Charlottetown mayor stands by beleaguered CAO Peter Kelly

Charlottetown's mayor is standing by his man.

Mayor Clifford Lee finally spoke out about today about beleaguered city CAO Peter Kelly, after some officials with the last municipality Kelly worked for claimed last week that he authorized hundreds of thousands of dollars in municipal spending without council's knowledge or approval.

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The council of Westlock County, a small farming community north of Edmonton, has asked the province of Alberta to conduct a review of its operations, including Kelly's conduct. Its chief financial officer said she found Kelly authorized $390,570 in non-budgeted spending to develop a site in the county's industrial park for a potential client.

Alberta's Municipal Government Act gives council the authority to put a cap on spending that is not included in a budget.Without council approval, Westlock's CAO was only authorized to spend$10,000.

I'm satisfied to this point in time. Charlottetown Mayor Clifford Lee

"When I heard the news last week about the allegation that Mr. Kelly had violated the Municipal Act for the province of Alberta, obviously that caused great concern," Lee told CBC reporter Kerry Campbell.

Lee said he communicated via email with the reeve of Westlock County Bud Massey, who assured him Kelly is on the right side of the law, and that the overspending on the real estate project was overseen by another employee.

Kelly remains on anprobationary period since being hired May 1 by the City of Charlottetown, Lee confirmed.

Meanwhile, CBC obtained an eight-page report from Westlock County's chief financial officer that she presented to council in June detailing almost $400,000 in spendingunder Kelly's tenure as CAO there. CFO Sue Oberg said the spending was not in the municipal budget and never received the necessary approval from council to be able to go ahead. Two councillors told CBC News they had not been informed how much money was being spent.

Kelly last weekdeclined a request for an interview withCBC News, but in anemailedstatement said the work done on the site was stipulated in a lease agreement passed by council.

'Dead wrong'

"I questioned [the reeve] about the CFO's comments in the media as well. His comment to me is, 'She is dead wrong in what she has said,'" said Lee.

"There's a lot of issues in Westlock County, I'm not sure that they are issues that are relevant to the performance of Mr. Kelly," Lee continued.

"I'm satisfied to this point in time," said Lee, adding he's aware of a possible provincial review of the matter in Alberta.

"If it does in fact show that Mr. Kelly was in violation of the Act, then that's obviously an issue that concerns me greatly, and city council here in Charlottetown will deal with that," Lee concluded.

Lee has no plans to further delve into the matter by talking with the CFO who tabled the report detailing the unauthorized spending.

'Who does one believe?'

"Who does one believe? At this point in time, in most worlds in municipal government, the mayor/reeve speaks for that municipality," said Lee. "It makes you wonder what really is happening in that community out there."

Kelly also came under fire while mayor of Halifax in 2011 over hundreds of thousands of dollars in payments by the city to concert promoters without the knowledge of council.

The city's auditor general said Halifax Regional Municipality lost $360,000 due to poor attendance at the concerts.

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