Richard T. Lorello c/oCityofVaughanCitizensGroup(CVCG) 235TreelawnBlvdPO927 Kleinburg,Ontario L0J1C0 June 27, 2009 SENT VIA E-MAIL City of Vaughan 2141 Major Mackenzie Drive Vaughan, Ontario L6A 1T1 Attention: Clayton Harris, City Manager Gino Rosati, Councillor and Chair Audit Committee Suzanne Craig, Integrity Commissioner
City of Vaughan Citizens Group: Concerns with Regional Councillor Joyce Frustaglio Expenses Office Equipment & Furniture
Responses to my previous letters still remain unanswered despite [1] the Citys policy (Policy no. 0 3.26: Response by City Staff to Requests for Information from the Public). We continue to await your response and invitation to meet and discuss our concerns. Interest in the objective of the City Vaughan Citizens Group is growing and as such, we will continue to bring information to the public. At this time, we will continue to highlight the expenses of Senior Staff and Councillors. We understand that certain Councillors have allegiances to one another and despite the accountability they have to City taxpayers, they will continue to ignore taking the responsible measures incumbent on them. In fact, some have suggested that certain councillors couldnt care less what the Citys taxpayers think about their spending. It is our expectation that in making these expenses public, a formal audit of past expenses and practices will be conducted. We are confident that the audit will ultimately identify policy violations and lax enforcement protocols by those charged with the responsibility of enforcing such polices. We further believe that Revenue Canada contraventions and examples of fraud exist in relation to various expense policy sections and forms, for example: "2.1 Public funds may not be expended for personal use, non-City business use, campaign or election related purposes." "4.1.13 Reimbursement of expenditures for cellular telephone charges, 7 charges and mileage. It shall be the responsibility of each Member of Council to retain supporting invoices and documentation. Please note, under Canada Customs and Revenue Agency guidelines, mileage from home to and from the place of work is considered personal mileage and therefore is not an allowable expenses." Reimbursement Form: Declaration:
[1] April 28, 2009-Request for an External Audit; May 5, 2009 Planning Audit
I, the undersigned, hereby state, that I have incurred the expenses note above while in the conduct of business related to Council and the Corporation of the City of Vaughan and that these expenses are not recoverable from any other source. The expense concerns discussed in this letter will focus on Regional Councillor Joyce Frustaglio, in particular, Expense Account 7210: Office Equipment & Furniture & Office Renovations used from her city assigned budget and the City Clerks Council Corporate budget.
EXPENDITURE CONTRAVENTION HIGHLIGHTS Council Budget/Expenditure Policy (01.14), sub-sections: 2.7 Members of Council and their Staff will be provided with all furniture and office/computer equipment (including Blackberries, palm pilots, home internet access) required to carry out their duties to a standard compatible with the rest of the Corporation. Members of Council offices will be redecorated at the commencement of each term of office, upon request, to a maximum of $3,500.
The following are highlights related to equipment and furniture expenditures by Regional Councillor Frustaglio. It may not be a complete list of all furniture purchased, as there was difficulty in locating these due to their being charged to another account code. It is our position that Regional Councillor Frustaglio has abused taxpayer funds in her outlandish spending of office furniture to fulfill her own ego. Her spending is not consistent with the furniture provided to neither senior management nor other councillors. Visit Brampton Galleries and compare for yourself:

