First of all, I have to commend a staff member with HRM’s communications department: She saw I was looking for this report, and she emailed it to me. It is declassified, so I (like you) have every right to be able to access it, but I didn’t even have to ask. So, thanks HRM staff member — you know who you are.
So here’s the full declassified report. Whether or not Council went in-camera for the discussion, this report would have been released, as long as they approved the staff recommendations in the report (which they did).
WHAT DID WE LEARN?
There are some basic facts to clarify. There are four bodies at play here: HRM, Power Promotional Events, Metro Centre Limited, and Trade Centre Limited (TCL). Metro Centre is owned by HRM, but managed by TCL, which is a provincial crown corporation. Power Promotional Events was responsible for bringing in the acts themselves, and was run by Harold MacKay.
Here’s what we know from the report, some of it new or clarified, but most of it we already knew or at least strongly suspected:
The $359,550.00 that was lost was already recorded as an expense in HRM’s Fiscal 2010/11 budget.
Therefore, Council won’t have to jiggle around either last year’s budget, or this year’s recently-approved budget.
HRM recovered $38,000 from Harold MacKay, so the actual amount missing is $321,550 at the end of the day.
Still not chump change.
HRM staff had considered trying to recover these funds, but ultimately decided these efforts would fail.
They had considered that some of the funds could have been recovered through errors and omissions insurance, but the solicitor concluded that this would not be possible — clearly this didn’t qualify.
They also considered legal action against Trade Centre Limited (a provincial organization) to recoup the funds, but even if HRM did win (not a guarantee), the cost of the lawsuit could very likely be greater than the actual amount they would be suing for.
The motion that Council passed on May 29, 2012 — to pay Metro Centre $359,550 — was really just an accounting exercise.
Because HRM owns Metro Centre, any surplus that Metro Centre makes goes back to HRM. The $359,550 that Metro Centre is going to receive will, indeed, be surplus, and will thus flow back to HRM. To not transfer the money would be improper, though, “because Metro Centre did not benefit from the concerts and reporting this as an expense in its books would not be correct.”
This matter is over now.
HRM will “take no further action to pursue recovery.” Taxpayers are on the hook for the botched concert efforts, and hopefully some lessons were learned.