The Committee met at 7:30 p.m. in room 5083.

CHAIR (Sullivan): Order, please!

On motion of Mr. Butler, seconded by Mr. Aylward, Mr. McLean was elected Vice-Chairman.

CHAIR: My name is Loyola Sullivan. I am the Chair of Public Accounts. We will do introductions of the members of the Committee first of all. We can just, I guess, start down at the far right here.

MR. JOYCE: Eddie Joyce, Bay of Islands.

MR. K. AYLWARD: Kevin Aylward, St. George's-Stephenville East.

MR. FITZGERALD: Roger Fitzgerald, Bonavista South.

MR. McLEAN: Ernie McLean, Lake Melville.

MR. T. OSBORNE: Tom Osborne, St. John's South.

MR. BUTLER: Roland Butler, Port de Grave.

CHAIR: I will just mention again to make sure you press on the talk button when you are speaking, and just press again to release it when you are finished.

The Auditor General's Office.

MR. NOSEWORTHY: John Noseworthy, Auditor General.

MR. LOVEYS: Wayne Loveys, Deputy Auditor General.

MR. CASEY: John Casey, Audit Senior, Office of the Auditor General.

CHAIR: Okay, representing the C.A. Pippy Park Commission.

MR. MURPHY: Tom Murphy, the Chair of Pippy Park.

MR. CURNEW: Ken Curnew, Chief Operating Officer.

MR. BENNETT: John Bennett, Assistant Deputy Minister of Finance, and also the Liaison Officer between the Department of Finance and the Commission, and Secretary/Treasurer of Thomas Development.

CHAIR: Thank you.

We have with us, too, at the table there, Elizabeth Murphy, who is Clerk of the Committee and Deputy Clerk of the House of Assembly. Mark Noseworthy is Executive Director, basically, with our Committee here, and Kevin Collins who is recording with Hansard.

Welcome, everybody.

We do not need to swear anybody in. Everybody was sworn in. This is a continuation of a hearing that was held on March 13, so we will move right along because I do not think there is any need -

MR. JOYCE: Mr. Chair, just a point for the meetings. We discussed it here before, as Committee members, about interruptions while we are asking questions. Personally, I find it rather rude that, at the last meeting that we had, you asked questions for one hour and twenty minutes. Not one person interrupted. I have Hansard here again, where I asked two questions and on both questions you interceded.

Just for the flow of the meeting, when an individual, whoever it is, starts asking questions, are we going to let that person finish, or are we going to allow anybody who wants to ask a question jump in? Because I will not be rudely interrupted again unless I do it to everybody else.

I would prefer - like, you asked questions for an hour and twenty minutes and there was not one person who interrupted - we all abide by that. The minute someone else jumps in there, rudely jumps in - twice, in two questions that I asked, you jumped in and interceded. Are we going to allow a person, a member, who has the right to ask whatever questions they like, stay as long as they like to ask it unabated, or are we going to be interrupted?

I have to ask the Committee that, because if you are going to interrupt me or anybody else any time you speak, any time I speak, I am going to do it to every person here.

CHAIR: He wants to ask the Committee. Is there any particular person you want to ask?

MR. JOYCE: I will ask anybody - I know I have brought it up before and we all agreed that if a member has questions to ask, let the member ask the questions until the member is finished.

CHAIR: What we have done the last time on the C.A. Pippy Park Commission -

MR. JOYCE: No, I am talking about the last time with Works, Services.

CHAIR: Oh, Works, Services.

MR. JOYCE: You spoke for an hour and twenty minutes. There was not a person who said a word. Then, when I asked - I had to leave and I had two questions to ask - I was interrupted twice, you interceded twice. We discussed it earlier and I know the Member for Bonavista South (inaudible). If someone is asking a question, they should be able to finish asking their questions and then we can move on. If I am going to be rudely interrupted by you, I just need to know so that I can -

CHAIR: Basically, at the last hearing with Works, Services and Transportation, I waited until everybody had asked their questions and I was the last to -

MR. JOYCE: No, that is not true. Mr. Chairman, you started out first.

CHAIR: Okay, I am sorry, on Works, Services. I indicated, when we met with the C. A. Pippy Park, I did not ask any of my questions earlier and I said if people did not have an objection then I would start off on Works, Services and Transportation. If there was no objection. If not, I would wait and ask mine at the end. I did not have a problem.

What I have done in terms of the Committee, sometimes when we are pursuing a topic and we are on a specific question, if people want to have one person ask all their questions, I have no problem. Sometimes when we are on a topic and there is another question begged on that topic before we move to the next tropic, I have stepped in to try to finish the questions on that topic before we move on.

MR. JOYCE: It is not your right. If I am asking a question, it is my right to ask the question. There is no need for you to intercede.

CHAIR: Yes, it is.

MR. JOYCE: There is no need for you to intercede.

CHAIR: It is my right, as Chair, to allow - and I have done that too. I have stopped and have allowed, whether it is Pippy Park or Works, Services and Transportation, or the Auditor General, to comment on certain things. I have stopped people at that point when they have wanted to have a comment. I give an opportunity on each question, whether it is Pippy Park Commission and the Auditor General, to comment on each particular point that they would want to make. I give equal opportunity to them. I have done that.

If we are on a topic and someone wants to ask another question and we have moved on a topic and someone representing Pippy Park or the AG's office needed to comment before we move off that topic to justify or further explain something, I have an obligation, and I feel it is only fair to allow them to do that. I have done that many times.

MR. JOYCE: Mr. Chairman, you are not the Pippy Park and you are not the Auditor General. You are another member of this Committee. You are the one interrupting me. It was never the Auditor General and it was never the Pippy Park.

CHAIR: Well, if you would like to start today, we will start the hearing now and you could finish all your questions if you want.

MR. JOYCE: No, it is not starting, it is being rudely interrupted on a regular basis.

CHAIR: Well, do we want to start now?

MR. JOYCE: I just want to know from the Committee: Are we going to, if a member is asking questions, let that member finish?

CHAIR: I have no problem with that, if that is what the Committee wants. We could start with Mr. Joyce with your questions and you could -

MR. JOYCE: No, you go ahead. I just do not want to be rudely interrupted again.

CHAIR: Well, if you have no questions, I will not be able to rudely interrupt you.

Do you have any questions, would you like to start?

MR. JOYCE: You can start as usual.

CHAIR: Would anybody like to start?

Well, I have numerous questions because I did not get to ask any questions on the C.A. Pippy Park the last day when we adjourned the hearing. I have a series of questions that I would like to ask.

The first ones pertain to pages 23 and 24, and also there is reference on page 48. This is in the document here that we received from Pippy Park. At the bottom of page 23, there is reference made here to: A Statement of Claim has been served on the Commission by the Registrar of the Supreme Court. The Statement of Claim results from the failure of the Commission to purchase a piece of land within the boundaries, to release this parcel of land for sale to other parties. It is comprised of 40.2 acres and so on.

I want to ask - I assume this is still ongoing and, if it is, could you inform us what is basically the status of that contingent liability at the moment?

Please state your name first for the record of Hansard.

MR. CURNEW: We have not heard anytime from the court on this in quite some time. The parcel of land is now actually excluded from the Park and I am assuming the claimants are satisfied with that. But, it certainly has not advanced to the court to our knowledge.

CHAIR: It is still being carried as a contingent liability, or has the purchaser of that - or the removal of that - removed that liability to some other party?

MR. CURNEW: No, it is still being carried as a liability.

CHAIR: Is there any further thing that the AG might add on that particular item?

WITNESS: (Inaudible).

CHAIR: Okay, thank you.

11.(b) - there is a statement of claim against the operator of the golf course that was filed in the Supreme Court in July, 1999, from a personal injury suffered on the gold course and so on. There is no need to read all through that. Could you tell us what would be the status of that particular contingent liability at the moment?

MR. BENNETT: Actually there have been a number of small claims and one fairly significant one. As of this date, they have not been resolved. Most of them now have gone through the discovery stage but there has not been any resolution or court date set on those matters.

CHAIR: Okay -

MR. BENNETT: Sorry, Mr. Chairman, to interrupt, but that is from the Thomas Development point of view. You know what I am saying, these are not - I assume it is the operator they are talking about in this particular case.