In fact, Council Budget/Expenditure Policy (01.14), subsection states: 2.7 Members of Council and their Staff will be provided with all furniture and office/computer equipment (including Blackberries, palm pilots, home internet access) required to carry out their duties to a standard compatible with the rest of the Corporation.
In referring to this subsection, consider the following expenditures.
Joyce Frustaglios Rugs Date March 9, 2004 December 29, 2006 Description rug Area Rug (6.2 x 4) Account/ GL 010015.7210 010015.7699 Seller Home Sense Art of Persia Price of Invoice 206.99 684.00
It would be interesting to find out if other Councillors have purchased Persian Rugs for their offices, notwithstanding everyones office is fully carpeted and steam cleaned by outside contractors on a regular basis.
Joyce Frustaglios Furniture Expenses Date March 11, 2003 August 31, 2004 January 24, 2004 January 24, 2004 January 24, 2004 March 2, 2004 March 11, 2004 March 31, 2004 December 31, 2004 December 4, 2006 December 4, 2006 December 30, 2006 Description Office Depot Office End Table Desk Credenza File Plant Stand Love Seat & Chairs Barrister Bookcase by Hooker (not provided yet) Server Coffee Table File Cabinet by Hooker Account/GL 020020.7210 020020.7210 020020.7210 020020.7210 020020.7210 020020.7210 020020.7210 010015.7699 010015.7699 010015.7699 010015.7699 Seller 2 Drawer Lateral File The Bombay Company Brampton Galleries Brampton Galleries Brampton Galleries Brampton Galleries Dcor-Rest Brampton Galleries De Rosa Art Brampton Galleries Brampton Galleries Brampton Galleries Total Price 199.99 550.85 1,890.00 2,160.00 350.00 132.25 1,587.00 2,012.50 900.00 350.00 650.00 1,300.00 $ 12,082.59
Below are just a few examples of a line of Hooker office furniture. The furniture is extravagant and clearly NOT in keeping with the standard compatible with the rest of the Corporation. This is very poor judgement on Councillor Frustaglios behalf, regardless of who approved it and despite the availability of a policy dealing with this very issue. Oddly enough, not even the Deputy City Manager and newly appointed City Manager, who has been the Citys Commissioner of Finance for many years, took measures to void such behaviour. How could these expenses have been processed, if city policy was not followed? Could it be that the City has lax controls? The public would be interested to know whether other Councillors at the City have an office furnished by Brampton Galleries, as well as a survey of other municipalities to compare their standard. However, you may want to call a downtown law firm, I think this would be the type of look a lawyer would be inclined to, especially the barrister book case. More so this is not the type of furniture consistent with office furniture. It is more consistent with home furniture for display purposes and not for an office environment.

Desk Hooker Examples File Credenza
With the economy the way it is, it is surprising that Regional Councillor Frustaglio would have the need for a TV, let alone that size to be purchased most recently in December, 2008.
TV Purchase Comparison *charged to 010015.7210 Councillor Councillor Meffe Councillor Ferri Councillor Frustaglio Date March 31, 2008 May 30, 2008 December 16, 2008 Description TV TV 32 Aquos LCD ($899) Plus Sharp Wall Mount ($185) Seller KN Solutions Ltd. Unknown KN Solutions Ltd. Price 687.96 403.51 1,224.92
Should you have a matter to discuss and decide to visit Councillor Frustaglios office anytime soon, it would be worth your while to check out this latest LCD TV. I guess Ms. Frustaglio is not too worried about how she is going to be coming up with the health levy for a new hospital, or the recently approved 2.8% increase on taxes. There is no excuse for these purchases as clearly these would be defined under a breach of public trust, in managing the publics money. This is not in the best interest of taxpayers. Nor is it in the interest of Vaughan taxpayers for Councillor Frustaglio to be buying extravagant furniture from retail stores outside of the City of Vaughan. As a city, should we not be supporting our local businesses first before we spend Vaughan tax dollars outside of Vaughan? As a level of government I believe we should have a policy of Buy Vaughan First.
TV Price Range Comparisons Modest

