At least $1 million of Edmonton taxpayer money has gone missing from a grant that was intended to help a local group build the Ukrainian Canadian Archives and Museum of Alberta on Jasper Avenue’s Brighton Block.
City Auditor David Wiun reports the money was the second installment of a $3-million grant to be paid based on the progress made in construction. He said there was no problem with the first $1 million forwarded in 2013.
“On March 22, 2018, the Office of the City Auditor received an email from the director of Urban Renewal,” the report, released Thursday at city hall, said. “The director informed us that they had been provided with information alleging that the city had made a $1-million payment — based on false information — to the Ukrainian Canadian Archives and Museum of Alberta to build archives and a museum.”
Wiun said the first $1 million was forwarded in 2013 without any issue because the project was 30 per cent built.
“The second payment of $1 million, paid in 2014 — we have some concerns because it appears that the payment was based on percentage of budget spent and not the per cent of construction completed,” Wiun said.
“And unfortunately, due to the timeline and the building being sold, there’s no way to confirm that it was ever 60-per cent completed at the time of that payment,” Wiun said, adding that the money was never returned.
The third million was never forwarded, he said.
The Brighton Block has since been sold.
Councillor Mike Nickel has already reached out to the current senior management team of the city to find answers. He’s concerned about more millions involved.
“It’s not just the city’s money that I’m worried about,” he said. “There’s a lot of provincial and federal money and I’m just wondering: where did that money go?”
Nickel said the last estimate he heard for the total cost of the project was $11.3 million.
“We’ve asked that the city communicate with other orders of government because yes… both the federal and provincial governments gave significant amounts of funding for this as well,” Wiun said of one of two recommendations in his report.
The second, he said, is for the city law branch to “come up with better criteria and accountability for funding agreements that ensures that any concerns in terms of timelines (and) responsibilities that there is no ambiguity because some of the terms were not, (it) appears, fully understood by all parties.”
“The money got spent on the building,” Paul Teterenko, the president of UCAMA, the organization that attempted to build the museum and archives, said on Friday. He said the age of the building led to unexpected construction challenges that added to the $11-million cost.
“The money didn’t disappear. It didn’t go missing. It went into the building.
“Costs escalated and there was delays — there were delays with EPCOR, with the city, with crane construction — and every time there’s another month delay, it costs money. And there’s still escalating costs of construction during when things were busy.”
Teterenko said he agrees with the findings of Wiun that there should have been more controls in city operations.
“There certainly could have been more checks and balances but we gave them what they asked for. Had they asked us for more information we certainly would have provided that.”
He said an investment firm bought the building and this past March and resumed construction. He said there’s no new time-table on when the project is expected to be finished. The latest estimate he said was in the next year, to year-and-a-half.
In a written response to the auditor’s report, city administration said it “accepts all recommendations.”
“I think we’ve had red flags all along but not when the project started,” recalled Councillor Ben Henderson, who said the original approval predated his time on city council.
“In the end, their business case clearly didn’t match up with what they thought they were going to be able to pull off.”
Investigation: Ukrainian Canadian Archives and Museum of Alberta Funding Agreement by Emily Mertz on Scribd
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