CHAIR: Yes. I guess where they have a contract to operate that, it is a contingent liability on C.A. Pippy Park and that is why it would be listed. What estimated value is being pursued there? I guess there is an established amount being sought.

MR. BENNETT: I am not sure. I cannot give you that one. I have not seen the statement of claim. As you know, what we do is once any action is brought both to Thomas or to the Commission on this regard, then we send it to our lawyers and it is handled by the insurance company. So we have actually no active involvement until such time.

CHAIR: But the statement of claim, just one question -

MR. BENNETT: I have not seen the amount -

CHAIR: It was served on the parties, right? The statement of claim was served?

MR. BENNETT: Yes, and it is now with our insurance.

CHAIR: Did the Auditor General have a (inaudible)?

MR. NOSEWORTHY: I will just explain I guess - I see what you are asking. Our responsibility, when we are doing a financial statement audit like we would do here at Pippy Park, is to communicate with the corporations lawyers and to get information on any liabilities that may exist. We can only include the information that would be provided by the law firm. They make a determination. You will see sometimes references to the likelihood of laws could not be determinable or the amount could not be determinable. That is based on the legal opinion and that is about as far as we can go with it. Our responsibility is communicate with the law firm and to include it in here. That is where our responsibility ends. So that is all the information we would have. I could not tell you, for example, the amount of the claim. If I knew the amount, it would be included.

CHAIR: Okay, thank you.

On page 28, under the C.A Pippy Park Statement of Revenue, Expenditure and Deficit for the year ending March 31, 2001, under bad debts, $202,308, what might be the major component there? Because there was a budget for $3,000 and there was an expenditure of over $202,000. That seemed to be a fairly significant amount there.

MR. NOSEWORTHY: In the year 2001, you will see a golf course management fee of $200,000, the fourth line down. The bad debts include that, because we did not have authority to have it written off but it was likely that it would never be collected so it was set up as a bad debt to offset. So, the $200,000 related to the management fee is included in the bad debt. That is why it is so high.

CHAIR: Okay. I guess on the basis it was included, because the year before, I think, it was written off and I guess not being collected was logical (inaudible).

MR. NOSEWORTHY: Yes, if there was authority. We could not write it off until we had authority from government, an appropriate authority. When we could see an appropriate authority we would recognize it as being totally written off, but in this case there was no total authority but the collection was unlikely so it was set up as a bad debt.

CHAIR: It is my understanding (inaudible) that the approval subsequently came and the money fore-came to, I guess, relieve Thomas Development of their fees for three years, actually. I think we dealt with that for three years. Would that be accurate? Was it 2000?

MR. BENNETT: That is correct. Both years, 2000 and 2001.

CHAIR: Okay, thank you.

On page 40, property sales of $781,087, and I think there is reference also on page 110. No, I do not think it is referenced there. On property sales, what was included there? Were those sales allowed to be retained to help your cash flow for operating there? That is my understanding. Did any of these fees revert, or did it all stay within the Pippy Park budget?

WITNESS: No, all that money stayed within Pippy Park budget.

CHAIR: Pippy Park. Basically, would it be fair to say that to be able to keep a cash flow and to be able to operate, I guess, and stay in the black there, that government allowed the sales from those to stay within that to be able to at least keep it solvent, basically?

WITNESS: That is correct, yes.

CHAIR: Okay, thank you.

I think some of these have been touched on before. Mr. Curnew, I think, just made reference on page 46, out of question fifty-two - 107- yes, there is reference here at the time with those ongoing statements. For example, on page 46, the management fees for 2000 of $200,000 - the last line on page 46 - and $250,000 were subsequently waived by the Commission. The same thing, I think, applied in 2002, I understand. Would that be correct?

MR. BENNETT: No, I do not mean that as badly as it sounds. I mean we had not sought application as to what we would do with the 2002 fee, nor the 2003. We certainly cannot pay it at this time. I am talking from Thomas' point of view. There will be a presentation made to government of what to do with the Thomas Development Corporation vis-à-vis the C.A. Pippy Park Commission once the bank debt is paid off, the management agreement, and what to do with the management fee, et cetera, would be decided at that time.

CHAIR: That is still being carried on the statement. Would it be as a receivable?

MR. BENNETT: Yes.

CHAIR: As an account receivable reflected in the 2002 financial statement.

MR. BENNETT: Yes. From our point of view, it will be a payable.

CHAIR: Is their operation sufficient now that maybe it might not be required, or is Thomas requiring a waiving of that fee, basically? Are they are in a position where they would need that fee waived to be able to operate? Would that be a significant burden to Thomas Development?

MR. MURPHY: As you can see consistently through the document, Mr. Chairman, you are correct in that assumption. The revenues have not indicated that Thomas would be able to send that $250,000 along to the Commission.

CHAIR: Okay.

On pages 106 and 107, in a letter by Mr. Hopkins, Chief Operating Officer, to Dr. Warren, the Chair, he has indicated that under the agreement - that is paragraph two, the second half of the paragraph - "Under the Agreement, TDC is exempt from paying the management fee only if their revenues are significantly affected by a labour dispute on the golf course, or adverse weather conditions, otherwise, the Commission has preferred creditor status, second only to the loan payments...".

The waiving of those fees, I guess, government advancing the money to Pippy Park in lieu of getting this money from TDC, were they done because of labour disputes or adverse weather conditions as per the agreement?

MR. BENNETT: No, they were not. They were done because TDC, or Thomas, did not have the money to make the payment without bankrupting itself.

CHAIR: Okay. I guess, then, to keep TDC solvent, and we dealt with that a little bit the last time and I will not beat that to death, but it was important to keep it going because the cost of keeping TDC operating would have been cheaper than having Pippy Park take it over and operate it. That is, I think, what we gathered from the last day. Would that be probably the motivation in advancing it, contrary to the agreement?

MR. MURPHY: I think at the last meeting the member asked the question related to that, and we responded on the circumstances related to the two different agreements, and if the Commission itself moved in and took over, et cetera, there would be all kinds of problems associated with the collective agreements, and our situation would obviously be in a much, much worse position.

CHAIR: Thank you.

I will not ask further on that because we did sufficiently deal with that the last day. On page 56, also, 4.9 (b), I think this is part of the basic agreement. The Commission is required, "...to maintain on its staff a certified gold professional whose services shall be rendered exclusively to the Golf Courses during the playing season." I think reference was made that this did not occur, first of all. I assume that is correct, is it?

MR. MURPHY: Yes, first of all there is no place or space up on the hill of the golf course that could suitably house a golf pro and the required land they would need for hitting areas and instruction, and the rest of it. Mr. Stick owns the driving range at the foot of C. A. Pippy Park across from the college, and that satisfies this. Both of us agreed that would satisfy that particular part of the agreement.

CHAIR: So, is there a golf professional available?

MR. MURPHY: No, not on site for Thomas Development.

CHAIR: But is there one available at the driving range down (inaudible).

WITNESS: Yes, Jimmy Stick is a golf member (inaudible).

CHAIR: Yes. The golf professional, was that person hired through Thomas Development?

WITNESS: No, I think he is an independent operator that has entered into a lease arrangement for property there with the Commission.

CHAIR: Okay. So the agreement requires him to be there, basically on site, you are saying. Why would it be put into an agreement to have a golf professional there on site if it was not feasible to do so? Can you offer any opinion why you would make an agreement there? Was there land available?

WITNESS: (Inaudible) raised a good question. We were obviously - and I think I got into this a bit the last time from Thomas' point of view. When you are working between 57,000 to 58,000 rounds and that is suddenly reduced - if we had maintained the status that we had, we would have developed adjacent land as you enter into the general property of the two golf courses and probably put down sufficient acreage that we could have a golf pro and would have a sufficient driving range and be able to carry out lessons, et cetera. That never came to pass because of the financial situation that has really existed since about 1999, tracking into this year. So we said: Well, that would accommodate. People can easily, on their way up, drive in and hit practice balls before they start their rounds up on the hill. Jim also gives lessons, so that can satisfy that requirement.

CHAIR: Is it possible that sales might have decreased because of the lack of an available professional onsite? Is there any research to show that professionals onsite would sort of enhance rounds at a course and increase revenue and sales? Is there anything that would support or refute -

MR. MURPHY: Yes, I know what you are saying, Mr. Chairman.