Reasonable

Outlandish
The Sharp LC-26DV22U 26" TV, featuring a built-in DVD player, is perfect for a bedroom or college dorm, thanks to its space-saving, elegant design. This all-in-one Sharp TV DVD Player produces stunning picture quality, with deep colors and great contrast. The LC-26DV22U Sharp TV has all the advanced technology of larger models packed into a 26" screen, like a 3-wavelength backlight and 6ms response time, for vivid, life-like imagery, even in the fastest moving action scenes. It also features built-in digital tuners and 2, 5-watt, fixed bottom speakers for powerful audio.
Sharp Aquos LC-30HV4U 30-Inch LCD Flat-Panel HDReady TV
32 Aquos LCD:The D64U Series uses Sharp's proprietary Advanced Super View/Black TFT Panel with multipixel technology, giving 10,000:1 Dynamic Contrast Ratio with Enhanced Picture Contrast Technology and 4ms response time. 25% thinner and almost 20% lighter, the new Slim-line design allows the new AQUOS D64 to be placed virtually anywhere.
Council Budget/Expenditure Policy ( 0 1.14), subsection: 4
2.8 Members of Council offices will be redecorated at the commencement of each term of office, upon request, to a maximum of $3,500. Following the November 2006 election, Regional Councillor Joyce Frustaglio, whose office location is identified as RC1 in the invoices, wanted her office enlarged. One reason for this may be to accommodate the non-City standard furniture she purchased for her office. It should be noted that the Citys FOI department would not confirm that the references to the office location in the contractor invoices noted as RC1, RC2, LC1 belonged to Regional Councillor 1, Regional Councillor 2, Local Councillor 1 and so on, stating that such references relate to the security of the building and would be exempted under the MFIPPA. Despite the civic building being a public building and members of the public being allowed to meet elected officials in their offices we find it absurd and extremely far reaching that any person or persons seeking to threaten the health and safety of the Citys elected officials and their staff would devise a plan around the references noted in the Contractors entries when they could speak to any number of people, including the contractor and their workers, furniture delivery personal, such as those from Brampton Galleries, and other vendors and employees, who attend the office area! Clearly these were used for contractor invoicing purposes and, if anything, to void any FOI requestor from obtaining the corresponding elected officials name through FOI. To accommodate Regional Councillor Joyce Frustaglios request, renovations would also have to take place to the adjacent areas, i.e. Regional Councillor Mario Ferri, whose office location is identified as RC2 in the invoices and Regional Councillors Area. In December of 2006, the City of Vaughan council had just approved $107 million city hall to replace the current city hall where councillors currently occupy office space. Given that the new city hall will be completed shortly, were major renovations such as the moving of walls and other renovations, described below really necessary? We believe that Councillor Frustaglios unnecessary office enlargement cost the taxpayers of Vaughan approximately $17,000.00, which will be discarded as soon as the new city hall is completed in 2010. Please see the table below.

Regional Councillor Joyce Frustaglio Office Enlargement Renovation
Regional Councillor Joyce Frustaglio Joyce Frustaglio Joyce Frustaglio Office Location RC 1 RC 1 Regional Councillors Area Invoice Date Dec. 20, 2006 Dec. 19, 2006 April 25, 2007 Contractor Anacond Anacond Anacond Invoice # 5227 Amount $8,533.00 $2,776.14 $4,900.00 + GST = $5,145.00 $742.00 Description Move wall and associated work. Carpet removal and replace. New drywall, floor repairs, ceiling repairs & painting. This final renovation work was done in conjunction with the photocopy room and reception area and hallway area. Repairs to carpet and tiles due to Joyce Frustaglio (RC1) who had the wall between Mario Ferri and Joyce Frustaglio moved because Joyce Frustaglio wanted her office size increased

