‘I warned of it,’ Everitt says of lawsuit

By Jason Small

with material by Dan Davidson

Whitehorse Star April 19/04

The ex-mayor of Dawson City is telling territorial officials he told them so after a local company launched a lawsuit against the town for more than $526,000.

“It’s not a surprise to me,” Glen Everitt said in an interview today. “I warned of it.”

Callison Waste Management Ltd. issued the lawsuit against the town on April 13, the same day Community Services Minister Glenn Hart fired Everitt and the entire council.

The waste company wants $526,550.40 from the community for loss of profits from the contract along with an unspecified amount for interest and legal costs.

Dawson is already swimming in $4.4-million worth of red ink.

The lawsuit came out of a situation over the past two months.

At the time, the town was under the thumb of government-appointed supervisor Andre Carrel, who had worked out a financial plan for the cash-strapped town of 1,800 people.

The town issued a request for businesses to submit proposals for dealing with its garbage. At the time, according to Everitt, the council asked Carrel if he wanted to see the proposal and the supervisor replied he wasn’t interested. The town was asking for proposals on basic garbage pickup but was also interested in plans for more service than the bare minimum, including recycling.

A total of six proposals were made. They consisted of three basic proposals between $95,000 and $105,000 and three more complex plans between $117,000 and $120,000, yearly.

Council decided it could afford to go with a better plan by raising garbage collection fees. It gave the contract to Callison Waste Management for $117,000.

That was when Carrel stepped in. The supervisor said Dawson was going beyond the financial plan it had to stay in. Carrel said some of the fee increases for garbage collection ($75 to $100 for residences, $75 to $150 for businesses) were OK, but an increase of $75 to $500 for grocery stores and restaurants was unacceptable. He wanted council to give it to the lowest bidder of the basic proposals.

Since he believed the town had breached the financial plan for handing out the contract for $117,000 a year, he recommended to Hart the entire council and the mayor be fired.

Hart balked and told the council to rescind the contract or it would be toast. A couple of weeks ago, council grudgingly voted to give the contract to Ed Repair for $95,000 and take it away from Callison.

At the time, the mayor and two councillors who voted to rescind the deal indicated the government could be setting the town up to be sued by Callison.

One of the councillors was absent from the meeting, while the other, Joanne Van Nostrand, a restaurant owner, voted against rescinding the contract and resigned from council in protest.

A week later, Hart swept the rest of council out of the office. He replaced them with a trustee because he wanted to deal with someone who was more co-operative than the council had been.

“By revoking or removing the award for the RFP (request for proposals) from Callison, Dawson unilaterally breached the contract which it had entered into with Callison causing Callison to suffer contractual damages and loss of profits,” the lawsuit states.

Everitt said Callison and its owner, Wayne Rachel, were screwed by Carrel.

“I don’t blame Mr. Rachel from Callison Waste Management one bit because what was done to him was wrong,” said Everitt. “We were being set up for a lawsuit, but that was being ignored.”

When Carrel was warned of the possible lawsuit, Everitt said, the supervisor said any councillor who voted for the $117,000-contract in the first place would be financially responsible. Everitt believes it was a stretch for Carrel to say the council was going outside of its financial plan. He said the $117,000-contract fit within the financial plan.

The government saved the town $110,000 for changing the five-year contract to Ed Repair. If the town pays out what Callison wants, the change will tack on an extra $526,000 to the town’s debt.

In an interview today, Carrel said whether it was his or council’s direction which led to the lawsuit will be part of the case. Otherwise, he would not talk about the case.

“The trustee (Ray Hayes) is going to have to deal with that.” Hart was likewise not commenting today, throwing up the traditional roadblock that he doesn’t want to comment because the matter is in the courts.

Everitt Lambastes Fentie for Letter to Watershed Council

by Dan Davidson

In a strongly worded response to Premier Dennis Fentie, Dawson’s former mayor, Glen Everitt, is taking Fentie to task for the contents of his April 20, 2004 letter to the Yukon River Inter-Tribal Watershed Council.

