Tewin: Why An MOU, Not A Contract? BENN

Former finance executive and CPA Ron Benn takes an expert’s view of the controversial memorandum of understanding between the Tewin Landowners and the City of Ottawa.

To reference the document, click here

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I read the MoU over. Once quickly, then back through what I perceive to be the key clauses.

There is a minor reference error within the document. Paragraph 29 refers to termination per paragraph 30. Paragraph 30 makes no reference to termination. Paragraphs 33 and 35 talk to termination. This clerical error should have been caught by someone. That speaks to the lack of quality review by people who were not directly associated with the drafting of the MoU.

Of note is that per paragraph 35, the MoU can be cancelled with three months notice. Councillors might want to have a draft notice prepared.

Paragraph 42 should raise more eyebrows than just mine. It states that while this agreement takes the form of an MoU, it is as legally binding as a contract. More on that in a moment.

The MoU was signed on behalf of the city by Don Herweyer, former acting general manager, Wendy Stephenson (pictured on front), in her then capacity as chief financial officer/treasurer, and by then in-house city legal counsel, David White, on September 22 & 23, 2022.

The key take away from my cursory review revolves around paragraph 42. Did the city management (see signatories above) decide to use an MoU format because they lacked the authority to sign a formal contract? Is it because a formal contract would have required more eyes on it, perhaps a political authorization before signing? Is it because management was worried that if the agreement had a higher profile, it would increase in the inherent risk that the agreement would become known. As it just did, some 20 months later. Not that I am asking Capital Councillor Shawn Menard to reveal his sources.

• A prudent councillor or 25 might want to ask Stephanson, the current city manager, and Don Herweyer, the former general manager of planning, at the very next council meeting (in June 2024) a whole lot of questions, including:
• why did the city decide to use an MoU instead of a contract;
• were you instructed to use an MoU by a superior officer or elected official, or someone in the mayor’s office;
• if so, did this not seem peculiar to you, raise some dark orange, bordering on red flags?

See if you can get the recently retired David White to attend for questions. Don’t be surprised if he is out of town, on short notice.

Council needs to point out, up-front, that they will not accept obfuscations or deflections. No room for “I don’t recall”. That instruction is not just for Stephanson. It is for everyone around the council chamber … just in case one or more of them knew about this but chose not to share than knowledge.

Oh, and depending on their answers, they might want to look for an executive search firm. Because if Stephanson and others say “the devil made me do it”, then they have just told the public that they lack the requisite integrity and judgment to be a senior manager.

Ron Benn, a finance executive, has been a member of the Centrepointe Community Association for the better part of three decades.