There's Gold in Them There Government Palaces

“Eye on City Hall”
A column of Information, Analysis, Comment, and Unfiltered Opinion
Reprinted from Oshawa Central Newspaper
Bill Longworth, City Hall Columnist
April 11, 2011

The Sunshine List of high roller public servants has just been published and no doubt has all private sector workers yearning for public sector employment.

The list confirms that there are now two classes of workers---those that work in the public sector and those that work in the private sector.

According to a Canadian Federation of Independent Business Report, Federal public sector employees enjoy a 15.1% wage premium over their private sector counterparts. Similar premiums over the private sector are earned by Provincial and Municipal government workers.

But wages are just part of the story according to the CFIB Report. Public sector non-wage benefits such as pensions, paid vacation time, paid health and insurance benefits, etc. remain, on average, 60 per cent higher than those of equivalent private sector employees boosting the Federal employee wage/benefits premium to 23.3% over their private sector counterparts when non-wage benefits are included.

And dramatic Public sector employment growth, up 24% since 1998, combined with the salary premiums paid public sector employees, has fuelled dramatic increases in the costs of government, all banking on that seemingly bottomless pit of taxpayer cash that redirects our disposable income away from the productive segments of the economy that would contribute to growth of every citizen’s standard of living and to the country’s productivity and wealth.

Since 1998, total wages and salaries paid to general federal government employees are up 28% compared to inflation and private sector wage growth over that period.

And then there is the question of job security. While private sector wages are frozen, workers laid off and plants shuttered, and workers fall prey to the vagaries of the sputtering economy, public sector workers soldier on with iron rice bowl job security with their guaranteed salary and benefits increases that bear no resemblance to the uncertainties in the real world

When we consider the wage and benefits premiums enjoyed by public sector workers, the Ontario’s Sunshine List, the list of public sector workers making over $100,000 annually, rubs salt in the wounds of taxpayers footing the bill.

The current Sunshine List for the City of Oshawa, lists 81 workers making in excess of $100G’s, 6 in excess of $150G’s, and one, the City Manager, at $259,110.75 including his taxable benefits. There were only 71 workers making in excess of $100G’s the previous year for a high income growth factor of 14% over the previous year, an unsustainable growth of city hall high income earners that city taxpayers just cannot afford.

Computing from a city report of February 2009, there were approximately 1194 total city employees at that time stationed in the various work sites with about 550 of these at city hall. Assuming most of the highly paid workers work out of city hall, almost 15% of city hall workers would be in the $100,000+ salary levels. This is a proportion of top earners not to be found in any corporate head office in the country.

In comparing salary growths for 2009 to 2010, the City Manager went from $251,526 to $259,110, a $8435 (3.3%) increase, Commissioners went from $168,192 to $181,978, a $13785 (8.2%) increase, the Auditor General went from $163,589 to $169,842, a $6253 (3.8%) increase, the City Solicitor went from $140,883 to $152,415, a $11,532 (8.2%) increase, and the City Clerk/Sr. Director Level went from $127,822 to $136,408, a $8553 (6.7%) increase....and all this without any market-place bottom-line performance criteria.

These one year pay increases are clearly unconscionable during yearly inflationary times of 1.3% (2009) and 2.4% (2010) but do indicate how “outrageous greedy civil servants can be. While you’re hoping to keep your job, they are grabbing pay increases of these mind-blowing magnitudes.

Actual wage 2010 increases by city senior bureaucrats quoted above ranged from 3.3% to 3.8% to 6.7% to 8.2% to accompany the 2010 inflation rate of 2.3%. Even the last term of council increased city taxes by 13% while inflation hovered about 3% over the term. Government costs are increasing far faster than citizen’s pay increases.

As an example of escalating salaries, if we compound the city manager’s salary into the future at the 3.3% increase he had last year, his 2010 $259,110 salary would compound exponentially to $267,660 in 2011, to $276,493 in 2012, to $285,617 in 2013, to $295.043 in 2014 at the end of this council term, to $304779 in 2015, to $314,837 in 2016, to $325,226 in 2017, to $335,959 in 2018, to $347,045 in 2019, to $358,498 in 2020, to $370,328 in 2021, to $382,549 in 2022 a mere 10 years into the future. These kinds of increases will bankrupt our citizens! Just how much can we afford? City officials need some restraint...and some common sense!

All this while Provincial Finance Minister Dwight Duncan has recently announced Ontario Welfare rates for a single person will rise 1% ($5.92) from $592 to $597.92 monthly, while a single mother raising a child will get an additional $10.14 monthly.

Shame! The single welfare mother with a child will get a measly extra $121.68 a year while some city employees will get a yearly salary increase of $13785.

Reminds me of my youth when my welfare family of 5 lived in one room in downtown Toronto.

The growing disparity between the rich and poor is highlighted by the obscene raises taken by senior city bureaucrats and this disparity is raising alarms by widely divergent voices from Chinese President Hu Jintao to British Prime Minister David Cameron to IMF Managing Director Dominique Strauss-Kahn.

In 2007, Canada's highest paid 100 CEOs pocketed the average Canadian's annual pay of $40237 by 9:04 a.m. on January 2, the first day of work in the new year.

Income inequality has emerged as a major social and economic issue in Canada and elsewhere, writes Canadian author and political commentator Frances Russell. No longer is it the sole concern of the left. A working paper by the International Monetary Fund states that if income inequality remains unaddressed, the revolutions taking place in the Middle East could possibly spread elsewhere.

