Province appoints supervisor, recommends audits for troubled RM of McKillop

The provincial government has appointed a supervisor for the Rural Municipality of McKillop and recommended the RM commission financial and management audits.

On Thursday morning, the province released a 36-page report it commissioned in August following protests by ratepayers who said the council for the RM, which is about 60 kilometres northwest of Regina, had doubled their taxes and mismanaged their money. 

The report's author, former administrator Carol Ingham, was asked to review how the RM was handling petitions by ratepayers, look at legal actions involving the municipality and examine how finances were being managed. 

Ingham found there is "considerable dysfunction among the members of council and challenges by the council and its administration in meeting the expectations of its citizens and being a transparent and accountable independent municipal government." 

Despite the challenges, Ingham said she found "no factual evidence of theft, fraud or misappropriation of funds." 

She also concluded that despite the widely publicized massive tax increases, "it does not appear the RM is in financial difficulty. It appears the RM has rarely needed to access its $100,000 line of credit for operating the municipality. The long-term debt of the RM is below its authorized debt limit." 

Supervisor appointed for one year 

The government says it has appointed retired rural municipal administrator Vern Palmer to oversee the RM while it follows the reports recommendations. His appointment will last one year. 

"The provincial government will now in good faith give the supervisor and this RM's council the opportunity to do their work," Government Relations Minister Warren Kaeding is quoted as saying in a news release.

That work involves following the report's recommendations. 

Keith Comstock, assistant deputy minister of Government Relations, said at a news conference Thursday that Palmer will specifically help council make decisions and resolve current issues.

Palmer has worked as a supervisor for the province once before.

"We have great confidence in his abilities," Comstock said. 

Calling someone in to supervise an RM is not common. Comstock said it has only happened twice since he began working for the government over 20 years ago. 

But, according to Comstock, it is effective. 

"We choose the people that we know are going to do a good job for us and we've had great results in the other situations we've been in," Comstock said. 

Palmer will start his new role Oct. 1. 

Audits recommended 

Among those recommendations are "that the RM council should complete a financial audit and a management audit."

Ratepayers asked council for those audits a year ago, submitting petitions with more than 400 signatures each. 

The provincial report says council got legal advice stating the petitions were insufficient. Despite that, council agreed to consider commissioning audits, the report says. Council and ratepayers have been unable to agree on the scope of such a review. 

Ingham outlines what she considers a reasonable scope for both audits and urges the RM and the petitioners "to work together to arrive at the potential scope of the audits."

She concludes "it is recommended that the RM proceed with these audits." 

Revenue Canada launching audit

The RM is already facing another audit after catching the attention of federal tax authorities. 

"Revenue Canada has informed the RM it will commence an audit in the week of September 16, 2018, of employee's T4s," the provincial report says.

It says the RM has been informed that federal tax officials will look at why, "the 2016 and 2017 T4s do not match the amounts submitted to Revenue Canada by the RM." 

The report also states the RM is facing internal turmoil and many legal challenges. One councillor is being accused of conflict of interest. The RM has received complaints about issues ranging from employment standards to zoning bylaws to ethics. 

Ingham wrote that she hopes her recommendations help the RM get back on track. She also included a warning. 

"If the above actions do not improve the functioning of the RM during the supervisor's appointment the minister should consider if it is in the public interest to take further action," which could include, "directives to council and the ability to dismiss municipal officials."