The RCMP have launched an investigation into past financial practices at the Bunyan's Cove local service district, following the dissolution of the former committee and a complaint by the new committee's members.

Representatives from the new committee say they filed a complaint with the police in late September, the same day they got access to the local service district's bank account.

The financial situation means the community's dream of purchasing a new fire truck is now in doubt, and it will have to continue to rely on a vehicle that is nearly a half-century old.

"We had a public meeting when we found out the money was missing, and we had grown men and women here with tears in their eyes," said new local service committee chair Annie Perry.

In interviews with CBC News, some current and past representatives are raising questions about the community's financial situation.

Perry said she believes thousands of dollars is missing from the district's bank account, and she's seen cheques that she believes were written inappropriately before her term began.

Just over 450 people live in the community of Bunyan's Cove, according to data from the 2016 census. It's governed by a local service district, a type of local government that is more limited in size and scope than a municipality. (Garrett Barry/CBC)

Perry took her position with the new district committee on Sept. 16, after the Department of Municipal Affairs called for a public meeting and dissolved the former committee.

She said there is evidence of unexplained spending between 2017 and 2018.

"There's big amounts of money being written out," she said in an interview. "For a little community, where did all this money go?"

David Squibb, another new member of the local service district committee, and Ruby Nicholson, the committee's new treasurer, also spoke to CBC News.

Each said they believed money may have been inappropriately spent.

The new seven-member committee is split, with some other members condemning Perry's choice to speak publicly about the community's finances while a police investigation is underway.

Ruby Nicholson is the new treasurer of the Bunyan's Cove local service district committee. (Garrett Barry/CBC)

Meanwhile, a spokesperson for the Department of Municipal Affairs said it was aware of the complaint to police, which it described as "possible financial irregularities," and was planning a financial audit.

Fire truck money

The three new representatives told CBC News that thousands of dollars in funding that was earmarked for the purchase of a new fire truck for the Bunyan's Cove Fire Department appears to be gone from the community's bank account.

Correspondence between governments show that in 2018, the Department of Municipal Affairs sent $248,131 to the local service district under its fire protection vehicles infrastructure program.

The district and the fire department were expected to raise another $62,034, and borrow even more to cover the HST and GST portion of the purchase.

But the purchase of the fire truck was never completed — the truck remains in storage in Clarenville — and as of Sept. 20, the local service district had only $223,919 in its account.

David Squibb said he worked as treasurer on the Bunyan's Cove volunteer fire department. He's now a member of the local service district committee. (Garrett Barry/CBC)

"There's no money there that we're allowed to touch, because the $223,000 is not ours to spend," said Perry.

"And if we don't get this new fire truck that's sitting in Clarenville, that money got to go back to the government."

Nicholson said the local service district has collected another $10,000, as residents have been paying their yearly fees. But the committee has also been stuck with overdue bills that must be paid — and they are not quite sure if more are coming.

Perry said the local service district owes three months of bills to the garbage collector and the power company.

Cheques written to former member or her companies

CBC News obtained financial documents, including photocopies of cheques and partial bank statements for the Bunyan's Cove LSD account at CIBC.

The documentation includes photocopies of 12 cheques that were written to Stephanie Chatman, a former member of the local service district committee, and two businesses that are linked to her: Chatman's Convenience and Chatman's Welding.

Altogether, the cheques total a combined $96,598.

The cheques were written between April 2017 and July 2018, and each cheque shows two signatures. Eleven of the 12 cheques have no information on the memo field that would indicate what the payment was for.

The biggest payment, for $32,693, went to Chatman's Welding and was dated July 26, 2018.

Newfoundland and Labrador's Department of Municipal Affairs arranged for a public meeting in Bunyan's Cove on Sept. 16 to elect a new local service district committee. That decision effectively dissolved the former committee. (Garrett Barry/CBC)

On Aug. 31, Stephanie Chatman, trading as Chatman's Welding, wrote a $100,000 cheque to the local service district.

That cheque was deposited on Sept. 16 — the same day that the provincial government dissolved the former local service district committee.

Chatman was one of two remaining members on the committee that was being dissolved.

A full committee has seven members, but over the course of 2017 and 2018 committee members had resigned, and the committee was down to two this summer.

There were several attempts to hold public meetings to elect new members, but those meetings never attracted enough residents from the community.

Stephanie Chatman did not respond to several interview requests from CBC News.

2 signatures

Eleven of the 12 cheques written to Chatman or her companies show what appear to be the signatures of two former LSD members — Chelsea Keats and Wade Bowring.

When CBC News contacted Keats for comment, Clarenville lawyer James Hughes replied.

Hughes wrote that his client was anticipating a call from the RCMP's investigating officer to give a statement as a potential witness.

"The signatures on the cheques purporting to be Ms. Keats's were forged and during that time period when the cheques were written, Ms. Keats was not part of the committee," Hughes wrote.

Hughes wrote that he advised his client to only speak with police.

Meanwhile, Wade Bowring — whose signature also appears to be on 11 of those 12 cheques — declined to comment about financial practices during his term on the committee, or why his signature appeared to be on those cheques.

A local service district member said Bowring has told them that he did not sign inappropriate cheques.

Former member speaks out

Reginald Perry was one of only two members who remained active on the local service district before it was dissolved Sept. 16. The other was Stephanie Chatman.

Perry said his three years on the committee were "terrible" and he "didn't know anything that was going on."

Perry told CBC News that he spent the majority of his term fighting for access to financial documents, which he said Chatman held.

He alleged his consistent requests were ignored, and also said he wrote to the Department of Municipal Affairs to ask it to launch an investigation.

Other former committee members could not be reached by CBC News, or declined comment.

Current fire truck is from 1971

Ruby Nicholson, the committee's new treasurer, said there are discrepancies between receipts provided to homeowners paying their fees, and money that was deposited into the CIBC account.

"From the receipts that I had, there was like $53,000 and change for receipts that people paid for their fees, and the deposit book only shows $27,000 and change," she said.

The Bunyan's Cove local service district is responsible for providing water service, garbage collection and fire protection for the households in the community.

Squibb, who volunteered with the fire department before starting with the local service district committee last month, said there are now questions about how the community will pay for a new fire truck.

The Bunyan's Cove fire department is currently using a 1971 Ford 750. Squibb, who spent time in the fire department, said the community now needs to order parts from the United States to service the vehicle, as they cannot be found locally. (Garrett Barry/CBC)

The new truck would replace a 1971 Ford 750.

"Right now, the old fire truck that we've got there, it leaks water. So every so often, you've got to go fill the tank up, top the tank up," Squbb said.

"Two years ago, we had a breakdown with one of the brakes.… We had to order to the States to get parts, because nobody has it anymore."

The fire department raised its own money for the truck, which Squibb says remains in the department's own bank account.

But because other money appears to be missing, the truck remains parked in Clarenville.

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