizon North lot. This project was not approved in either the 2015 budget or by council resolution in 2015,” stated the report. “It appears that former CAO Kelly acted outside his authority by approving unbudgeted site development work for the Horizon North industrial subdivision lot.”
The report also stated that, at times, it appeared that Kelly “did not exercise reasonable oversight of capital project costs.”
“For example he told the inspectors that he ‘wasn’t going to question the numbers’ provided by a county staff supervisor related to the Horizon North Industrial Park lot improvements,” stated the report. “At other times, Mr. Kelly apparently bypassed managers and directed subordinate staff, such as requiring a clerk to create and cancel certain invoices for the Horizon North project.”
However, the report also notes that Kelly was held in high regard by some Westlock County councillors, with one councillor stating that the CAO was “very responsible.”
The report also paints the county as having experienced significant instability in the past council term with the municipality being “managed in an irregular, improper and improvident manner” while also referencing a “council against staff” culture.
“Weak leadership in both council and administration created an environment that was ripe for chaos with site development work being completed and commitments being made without proper authority and council approval,” said the report. “In apparent enthusiasm for economic development, former CAO Kelly acted without proper authority and failed to advise council of their legislative responsibilities, such as requiring advertising when considering selling land for less than market value, and approving unbudgeted expenditures.”
The report also provided a number of recommendations to provide the county a “path to higher ground with a strong focus on legislative compliance and best practices.”