Try and get your head around the fact that we do have an eighteen hole championship course and a nine hole course that really is the salvation of the twenty-seven holes. We do very well with that. There is, as Mr. Bennett explained, when you have a golf pro associated with the twenty-seven holes, that golf pro needs property to train and to have the ability to teach people. It was an intent, from my understanding - and I say from my understanding because I was not there - that we would be able to put a golf pro in place and he/she would have enough room to train those who were interested in becoming more proficient at the game.

In lieu of that, realizing we did not have the money to construct that facility as such, we did have down below us - as Mr. Bennett already stated - an area that was classified as a golfing range. I am not sure, but I think Mr. Stick is a registered PGA instructor and a registered PGA pro. I am not sure now, I cannot say for certain. I could be wrong there, but I know he does have accreditation with golf in Canada. So, instead of trying to do what we could not do on the hill, we put it together to try and accommodate the general public on the driving range, plus Mr. Stick's ability to go ahead on his own and instruct those who wanted to be more proficient at the game of golf.

CHAIR: So, for referrals - like for any lessons and things, you would refer them to Mr. Stick or to that particular place.

MR. MURPHY: I am sure that was done many, many times, Mr. Chairman.

CHAIR: I am not asking that question for any particular purpose. I am wondering when it is required to be there - if it is in the agreement initially, I am just wondering: Would this enhance revenue and sales and the fees there, the green fees, or whether it might eventually have people slide away from there because of that? I do not know. I don't have the answer. That is why - I know people operating, like yourself, with the Commission and dealing there should be able to answer that. I think, Mr. Murphy, you are indicating that no, that is not necessarily the case.

MR. MURPHY: Mr. Chairman, I am not so sure, and I stand to be corrected, but if you look around the golf courses adjacent to the city and golf courses around, I do not know that they have a golf pro full-time in place to teach people how to play. They may have somebody who does a bit of teaching and does other type of jobs.

As we moved off into hiring a general manager and hoping that Mr. Stick's facility and his ability would be able to look after this particular item because we just did not have the ability and capital dollars to construct an area where a golf professional, number one, could be hired and, number two, take advantage of training young people and so forth and so on.

CHAIR: Thank you.

On page 59, under 4.22 in the agreement at the top of the page. "To comply in all respects with the requirements of The Public Tender Act..." We have information that we dealt with the last day where numerous cases did not go to Public Tender. I know we asked the question: How was the overall, I guess, consultant chosen and so on? We were only able to find out why that was the case or how Beaton Sheppard was hired. There is reference made in the Auditor General's report to complying with the Public Tender Act or possibly -

MR. BENNETT: If I may interrupt, I do have some information having talked with some of the people. He was hired by the Commission. There is an established list that has been ongoing. It is just a way for professional consultants, that is in basically two departments, of which C.A. Pippy Park is moved to: Works, Services and MAPA - Municipal Affairs. That person was hired from that list. What happened was a request was made of a competent consultant to become the primary consultant for the project and that name was advanced. Mr. Sheppard's firm - which is now called, of course, Sheppard Case - were familiar because they were asked to come up and do an adjudication of the original construction.

One of the things we had problems with was when we did the skirting - you would call it, but I call it the railings, et cetera - outside and the deck that is on the front of the clubhouse was not built to our satisfaction at the time. When I say that it is Thomas Development. We wanted an assessment to find out if the original contractor had built it to the specifications of the contract. They were familiar with the property. They were familiar with the building and they were the ones that were advanced and automatically assigned to the project.

CHAIR: I did not see it in the minutes of the Pippy Park Commission. So basically it was Works, Services and Municipal and Provincial Affairs, really. Did they make the decision on who the consultant would be?

MR. BENNETT: Yes, the name was advanced, the way I understand it -

CHAIR: Just one name?

MR. BENNETT: Yes, as the person and that person met - from the list. They are all reputable. They are all people who could do the job, and obviously there is no documentation of this. I could not find any in our records. They were the ones that were just assigned the project.

CHAIR: The department could not really - did you make an effort, since it was asked before, to find out how it was done or how it was selected?

MR. BENNETT: No, I can just say that there was a call made to the department, which we think - and I have to assume this because they could not tell me which one it was, whether it was either Works or Services.

If I could just digress a bit, there was a movement between the responsibility for, say, Pippy Park from works and services when Minister Matthews, at the time, moved into Municipal Affairs. It followed him and then, of course, when my minister took over, it transferred to Finance. It was during that bridge period, but certainly one of those lists was the basis for his appointment.

CHAIR: There is reference in the minutes of the Pippy Park Commission, on page 85, on the bottom of the page, "The Commission is responsible to ensure that TDC follows the procedures of the Public Tendering Act for the construction of this new facility."

Was there some concern there? We made reference the last day, I think, how landscaping of roughly $20,000, four separate invoices, all in numerical sequence, all invoiced on the same day, were done, and it raised the possibility. I know the Auditor General, in the report, did not say it violated it. He did not use those words, but it certainly raised concerns that there could be a circumvention of that. Also, with reference to the overall tender, to look at the proper audited documents and the evaluation of tenders, other than show the amounts listed, there was nothing to determine whether the best bid was the one that got the general contractor work either, or some of these other jobs through a public tender process. Was the Commission concerned also? I know they referenced it in the minutes here at their meeting. Why would it be an issue?

MR. MURPHY: I cannot really give you a definitive answer on that. We do not want to get confused here. I am not saying that it should not have been in the Public Tender Act but I do not, somehow or other, think, if you confusing the clubhouse and this particular building, it seems to me, was probably the canteen.

CHAIR: Yes, I know there is reference made in the expansion or the renovations there, but overall in compliance. The point, I guess, the reason is that the Commission did raise in their meeting about a concern, not necessarily a concern but about compliance with the Public Tender Act. I was just wondering if there was a concern about that, or whether it was being done. Why would it have surfaced at a meeting if it wasn't a concern? That is the extent of it, and I made some references to areas where there were possible violations to the Public Tender Act. I think there is insufficient supporting documentation to determine whether they were. I think something along that line was what the Auditor General made reference to.

WITNESS: We would have no way of answering that question, not being there at the time, but I would assume that where there are always new members to the Commission coming on stream this just may have been simply an information item for new Commission members to point out they are obligated to follow the Public Tender Act.

CHAIR: I think, too, at the conclusion of our hearing, as I suggested to some of the members before we started our meeting, I made a suggestion to the members here that what we could do at the conclusion, when we are finished our questioning here, is adjourn, and the Committee would meet and decide whether the Committee feels there are other people who could render information that is pertinent to answering some questions, and the Committee would make that decision. I do not think it is the time here to do it around the table, to get into that or have any new witnesses issued. That is something that the Committee could come back and deal with in a closed session of our Committee. We could look at that possibility. I guess, if it cannot be answered now, well, that is fine. We cannot expect you to answer it if you cannot. We just could move on to another question and we will just discuss that as -

MR. JOYCE: Mr. Chairman, the Chief Operating Officer stated that Treasury Board approved funding for the new Field House. It said, "The Commission is responsible to ensure that TDC follows the procedures of the Public Tendering Act...". It is only stating a fact. I cannot see why the Auditor General is suggesting there is something with the Public Tender Act, as you said. This is the Chief Operating Officer saying we have the money and we have to follow the Public Tender Act to do the work. This is just a statement by the CEO. You cannot make it any plainer than that.

CHAIR: Okay.

My next question: On page 61, one of the references in 4.27 at the top of the page is, "To provide to the Commission..." - that is the TDC - "...or the Commission's nominee, access to all of the financial records and books of account of TDC within three business days of a request therefor from the Commission to TDC's directors." Was that a problem?

MR. MURPHY: It is not a problem now.

CHAIR: I mean during the period of this audit, because there were some references made to that, I think, in the minutes and so on. I am just wondering, was there a problem?

MR. BENNETT: From the TDC's point of view, there was absolutely no problem. Two commissioners, as you know, at that time sat on the board of TDC. They had access to regular budget information, all the financial information of the board. To my knowledge, there was never a request made for a formal review of the books at the time, and these were all audited. KPMG were basically the auditors at the time, Pete Marrie. All of the information was available.