Mario Ferri

Dec. 20, 2006

Anacond

$17,196.14
In order to reduce the annual expenses so that the expenses appear in two different years, Councillor Frustaglio submitted $5,754 in a period of one month, i.e. December 29, 2006 to January 30, 2007. Even more concerning is the fact that through this Freedom of Information Request, we found out that another budget account, Council 5
Corporate 020020, was being used for her furniture purchases. It appears this account is also being used by the various Councillors, thus disguising their true spending. What is the true purpose of the Council Corporate 020020 account? The public deserves to know more about this other Budget Account, found under the City Clerks section, Council Corporate 020020 and when it should be used and how its being monitored. Furthermore, the public deserves to know the following which would be identified through a comprehensive external audit: This Corporate Council Budget, is being used consistently by all Mayor and Members of Council yearly? What types of charges are charged thereon? Does that mean that furniture for all other Mayor and Members of Council is charged to this account? Shouldnt these expenses have gone through the Purchasing Department to be approved according to City Policy by receiving at least a couple of other quotes through the Citys Vendors List, which is the usual and proper practice, rather than Regional Councillor acting on her own as if she was buying furniture for her own home? Why didnt the Purchasing Department asked to be involved by pricing furniture available through their typical furniture suppliers? (For example, Armstrong Office Interiors and Summerlee Office Solutions?) Who are these vendors, for example, KN Solutions Inc., Art of Persia, Brampton Galleries, Decorest, and Bombay Company? Are these typically used City approved vendors of record for the City of Vaughan (For example, did the Mayor and Members of Council or Senior Staff use these companies too?) Have these items been added to the Citys capital asset inventory list as per Public Sector Accounting Board (PSAB)? If Ms. Frustaglio should not be successful in the next election, do these get assigned to another Councillor or will they publicly be available for sale? Why did the City reimburse Regional Councillor Frustaglio for the upgraded furniture she purchased at Brampton Galleries on her own credit card, was she not advised to purchase items directly from the City? What benefit would this have been to her by expensing it through her credit card? Did she earn points or cash back from her credit card? Will the City be furnishing the new City Hall with Brampton Gallery furniture? What happens to Ms. Frustaglios furniture when everyones office is being re-decorated a certain way for the new City Hall? Does Ms. Frustaglio currently have in her office every piece of furniture she purchased between 2004-2006 or have some of the recently purchased pieces replaced those purchased in 2004? If so, why? An audit should be initiated to review whether the appropriate benefits are being disclosed. Additional FOI requests are yet to be processed and in some cases the cost that the city is charging for some of the information is outrageous. However, we will continue to work through the tedious process of obtaining, paying or appealing the information in question, no matter how long it takes and without fear. The time has come to put an end to the abuse and implement and enforce a consistent policy that applies to all City staff. We are requesting that a formal and thorough expenditure audit of all Senior Staff and Members of Council (including the Strategic Planning Manager) of the last three years (2006 to 2008 inclusive). This should include an audit of the stated taxable benefits and at a minimum the following expenditure accounts: 407ETR Toll Charges Meals & Meal Allowances Training & Development Seminars &Workshops Corporate Mgnt. Mtgs. Office Equip. & Furniture Professional Fees Sundry Expenses Mtce. & Repairs - Vehicles Rental Leases - Vehicles Gas/Diesel - Vehicles Corporate Promotions Newsletters & Mailings Advertising Printing

There is no possible way that the expenses submitted and the current expense reimbursement protocol of the past be ignored. There is much to learn and in some cases, disciplinary action should be taken. Ignorance of approved policies is not acceptable and cannot continue to be tolerated. To conduct the audit, the auditor will require the expense files and back-up of the above individuals. It is at this time that we suggest the expenses should be copied and made available to the public upon making a FOI request. FOI requestors should not be delayed (other than photocopying). Why wait to post expenses when information is readily available? In conclusion, your lack of response continues to belittle the issue of expenses brought before you on several occasions which has many more now concerned. I would like to meet with you to understand why policies are so poorly enforced if, at all, and to review all taxable benefits to identify whether they are being properly reported and accounted for. I look forward to your immediate attention to this matter. Sincerely,

Richard Lorello

Richard T. Lorello C/O A City of Vaughan Citizens Group CVCG Attachment (Various Furniture Invoices processed for Ms. Frustaglio obtained through FOI) (Renovation Expenses obtained through FOI) Cc: Members of Council Suzanne Craig, City of Vaughan Integrity Commissioner Michael Tupchong, Auditor for the City of Vaughan Minister of Municipal Affairs, Attention: The Honourable Jim Watson Opposition to Minister of Municipal Affairs, Attention: John OToole, MPP Ernst and Young Attention: Michael Vear KPMG Attention: L. Burns, Partner Canada Revenue Agency (Delivered)