Fentie’s letter, Everitt says, is riddled with innuendo and patently false statements. He warns the premier in strong language to be more careful with his management of the facts.

Fentie wrote to the council that the blame for inaction on Dawson’s downstream discharge lay solely with the community, which had been given “$10.4 million dollars under a

Glen Everitt has been enjoying a respite from politics in his new job as race manager for the International Sled Dog Races which will be held here next March. He says he’s been trying not to think too much about politics, but sometimes it’s hard. Photo by Dan Davidson

Capital Funding Agreement ... (and)... unfortunately made decisions to utilize this funding for facilities other than secondary sewage treatment.”

“How dare you leave the impression that the City had $10.4 million to build a Secondary Sewage Treatment Plant?” Everitt writes. “In my opinion and hopefully my lawyers this statement alone is criminal.

“The four corners of the legislature do not protect you from letters that come out of your office.”

Everitt reminds Fentie that he was part of the NDP government which began the negotiations with the City of Dawson that became the final Capital Funding Agreement. In his letter Fentie has said that the CFA originated in 1997.

“We did not have a signed CFA in 1997,” Everitt states. “The budget announcement was in 1999 by the NDP government of which you were a part...”

The NDP government called an election based on that budget, so that CFA was never finalized. A new set of negotiations had to take place when the Liberal government came to power, and these culminated in the CFA Agreement #99-0727, as indicated in the Carrel Report.

Everitt reminds Fentie that the CFA was for three projects, not just sewer and water, and that $4.8 million of the CFA, a number identified years earlier by then Mayor Peter Jenkins, was tagged for the beginning stages of developing a sewage treatment plant.

Everitt reminds Fentie that the “financial mismanagement” cited so often in his letter and in recent speeches in the legislature, was accomplished with the assistance of a supervisor, a deputy minister and a number of highly placed government officials, all of whom were looking over Dawson’s financial shoulders from January 2001 on, and some of whom actually sat on the project management teams that spent the money.

While Fentie’s letter calls the current design for a sewage treatment plant “impractical and unaffordable” Everitt reminds the Premier that he himself signed the water licence which required the town to follow those standards in having the plant designed to meet a court imposed deadline.

“It was an independent report done by Government that led to the Water and Sewer Project design and scope. This of course was to meet the parameters of a Water License that you signed.

“For the record the Project Management Team for water and sewer which included the government did not just jump in and construct. They identified the only treatment system that would work under the parameters of our license and through proper planning and management showed the true cost of its construction and operations.”

This, said Everitt, is the explanation for why the costs for the plant eventually rose to almost $19 million. None of this design work had ever been done before and nothing had existed except guesstimates of the actual costs.

Fentie’s letter does speak highly of the meter and bleeder installation which took place in Dawson under the 2000-2003 council, but claims the credit for it.

Everitt points out that this project came from the $4.8 million as well as from some federal money, and was a council initiative.

“I love how you attempt to take credit for something you really had no part of,” he writes. “The ‘mismanagement’ you refer to earlier put in the bleeder system you are now bragging about.

“Water conservation for Dawson has saved the community thousands of dollars. It allows for the downsizing of construction (of the sewage plant).

“It is of interest that the last elected council of Dawson was ridiculed by members of your government for this project. It is good you have seen the light and recognize the benefits.”

Everitt said he had to think hard about writing his letter once he had obtained a copy of the Fentie letter. It was copied to eleven additional recipients, including the Prime Minister, MPs and Senators, CYFN, the Federation of Canadian Municipalities (where Everitt had served as a board member and chair of the Northern Forum), and the AYC (where Everitt was four term president), but not to him.

“Many statements in your letter are misleading and false. The fact that this letter has been forwarded to so many different parties, it requires me to correct you and to bring attention to the many parties concerned of your government’s plans.”

Everitt goes further, to state his belief that he and his formal council members are being made the victims of a “witch hunt being run by your government, in particular the MLA for Klondike, (which) will not end and will continue until Mr. Jenkins feels he has destroyed the lives of my family and friends.”