CHAIR: I saw some reference there. It is not something I am going to have a further question on.

MR. MURPHY: Mr. Chairman, I noticed in Ms Marshall's audit that she talked about Thomas Development under the management agreement, bringing forward financial statements quarterly. In our reference to it, sometimes it was done month to month and then we might have missed five months, or it was missed at that time. I can assure you right now that TDC has corrected that particular statement in Ms Marshall's audit, and we now receive at least six or seven financial updates from TDC.

CHAIR: I know the current Auditor General was Deputy Auditor General, I think, who oversaw this particular audit there. If there is something you could add to that.

MR. NOSEWORTY: The quarterly reports were are not provided as contemplated in the agreement. They were not. There were references, we saw in the minutes, to some information being provided by members, but there were no quarterly financial statements provided.

MR. MURPHY: That is what I just said, Mr. Noseworthy. That we got Ms Marshall's audit and we corrected it.

CHAIR: Yes, I think -

MR. BENNETT: Mr. Chairman, if I could just have a supplementary to that?

CHAIR: Certainly, Mr. Bennett.

MR. BENNETT: It is leaving kind of an implication that is not correct.

Where we made the mistake in those earlier years - at least when I was involved, I am talking about the period under audit review here - is we did not formulaize the process. Again, I just keep stressing the special relationship between TDC and its parent - I will use that word - which is the C.A Pippy Park Commission. The two members were certainly apprized and received financial updates at the meeting. Now, what we did not do was to write some sort of a cover letter and then send that formula to the Commission to be reviewed at the Commission's meetings. That is something that we now, I think between the two organizations, have to address. We basically now have a set - I think on every Commission meeting there is something to deal with the golf course. Anytime that I have financial information and I prepare a monthly financial statement, those things are communicated down through the Commission for review at their meeting. I think that is the point, and I am not trying to read into the Auditor General, but that is the way I understand his point.

There was no clear audit trail of a bunch of information tied to this agreement which showed the formal process in operation.

CHAIR: I cannot comment on what the Auditor General - other than draw my conclusions, too. I guess what you are saying, basically - just to make sure we are clear and then I will move on if we are clear on this. It is not that there were no reports, there was probably representatives of the TDC who sat on the Pippy Park. There was probably verbal reports on finances that were given by them or was that a written -

MR. BENNETT: Mr. Chairman, they were written. They were statements that were set before - financial updates by the then treasurer were given on regular meetings. Some of it verbal because obviously you do not need major reports with a small organization like that in the off season. Basically, you are just carrying forward until you start your operations again. They, I guess, were not formally communicated to the Commission.

CHAIR: Thank you.

On page 86, and I guess there is a follow-up on 94 and 102. There is just a sequence there. I will just make reference there.

There was a concern, too, that the Commission was using funds from its capital account for cash flow purposes. That is referenced in the minutes there on page 86, a special meeting of the Commission. Just a follow-up on that, on page 94. Dr. Warren, the Chairperson, in a letter to Mr. Hopkins, the COO, said, "Would you please arrange to transfer an amount, up to $100,000, from the Commission's Capital Account to its Operating Account to offset the projected deficit for the fiscal year 1999-2000. I will be continuing discussions with the Minister on this matter..."

Would that be the Minister of Municipal and Provincial Affairs? Would that be Minister Aylward at the time, I would assume? While you are looking there, on page 102, this is just all a follow up.

To the Auditor General, by Dr. Warren, it says, "Transfer from Capital Account to Operating Account." This was a letter of response: "In my opinion, I gave the Minister of Municipal and Provincial Affairs - I am assuming it was the minister - sufficient advance notice that the Commission would be in a deficit situation at year-end, and her Department, in turn, informed Treasury Board of the options put forward by the Commission." I guess the option was to be able to use capital funding, that was given for capital, to be able to use it for operating. "I feel that I was left with no choice but to transfer the necessary funds from capital account to operating." - Dr. Warren is indicating.

On the next page, "Field House Project - I believe that the funds were allocated for purposes other than the construction of a field house. The Treasury Board approval in this instance is, in my opinion, a generic description of several improvements to the golf course..." and so on.

There is a concern with using capital funding to meet your operating costs. I guess Treasury Board gives approval ultimately on this. Would that be correct? I think it -

MR. CURNEW: To my knowledge there was no approval given.

CHAIR: No approval at all? It was just used by Pippy Park Commission on their own without approval. Would that be - because there was a request for approval to do it, I think. Was that approval denied? Could someone just enlighten me on that?

MR. BENNETT: We are talking about the $100,000 funding. This is because we have four different projects here.

CHAIR: Yes.

MR. BENNETT: The $100,000 funding was advanced and both the Commission - the senior officers of the Commission anyway - and Thomas were certainly aware of the adjustments we made. The $77,000 Field House and the creation of the dance floor and the gate. To my knowledge - and I may have seen it since my minister would have been responsible - there was no communication back to the department which would have asked Treasury Board to approve the modifications. To me there was none. That was not done.

CHAIR: Okay.

MR. BENNETT: As I understand it, at the time - this is why, if you recall, I made a statement to the Auditor General at the last meeting. I am not sure that the contents of the TBN were fully communicated to the Chair at that time. In his view, when he responds in his letter here, he felt he did not need to go back. His view was he did not have to get back because it was more of a generic - as long as it was spent on the project, which was the Thomas Development. I know, to my knowledge, that has never gone back for subsequent ratification or was ratified before the projects were carried out.

CHAIR: Mr. Curnew.

MR. CURNEW: I would just like to clarify. What I was referring to was not the $100,000 grant for the construction of Field House, it was the transfer of the $100,000 from capital to operating. So, it was something different than what Mr. Bennett was just referring to. You had two $100,000 amounts.

CHAIR: Okay. Yes, there was one - the intent of my question was the transfer from a capital account into an operating account. That is basically - was there approval to do that? My understanding was that you could not do that. It was not the proper thing to do. Basically, it happened without - the Commission did it because they felt they needed to do it or were going to show a deficit, and we will use capital for operating? Isn't that correct?

MR. CURNEW: That appears to be correct, yes.

CHAIR: On page 97, Minutes of the 379^th Meeting. Could you just sort of enlighten us or give an overview? I know the Minister of Municipal and Provincial Affairs, I think Minister Alyward, received the Golf Course Report. This was, I guess, leading up to the renovation. I think it came to $200,000-plus, whatever the total cost. Appointed Mr. Reid to oversee. What basically were the responsibilities of Mr. Reid, overall? Was it just confined to basically this specific project? Could you elaborate on that?

MR. BENNETT: The role at that particular time, there was a report that had been carried out which basically confirmed the structure that we had. It made one brief recommendation to the fact that what we should do is to hire a professional golf management group to come in and take over the golf courses, and run it as a business.

As we pointed out to the person who made that report, that would have cost us a lot more money because if a fella moved in on a corporate basis you are going to end up with somebody wanting a profit at the end of the day, so we continued on. Essentially, then, it became - the work was of the project. which is the renovations to the clubhouse, two-hundred and some odd thousand.

CHAIR: So that is what Mr. Reid sort of oversaw?

MR. BENNETT: At that particular time, yes. That was (inaudible).

CHAIR: That was just a project that entailed that?

MR. BENNETT: Yes.

MR. MURPHY: Mr. Chairman, just for the information of the Committee, Mr. Reid had been involved between Thomas and government for some period of time in liaising some of the problems that the golf course were having in trying to stay alive so forth and so on.

CHAIR: Would that be prior to this, Mr. Murphy, you are saying?

MR. MURPHY: Oh, yes. All along he was very interested, apparently, in doing things for the golf course, so I would suggest to you, because of his background, all of a sudden this did not fall from the sky, that Mr. Reid was appointed by the minister. He had been involved along with the then board of Thomas Development and he was a liaison trying to do his best.

I do not know that you will find any minutes or any documentation that relate to that, but you will have to decide if you want to seek further information on that. It is my information, over years, that he gave very freely of his time. He was very much involved in the golf course from a standpoint of knowledge of what made up the golf course, and helped in many ways to try and improve and keep the golf course going and in good financial state.

