September 28th, 2021

Clugston to call for third-party audit

By COLLIN GALLANT on July 24, 2021.

cgallant@medicinehatnews.com@CollinGallant

Mayor Ted Clugston says he will call for a third-party audit of how a potential privatization of Invest Medicine Hat was handled, saying it will likely “vindicate” city hall’s actions, but says any changes to economic development and municipal land sales are likely now on hold until after the October election.

“It’s unfortunate, because I wanted to see how it would play out, and I was hoping for 16 bids,” said Clugston, who blamed public criticism and media coverage as factors, perhaps, why more companies didn’t finalize proposals.

The process is no longer active, he said, after the only proposal to become the private operator was “rescinded” by Orka Management, a group made up of current city Invest MH managers.

Clugston also said he has deferred comment to senior administrators as scrutiny of the deal-making process ramped up in order to remain neutral.

Council was set to read an evaluation of the bid done by business consultant firm MNP and vote on whether to proceed to negotiations on a 10-year contract at the Aug. 16 council meeting.

“(At council’s) Aug. 3 meeting I will request an independent audit,” he said, suggesting an out-of-town law firm or potentially the Ministry of Municipal Affairs could do the work.

“I want to make sure there was nothing (untoward) in our process and partly for vindication.”

“It might be bad for those that are alleging corruption.”

On Friday, lone bidder, Orka Management, said it wouldn’t participate further in the RFP and sealed its proposal that was put together by current managers of the city office – a situation allowed under case-specific conflict of interest guidelines in the process.

A public outcry ensued about the how the RFP was developed, structured, and how it might have been considered by administrators and council before an approval vote next month.

Three mayoral candidates who will face Clugston this fall called no talks until after the election.

The major civic union objected under contracting out terms in their contract, and the Medicine Hat Real Estate Board also suggested the process was lopsided.

Sitting councillors expressed a variety of opinions to the News.

Couns. Phil Turnbull and Jamie McIntosh told the News the office was beating expectations and would be run more efficiently outside the city hall bureaucracy.

Speaking prior to Orka’s noon-hour release, Coun. Robert Dumanowski said he was “strongly leaning” toward pausing the process until a newly elected council could take on the file after the October election

“I’m certainly leaning towards putting this off until after the election,” he said. “That’s not political on my part. It’s for the community to get an objective look at this.”

Coun. Brian Varga told the News he had questions about the deal and would press for more information sooner than the second meeting in August.

All five councillors who responded to the News, including Coun. Jim Turner, said they had some level of reservation that only one bid was submitted, mainly because they preferred greater competition and avenues of comparison.

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