CHAIR: Prior to this, in the spring of 2000, how long was he working as a liaison prior to his appointment to oversee this project? When would he have been involved? You indicated that he served as liaison for a period time.

MR. MURPHY: I could not give a definitive answer. All I know is that Mr. Reid was involved trying to help, like you or any of us here would try and help with something that we had a good general interest in, and he spent quite a bit of time, and I think that the former board of Thomas would concur with that.

CHAIR: In what capacity would he have been working as a liaison?

MR. MURPHY: He might be planting a flower. He might be talking to government.

CHAIR: It was not on behalf of government or behalf of Pippy Park, or was it?

MR. MURPHY: He was a sound, solid liaison between the golf course - which he had a great interest in. I would assume, and I can only assume, I cannot give you a definitive answer, but every time I was up there, prior to my appointment, Mr. Reid was around many times with the former board, trying to do things to help the golf course improve. Without remuneration, I might add.

CHAIR: Okay, so prior to his appointment he was doing a sort of liaison for a number of months or years, assisting in the operation or - I am not really clear on the roles.

MR. MURPHY: Mr. Chairman, let me say it this way to you, Sir. Hopefully, I can sum it up this way. It is simply this: He was involved, he had a general interest, and anything he could do to promote the golf course, he did.

CHAIR: Prior to his appointment to oversee the expansion?

WITNESS: That is right.

CHAIR: I am just wondering, for how long a period?

WITNESS: I have no idea.

CHAIR: Could Mr. Bennett enlight me on that?

MR. BENNETT: It was just for a period of months. It was basically that season (inaudible).

CHAIR: Prior to the previous season?

MR. BENNETT: No, when I say for the beginning of that season, from about January on, when you start to do your planning. He was involved to see what we could do to make improvements up there, because we had run into financial difficulty.

CHAIR: So he was not involved in 1999, we will say, or 1998?

MR. BENNETT: No, not to my knowledge.

CHAIR: So from roughly January of 2000?

MR. BENNETT: I would say. Please, do not hang me on the date of January. (Inaudible).

CHAIR: No, but that ballpark. That is fine.

MR. BENNETT: Let us say the spring, anyway, of that year.

CHAIR: There was no real official capacity, though, on anyone's behalf?

MR. BENNETT: No, not at that time.

CHAIR: Just as a volunteer, basically.

MR. BENNETT: Yes.

CHAIR: Then the appointment was made. I think there is a letter here confirming that appointment from the minister. I believe it is in this docket here.

What funds did Mr. Reid have access to? I guess the pot of money that was going to be used for this expansion, he was sort of overall overseer of that expansion. I think it was, what, roughly $275,000 or in that ballpark? He was responsible for disbursement of the account, approval. I see he signed off on numerous invoices and things here for payment, so he oversaw the payment of all these? Did he oversee compliance with public tender, everything pertaining to that particular project?

MR. BENNETT: Yes. In my view that was his role on that particular project. He liaised closely with the Commission, presumably through the Chairman, and also through the Chairman of Thomas Development at that time. Whether he was the person who was supposed to say whether there was full compliance with the Public Tender Act, or the consultant guidelines, or any other of the government regulations, I am not sure.

CHAIR: Okay.

Was he responsible, I guess, in the awarding of the tender too? As the overseer, I would assume he would have to give the final - I know he had the final signatures, they are shown here in the documents, on approval for payment. Did he approve the tenders, too, or was there someone else that approved each of these?

MR. BENNETT: As I understand, that was under his mantle as well, after discussion with these two other individuals.

CHAIR: Okay.

Thank you.

MR. MURPHY: I think maybe (inaudible).

CHAIR: Yes. In fact, I was trying to move in order as I went, but if you want to comment, sure. Go ahead, Mr. Murphy.

MR. MURPHY: After the letter of appointment, I think page 141 gives you an idea of the breakdown of - actually, it totalled out $276,000 but $270,000. We had a $6,000 deficit on the whole thing. It gives you a breakdown of what transpired in the monies associated with the transfer of the $270,000.

CHAIR: Thank you.

I had a question when I get over there. I will try to keep it in sequence here.

On page 112, it is a letter to Dr. Warren from Ms Alyward, the Minister of Municipal and Provincial Affairs. She is, "enclosing a cheque in the amount of $150,000 to provide operational funding for the C.A. Pippy Park Commission.... The long-term financial situation will be considered by Cabinet in the near future."

I think there was some report then to look at the long-term - I think on the next page, 113, Dr. Warren to the minister. "It is comforting to note from your comments that Cabinet will shortly be considering the longer-term financial requirements... with a view to providing for more stable funding for the operations of the Pippy Park Commission."

Then on page 114, it is all tied in in sequence. Under (d) "Mr. Hopkins reported that it is his understanding that Mr. Robert Smart has been assigned by the Minister to review the operations of TDC, and to file a report to the Minister on how to deal with the golf course operations in the future." Was the report filed? What did it indicate for the future operations there? Because I know at the time - I guess I will just preface my rationale behind this because I know TDC has indicated it was having financial trouble - there are several references here in the minutes - and Pippy Park Commission was having difficulty generating sufficient revenues to break even. They had to continuously waive fees to TDC back to the Commission, and sell land to use it in operation and things. I guess the purpose of this was to see what the future is and look at the prognosis and come forward with some recommendations as how to achieve the most efficient operation, I would assume. What happened as a result of that?

MR. BENNETT: Just to give you sort of a brief history of what happened here. Once TDC was not in a position to pay the management fees and the two years were waived, then that created a major hole in the Commission's budget. The special funding request and the long-term future request for the Commission was related to that. How do we go forward and how do we get sufficient funding to carry out the programs, other than the golf course? In the case of Thomas, basically we could not pay the $250,000.

CHAIR: You are speaking on behalf of TDC, basically, Mr. Bennett?

MR. BENNETT: With regard to Thomas, there was a report prepared by Mr. Smart, and I referred to that earlier. He made a recommendation that it probably should have been contracted out into private hands. As I said to you earlier, we felt that if you did that then whoever the independent operator would be, would want a profit at the bottom of the line. Since we were a volunteer board, and we were having difficulty meeting our expenses as it was with a volunteer board, that we felt an independent private contractor would not be able to do anything better and we proceeded on that basis. So that is the reference here to the Bob Smart report, and that was agreed by government.

With regard to the Commission, what happened at the end of that - and we have already made some reference to it - the MC did two things: One, waived the management fee - I think it is the 201 MC - and also agreed to take the lands that were basically owned by C.A. Pippy Park. They used that as a way to fill the void left by the Thomas Development lack of payments. So, the action to get the Commission over the hump was to allow them to use the land sales that is currently made - and made reference to earlier in the report - to fill the void created by Thomas.

CHAIR: I think too, Mr. Bennett, there was reference made to - they were going to look at dealing with the long-term financial situation. Was there anything happened from the report? I know it has been operating from year to year. How much is needed? You sell land, you put it toward it, we waive the fee. Was there something looked at in the long-term, or any long-term plan laid out, or exactly where it would fit in the scheme of its future viability?

MR. CURNEW: The Commission is in the process now of finalizing a revised management plan. Within that plan there are a number of initiatives that the Commission has undertaken to examine further as possible revenue generating mechanisms. What it has done, it has identified a number of possible mechanisms to increase revenues and determine that it will pursue those in terms of doing some feasability studies and see what the profitability is as a mechanism to raise funds for the future.

CHAIR: Okay. So, basically, the viability is looked at as enhancing your revenue. I guess there is not much flexibility in the expenditure line, I wouldn't assume, because you need so many personnel to operate it. I guess basic promotion to encourage or enhance usage, et cetera, along those lines, and the facility itself up there too, to bring in revenues. It is a lovely facility up there. To maximize its use there too, would that be a part of it or is the responsibility of TDC to increase the fees? That revenue would go through TDC. How would that benefit overall?

MR. MURPHY: Mr. Chairman, you are really spot on. We have dealt long and hard at this trying to increase our revenues to make ourself more stable, like any business as such. We have increased our ability to our trailer park, as such, R.V. park. Now the overflow hopefully will be in the main. We have other objectives to move forward with, to increase revenues and so forth. We constantly deal with that from a financial promotion subcommittee within. It is not always easy because of the way Pippy Park is seen within the legislation and the way the public looks at it as almost property for use without charge, but we continue to move forward in cross-country skiing. Any avenue that you can possibly think of, with that property up there, we have discussed trying to increase our revenues.

CHAIR: I guess with reference to increasing usage and so on, and green fees and that usage, that would really improve the bottom line of TDC, basically, as opposed to improving the bottom line of C.A. Pippy Park Commission.

MR. MURPHY: We have to stay competitive, Mr. Chairman.

MR. BENNETT: Yes, you are absolutely right; if we could, it would improve us and allow us to pay our debt and be more solvent than we currently are, but please appreciate that as part of this agreement, and it is a non-profit organization, that all surplus funds flow into the Commission. So, if we could ever get the rounds - and I keep harping on that for those people who are interested - back up to 58,000, roughly, from currently 40,000, then there could be a flow back into the Commission. I do not think we could ever get close to paying them $250,000 as well as cover, but we could certainly make a bit of a contribution to the bottom line of the park.

CHAIR: A statement, I think, was made the last day when I asked a question, and the answer I got was an adequate answer but it arose when I wanted to ask with reference basically to, I guess, the bottom line. I think you mentioned that, well, if you let TDC collapse, obviously it will come back to the Commission and then we will be negotiating with two different groups of people and you would not want to see the facility, with its value - I think you mentioned $10 million or $11 million value, I forget.

WITNESS: Anywhere from $9 million (inaudible).

CHAIR: It is an asset - or $9 million. Now, what is included in that asset? Because at the time I just made a metal note to ask the question. That is the total asset, is it, under the control of C.A. Pippy Park, which would include the trailer area, or is that just the golf course?

MR. BENNETT: That is the golf course and all facilities on the golf course.

CHAIR: Okay, strictly the golf course.

Other areas, I guess, would have a different asset value. They would be under the C.A. Pippy Park Commission, of course, these other ones?

MR. BENNETT: Yes.

CHAIR: Would they be directly reflected? It is really an asset of C.A. Pippy Park initially, isn't it, I suppose? If you are looking at the global picture, I guess, you are taking in the whole facility, the whole surrounding area, which would have an immense value.

MR. BENNETT: No question.

CHAIR: That is strictly to that.

MR. BENNETT: Again, let me refer you to the act, Mr. Chairman, and the act has not changed since its inception between Mr. Smallwood and Mr. Pippy. It has not changed, not a comma, not a sentence. Not a comma has changed, and the intent of the act is still there for education, government buildings, and it goes on and on and on. It did, three years ago, or two-and-a-half years ago - Ken, correct me if I am wrong - have authority to move the core of the park in and leave some properties that the Commission owned outside of Commission boundaries, and authority was given in a MC which is contained in your booklet here to go ahead and supplement ourselves to stay alive, to sell those properties. By and large you are 100 per cent correct, the integrity of Pippy Park has not changed even though it has gotten a bit smaller.

CHAIR: One of those properties, I guess, is where we made reference to the contingent liability. That was one of the areas that, I guess, was in the sale. Would that be referenced in the statement? It is not really pertinent to the line of questioning, but -

MR. BENNETT: That piece of property, Mr. Curnew can tell you its value better than I can.

MR. CURNEW: The contingent liability - the forty acres you are referring to - is actually in the area that is now excluded from the park. It is deemed to be surplus to the park's needs.

CHAIR: Thank you.

On page 141 there is a list of vendors. It shows the total cost of these renovations of the clubhouse for $276,000. I guess the question I wanted to ask was: Were all of these tendered?

WITNESS: (Inaudible).

CHAIR: I guess what I meant, to look at it, either proposals or publicly tendered. Some would require it, because of the amounts of these. What happened with the tendering on these, for example? The overall bid, I think, was Jim Neary. One question that was raised was: Where is the support for the qualifying bids? The Auditor General referenced, I think, in the report, the supporting information to show - the exact words, I guess, are in the report - to substantiate the bid. I think there was reference made to that, Mr. Noseworthy?

MR. NOSEWORTHY: The report, page 126 of our report, which would be page 4 of that report, in the conclusion, we said, "There was insufficient documentation at the Commission to support approximately $265,000 of the $270,000 spent on the clubhouse renovations in that there were no purchase orders or tenders. As a result, we could not determine how the various suppliers were selected and whether a fair and reasonable price was established." That was our conclusion.

CHAIR: You have asked, I would assume, Mr. Noseworthy, for supporting documentation, and they could not provide it? Would that be -

MR. NOSEWORTHY: Yes, we certainly did ask and we were told by the Chief Operating Officer at the time, by way of a note to a staff member of my office, and I quote: I do not have anything in my files to indicate how particular suppliers were selected. Quite often the projects were underway or completed before I was aware of them.

They had no documentation and, as a result, we could not make any determination how the suppliers were selected. Whether or not they were tendered, we just do not know.

CHAIR: It was mentioned here earlier, I think, that Mr. Reid oversaw the total expansion. He had the responsibility for the tendering and the signing off on these. Was an effort made with Mr. Reid to get supporting documentation through Mr. Reid?

MR. NOSEWORTHY: When we inquired at the Commission, we did ask to make sure they contacted everybody - Beaton Sheppard, Mr. Reid - whoever was involved in this, and make sure that before we conclude our report that, in fact, we have gone every possible route in trying to get the documentation. My understanding is that they went everywhere they could, came back and concluded that: Look, there was no documentation available. We reported that and we stand by that.

CHAIR: Did the Commission itself have an opportunity to look? I think you made reference earlier to it. My understanding is, you did not see the tender documents, the bids, or evaluate them, or have an opportunity to have information on that. Would that be correct? Could you just enlighten me on that?

MR. CURNEW: I believe the problem here, in large part - at least for the major piece of work - was the lack of the tender analysis documentation. Basically, the documentation is there to show that tenders were called. I believe the point was, if I am not mistaken, that the analysis associated with the wording of the tender could not be found, at least for the major portion of the construction. Some of these items are not required to be tendered in this list because of the amounts, or the type of expenditure. The others - we have provided the documentation that we could find. So, basically, the answers that we gave before - the explanation that Mr. Bennett gave before, for instance, as to how Beaton Sheppard was selected under the consultancy guidelines. He answered that response earlier. We have not been able to, as was pointed out, find any more documentation since this report was complied.

MR. MURPHY: The real difficulty, initially, was trying to find the original tendered document. It was not in our files. Our administrator, Mr. Curnew, had to go down and search. If you look on page 138 you will see, as per the Public Tender Act, tender notifications. Page 138 is the original one. You will see on May 6, 2000 in The Telegram, a tender call: Extension And Renovations Admiral's Green Clubhouse (Golf Course) Pippy Park, et cetera. It was called by Beaton Sheppard who was then the hired consultant for Thomas Development.

If you go back to page 141 you will see Beaton Sheppard, his amount as a consultant under the consultant clause. Then you will see, as a consultant, he was responsible for the administration of the awarding of tenders within his tender. So what you are seeing here with Jim Neary and all the rest of these people, he went along with that. The invoices pertaining to that are all contained in this document.

MR. JOYCE: Mr. Chairman, are we talking about the extension and the renovations of the clubhouse?

CHAIR: Yes.

MR. JOYCE: Page 158, I mean I do not know what the confusion is.

CHAIR: Yes, I think -

MR. JOYCE: It is there where who bid it, and what bid it, and the lowest tender was Jim Neary Limited.

CHAIR: Yes, but the point - I think we raised this the last day, too -

MR. JOYCE: It was in the paper.

MR. MURPHY: All I am saying, Mr. Joyce, is if you take it from step one with the original tender associated with Beaton Sheppard, consultant, then there is a pretty consistent flow on expenditures throughout the document.

MR. JOYCE: Then on page 158 it shows who put in bids and what the cost of the bids were. So I do not know how anybody can say it is against the Public Tender Act when it is right here in the document that everybody bid on.

CHAIR: Well, the last day we dealt with this, too. The Auditor General had a comment that, while the amounts are here - I am not going to speak for the Auditor General. I would like for him to speak for himself on this, which on the last day we discussed that. He indicated all - and it is here as he just referenced - $265,000 to $270,000 there were no purchase orders or tenders. They could not determine how they were selected and insufficient documentation, I think. We did deal with it. Maybe you could reiterate what we said at our last meeting, before we adjourned on that.

MR. NOSEWORTHY: Yes, we acknowledge that there was an ad in the paper and we did see page 158, which included some references to tenders. However, if you take it from step one there is no documentation in the first instance to explain how Beaton Sheppard was selected. That is the first point.

MR. JOYCE: They already explained that tonight how Beaton Sheppard -

MR. NOSEWORTHY: There is no documentation. If you were following consultant guidelines you would have to retain documentation in a department so that you could go down through the process and see that due diligence (inaudible) was applied and that the consultant was properly selected.

MR. JOYCE: Did you ask the minister on that?

CHAIR: You have to go through the Chair on questions. I recognize Mr. Joyce.

MR. JOYCE: Did you ask the minister because - and it is the same in any department. It is not fair for the Commission here, is that the minister in any department - for example, if we are going to do schools he has a list of consultants who are qualified, and they are usually picked because they are all qualified.

MR. NOSEWORTHY: The documentation -

MR. JOYCE: My question to you is: Did you ask the minister how Beaton Sheppard - because obviously the minister or the department is the one who picked Beaton Sheppard?

MR. NOSEWORTHY: We asked the Commission for documentation but there was nothing available. We audit this in departments. In Works, Services, for example, I use this quite frequently. They hire consultants to coordinate tenders. However, all the documentation on all the tenders would be coordinated by a consultant. Everything is kept on file and we can go through to make sure that everything was let properly.

We do not approach ministers directly and ask ministers for copies of documentation. The bureaucrats in departments have the documentation in the files and we audit those files. That is where we get our documentation. We ask the officials. If they do not have it we expect them - if their ministers would have it - to get it, but we deal with the senior government officials. That is how we do our audit work.

CHAIR: You did not get information to substantiate, to draw a conclusion, as to whether Beaton Sheppard would have been the preferred consultant?

MR. NOSEWORTHY: Yes, that is in the first instance. Then if you carry that forward. So now we have Beaton Sheppard putting an ad in the paper. We do not know how Beaton Sheppard was selected because they have an ad in the paper calling tenders. Then we get a sheet of paper that says some people responded to the tender. Well, there is no supporting documentation underneath that list so we can go through it to see what people actually submitted. We have a sheet of paper, and that is not sufficient. We would not call this sufficient in any government department or any government agency. This just does not cut it. You need documentation to explain and to show what happened. It just was not available. So we concluded that we could not determine whether or not there were purchase orders, tenders - somebody referenced that not everything here is above the threshold to be tendered. Well, there is a requirement that if it does not have to be tendered you need three quotes. That was not available either. There is just no documentation to support how any of these people were selected. It is just as simple as that. There was no documentation available.

CHAIR: In other words, there is nothing to show that the Jim Neary bid or the one next to the Jim Neary bid, that they were exactly apples and apples, exactly what was included in the bid was there? There was nothing to back up that.

MR. NOSEWORTHY: That is right. We could not determine if they were qualified bidders or anything else. We had no documentation, so we do not know if they were qualified or not.

CHAIR: You requested it, but you did not get it provided.

MR. NOSEWORTHY: We requested, we waited, and the Commission came back and concluded: Look, there is nothing here.

The Chief Operating Officer wrote us a note, actually put it in writing, which I read already. They just did not have the information.

CHAIR: Who approved all of those tenders? Can somebody tell us who approved those? Where there were tenders, we only see the general tender. To my knowledge, there were no posted tender call for anything else other than the general contractor. Would that be accurate? I could not find it here.

WITNESS: Mr. Chairman, in concurring with what the AG had to say, I am not going to argue with the Auditor General, he knows more than about this business than I do, but let me say, whatever caused Mr. Sheppard to be selected as a consultant, Mr. Sheppard is not from Kelly's Island. He is known long around this city, so Mr. Sheppard is here as calling the tender as a consultant on behalf of Thomas Development.

If we go through, and again it is only an assumption on my part because again I was not there, Mr. Sheppard awarded, as per Mr. Joyce's statement of page 158, I think it is, and there is not, according with what Mr. Noseworthy, the AG, is saying, enough documentation here to award the contract to Mr. Neary. I have to take the Auditor General at his word, but I still see here, as I think most people see, some continuity and some - you know, I was not there. I cannot speak to it.

CHAIR: It is my understanding - we will move past Beaton Sheppard - there is nothing to indicate that Beaton Sheppard would have been the preferred consultant. There is nothing to back it up. It could have been that he was, but there was nothing supporting it there to draw that conclusion.

I think that has already been indicated the last day and today. We will move beyond that. Now that Beaton Sheppard is the consultant, where is the information to show that all of these, whether subcontractors, submitted proposals or went through a tendering process for all the work that was done? Where is the documentation? It is my understanding that the Auditor General's Office could not get that supporting documentation either. Would that be accurate, Mr. Noseworthy?

MR. NOSEWORTHY: There was no documentation to support any of the money; $265,000 -

CHAIR: Mr. Curnew or Mr. Murphy?

MR. CURNEW: That is right, we could not find the documentation either, so I cannot answer that question.

CHAIR: It had to be in one of two locations. It had to be with Beaton Sheppard, who was the consultant, or Mr. Reid, who oversaw the whole project. Would that be logical to say, that it had to be one of these?

MR. JOYCE: Mr. Chairman, could I just - if buddy, whoever it is, got the contract, if he is the general contractor, he does not need to tender anything else because it is up to him who does his work.

CHAIR: No, not when the general contractor was for a certain amount and all these other contracts were paid over and above the amount of the general contractor. They were separate. Then it is very much so - there is $276,016.86 of public money there, of which we do not have necessary documentation on who the consultant was, even to substantiate that the general contractor got the job or if any of these others, Murray's Horticultural, whether all these other areas there - Jen-Mar, any of these - were tendered, were proposals. The Pippy Park Commission cannot find the documentation and I am asking where it is. Maybe that is the reason why we will come back to the Committee, certainly we can come back after and discuss in Committee, at a closed meeting of the Committee, whether there are other people who are able to shed light on this to find out what really happened. Mr. Murphy and Mr. Curnew were not there at the time and it is not in the records that they have. Somebody has to be able to answer the question, is the point. There are a lot of unanswered questions, so I think that is a matter for our Committee to deal with and we will not hassle over that here on your time. I think it is something that we need to come to grips with.

MR. MURPHY: Mr. Chairman, if you are making an assumption, either Beaton Sheppard and/ or Mr. Reid or whatever, I can say nothing to that. That is your assumption. The only thing that I can say, Sir, is that if you look all the way through and look at different invoices from O'Neill's and others that have been approved and signed, you will have to draw your own conclusions.

As I said to you, I did not deal with this paper. I did not deal with the meetings associated with it, and I do not think my colleague, Mr. Curnew, did either. I know that Mr. Bennett did not deal with them either. He may have some vague knowledge. You are asking us to be very direct and we cannot be, Sir.

CHAIR: No, I understand.

The questions I need to ask, basically, I cannot go any further than the question. I understand that and I am going to stop asking questions on that, basically for that reason, and we will discuss it in Committee after. I am going to give anybody else an opportunity now who would like to ask some questions. Does anybody wish to ask further? I know we dealt with it fairly extensively before, but if some other people want to ask questions now I will invite other members here to do so.

MR. FITZGERALD: I am just going to ask a couple of questions, Mr. Chairman, because I missed the first meeting. Not to be repetitious of what was happening then, I would just like to go back to Mr. Stick's golf driving range here. Is that wholly and solely a private operation? Does Pippy Park or does TDC contribute anything toward that operation?

MR. MURPHY: Without introducing yourself, I think I remember your face. Mr. Fitzgerald is it?

MR. FITZGERALD: Roger Fitzgerald, I am sorry, Mr. Murphy.

MR. MURPHY: I though I might remember you, Sir.

Candidly, the property is owned by Pippy Park. We had an arrangement some years with Mr. Stick to use that property as a driving range. We went into an agreement with him for x amount of dollars and we negotiated last year some extra monies for the Commission; again, I say to you, Mr. Chairman, trying to increase our revenues. Mr. Stick is an approved professional golf - I do not know what his criteria is, and I do not want to ask Ms Murphy because I know she probably knows more about it than I do.

MR. FITZGERALD: She knows more about golf, I am sure of that.

MR. MURPHY: That is right, and it is like you and I with fish or FPI or whatever the case might be.

I would suggest to you that Mr. Stick is a qualified golf professional and he does a lot of work with people who play golf on the hill and in other golf courses around the city.

MR. FITZGERALD: I am not asking a question as far as Mr. Stick's ability or his profession. What I am asking is the nature of his business there. Is there any contribution that comes from TDC or Pippy Park Commission in order to carry out that activity there - financial help?

MR. MURPHY: No, we do not give Mr. Stick any financial help outside of the fact that we do maintain the property.

MR. FITZGERALD: You supply the property and maintain it.

MR. MURPHY: Yes, it costs us. No, we charge Mr. Stick a fee for use of the property because he has a decent source of revenue from anybody who goes up and hits 100 balls or fifty balls, what have you, and we do our best to maintain the property for him, keep it up, and it is a mutual agreement because if Mr. Stick was not there, there would not be any source of revenue for the Commission as such because it is well under the hill of the golf course and, I would say to Mr. Bennett, we could not afford to have a full-time golf pro there, who would stay there looking at whatever, Mr. Fitzgerald, revenues that would come out from the golfing public. He just would not be able to do it.

MR. FITZGERALD: Going back to some more of those invoices there, on page 253 there is an invoice submitted there from O'Neill's Gardenland on August 30, for $5,750.

CHAIR: Mr. Fitzgerald, I will just mention, because it is in the record there and I think I mentioned earlier today that -

WITNESS: (Inaudible)?

CHAIR: Yes, it has.

These four invoices in numerical succession, I think I mentioned today, too, and previously, are in numerical succession and they are on the same date. They are all for landscaping to the tune of a little over $20,000, and there is perceived - perceived - there is no information to substantiate otherwise, each one separately is under the Public Tender Act but collectively all were invoiced successively, all on the one date that it is made out. We asked the question, would it be contravening? That suspicion was raised and they had no supporting information to indicate it was not. We did deal with that, I think, reasonably and throughly, but if there was something there you wanted to -

MR. FITZGERALD: No, that was the reason for my questioning. Certainly you had them all together and they are above the -

MR. MURPHY: Just for your information, just outside of the fact that you may have a question related to the invoicing, at that time, Mr. Fitzgerald, within weeks, the golf course at C.A. Pippy Park was hosting a national tournament. The national tournament, of course, was bringing golfers from all across Canada. At that particular point in time, there was a tremendous amount of dressing, I guess, for want of another word, that had or needed to be done to the golf course.

In my conversation with Mr. Reid and others, at that particular point in time, other people were contacted, and when I say other people, I am talking about our friends over here in Churchill Square, Allandale Nurseries and so forth and so on, and the response was, from these people, that they did not have enough material left, at that particular point in time, to supply the golf course and supply their regular customers so it became a pretty critical issue for someone trying to host a national tournament. Now, that has nothing to do with the invoice here. I am just trying to explain to you how sometimes if you turn another page or you talk to somebody you get a little more information.

CHAIR: Mr. Fitzgerald.

MR. FITZGERALD: Just one other question. I think it was Mr. Bennett indicated that the golf course was doing 56,000 or 58,000 rounds of golf two years back, and today you are down to 40,000 rounds. What is the difference? Is that the number of rounds of golf that are played or the number of rounds of golf that are paid for?

WITNESS: I am talking about the number that is played. We do a track of that particular thing, and there has been a major decline, and I think I mentioned this at the last hearing, Mr. Chair. The first one is, of course, the general competition we now have in the area. We have Clovelly which has become well established. The Woods is becoming well established, as well as The Wilds, for instance, and the one at Salmonier.

The other thing is, we have had two horrendous seasons. I do not know what you people do for your recreation, but we have had nothing but high winds or heavy snow. Both of those have, unfortunately, hurt us by either starting later, because we have had to get rid of the snow and our season has been shorter because of it, or stopping sooner, last fall, for instance. I mean, you had to be a real ardent golfer to play, in my view, in September and October, on a hill exposed to the winds we were receiving. You would hit balls into the wind there and you would walk back five or ten steps to pick up your drive even though you hit it well. These two things combined, but certainly the general, I guess, downgrading in our annual golf rounds, and we depend, if I might add, solely on green fees. We do not have an established membership like some of the other clubs, like Bally Haly or Clovelly, that gives us a floor on which we can operate.

Because of those two factors, there is no question that the competition is keeping us now at a lower level, and that has made it a very difficult operation to keep going.

MR. FITZGERALD: Is the downturn in both courses there, the nine hole and the eighteen, or is it predominantly on one or the other?

WITNESS: Basically, surprisingly, the eighteenth hole has taken the biggest battering. The nine hole had declined as well, but not to the same extent. There are some very loyal golfers who love to play that thing, thank God.

CHAIR: Mr. Fitzgerald?

MR. FITZGERALD: Okay.

MR. MURPHY: Just to add something else that I mentioned the other day, Mr. Fitzgerald, again, every corner has a service station now. I do not know, Sir, if you remember some years ago, at 4 o'clock in the morning there were people up on the hill waiting to get on. That does not exist any longer. The competition is much keener and, of course, one of the other problems that we have from a revenue standpoint - not a revenue standpoint, even though we are down 20,000 rounds - is our golf course is paying approximately $4 an hour more to our maintenance workers than every other golf course except Bally Haly, because we have a collective agreement and Bally Haly has a collective agreement. Those are the only two golf course that are involved with a unionized workforce.

MR. FITZGERALD: Just a general question, since you have some knowledge of golf courses. Do you feel we have reached the saturation point in Newfoundland when it comes to golf course levels? There is a fellow in my district now cutting out a golf course, using his own money up until now. You know, there is a fair amount of interest in it there. It is on the Bonavista Peninsula.

WITNESS: A great Peninsula.

MR. FITZGERALD: No doubt about it.

MR. MURPHY: The short answer, Mr. Fitzgerald, is: If I had the money, Sir, the last thing in the world that I would do is invest it in a golf course, unless you really have a lot of money.

MR. BENNETT: If I may answer that, too, because we could fight amongst ourselves, I am very optimistic about golf.

One of the things - as you get my age, I have been at it for fifty-forty years and still have not gotten much better, but I still love the game - the St. John's area is definitely saturated. Now, the great thing about the St. John's area from a very personal point of view, a selfish point of view, is the migration that is coming in here. So, in three or four years we will start to return, I believe, to the levels we once had. To extend the golf courses in various regions of the Province, I think, is tremendous not only for tourism, but - the trouble is, and the biggest example I can give you is in the Clarenville situation, which is a beautiful golf course. If you like the game at all, you should play it. The trouble with that is, often you cannot get on that course because of the number of locals that are playing that course. Everybody who plays golf, I do not care what your profession is or what your education is, you love the game.

MR. FITZGERALD: You are talking about Hatchet Cove.

MR. BENNETT: You are talking about Hatchet Cove and I am even talking about Terra Nova. Terra Nova used to be the hardest place to get a round of golf in, and it was not because of the flocks the tourists out there. It was the local people suddenly realized what a wonderful game this is. Anyone who plays golf knows that.

There are areas where you can develop golf courses and I think be quite successful, but certainly in the St. John's area we are pretty well at the saturation point.

CHAIR: Are there any other questions? Does anybody wish to ask any questions? If not, we will conclude questions.

I would just like to indicate, until the Committee meets there - because there are some things I would like to take back to the Committee. If we could adjourn it, there may be no further meetings. That will be decided in Committee, and we will deal with that as a Committee.

I certainly thank you for your time.

MR. MURPHY: Thank you, Mr. Chairman.

I just want to say this for the record: We are constantly and continually trying to do things at Pippy Park. We just had a conclusion with our friends of the Grand Concourse Authority on the future of Pippy Park, which will be presented to government very soon. From our standpoint, and from others, we had general meetings and so forth and so on, on input. We are still trying to intensify and increase our revenues, and trying to become more and more viable.

CHAIR: Okay.

Thank you again.

On motion, the Committee adjourned.