It’s now time for those city politicians who got elected based on tax restraint to start pegging staff salary increases to performance and to some semblance of reality reflected in the private sector.

Thoughts from the Federal Campaign Trail

Got a Colin Carrie election flyer Wednesday inscribed with the apparent personally handwritten message, “Sorry to have missed you---Colin.” Only perplexing thing about this was it was delivered with my regular mail by the postman. Leaves me wondering whether the postman is campaigning on behalf of Carrie on his rounds----or is this a cunning and dishonest deception by the Carrie Campaign?

We do know Harper’s main message in seeking a majority government is to decry the potential for an “unstable” and “dangerous” coalition government, the same coalition he worked to form to unseat the Martin Government in 2004.

Harper fails to mention that it was a Lester Pearson Minority Government that brought us the Canada Pension Act, the National Health Act, the Auto Pact, and the National Flag---proof in the pudding that minorities have been good for Canada.

Did you unknowingly donate to some Municipal Election Campaigns?

The municipal candidate’s campaign financial forms are now on the city website. They disclose that Colin Carrie donated $750 to Mayor John Henry’s campaign and $200 to each of Roger Bouma, Bruce Wood, John Neal, and Tito Dante Marimpietri.

The real question is whether Carrie unethically and dishonestly used his parliamentary expense accounts, and thus your tax dollars, to donate to these campaigns.

This is only a part of his undue influence however. There are so far only two Carrie signs in my neighbourhood both arriving in the first days of the election. During the municipal election, one had a Henry sign and one had a Bruce Wood sign, that neighbourhood resident probably turning down Henry’s sign as he is a close neighbour of mine.

The indications grow stronger with the Federal Election that Carrie used his campaign team, his sign locations, his telephone bank, and probably his parliamentary expense allowance to promote conservative candidates at city hall, an undue influence usually avoided like the plague by most senior government politicians...but perhaps part of Stephen Harper’s agenda to gain control of politics across the country right down to the municipal election.

Be sure to follow Bill’s radio broadcasts, “Eye on City Hall”,
every Monday, 6-9 pm EST, on http://www.ocentral.com/thewave/

Greed trumps Trust--- Even in the Public Service!

“Eye on City Hall”
A column of Information, Analysis, Comment, and Unfiltered Opinion
Reprinted from Oshawa Central Newspaper
Bill Longworth, City Hall Columnist
March 7, 2011

You can hardly pick up a newspaper these days without reading about more waste and abuse of public monies by public officials.

As I write this column, the Toronto Star headline screams about spending abuses on Toronto Police paid duty assignments whose officers are paid $65 an hour for unnecessary assignments around construction sites where the work could be done equally well by a few barricades....but such is the strength of public unions that negotiate the laws and hourly rates necessitating this public waste.

In 2009, Toronto taxpayers paid $7.8M on uneccesary police duty assignments, notwithstanding the extra wastage spent by the Provincial Government ($3.5M), City of Toronto entities (Toronto Water, Toronto Hydro, TTC---$2.6M) Construction Companies ($5.5M), Utility Companies ($5.2M)---most for work that could be performed by a few $5 barricades and reflective plastic traffic cones.

These paid duty assignments as well as paid court appearances, which probably act as an incentive for many officers to be quite aggressive in laying traffic charges, account for the incidence of many police officers earning well over $125,000 on Ontario’s Public Salary Disclosure List.

In Toronto, irresponsible, if not criminal, spending problems have surfaced within the Toronto Community Housing Corporation.

A week or so ago, Toronto’s Auditor General disclosed extensive wastage of public funds by staff officials of the Toronto Community Housing Corporation who expensed $40,000 of public money for a Christmas Staff dinner while many residents of Toronto public housing undoubtedly went without a Christmas dinner, $1000 for Holt Renfrew Chocolates, and $800 for staff massages at a summer picnic. Beyond these transgressions, TCHC staff disregarded corporate procurement policies and purchased big ticket items with sole sourced contracts, less than arms length deals, and spent $25M on an unsolicited proposal.

TCHC was governed by a Board of Appointed Citizens plus some politicians and resident appointees. But this civilian oversight was insufficient to properly supervise the spending approved by employed officials of the Corporation.

The Civilian Appointees to the TCHC, like politicians elected to oversee public organizations, simply do not have the skill, expertise, or intimate knowledge of the workings of the large organizations and, like stealing candy from a baby, hired bureaucrats can easily hide inappropriate and wasteful spending from prying eyes.

As I’ve said repeatedly in my columns, and in my campaign for mayor, the only way to insure growing productivity and efficiencies in public expenditures is to squeeze these out of the system with reduced annual capital allocations to force spending cuts, combined with a directive that there be no service cuts.

In addition, It would be helpful if all public senior managers were hired on renewable term contracts to insure their easy dismissal if they were unable to produce these growing efficiencies with decreasing tax allocations.

After all, this is the strategy the City of Oshawa implemented to control the investigations of its highly paid Auditor General who will have his 5 year term with its handsome salary renewed only as long as his reports remain supportive of city operations, politicians, and senior bureaucrats. He doesn’t have the independence of the Toronto Auditor General or those holding the position at the Provincial and Federal Levels. He’s literally a sheep in a wolf’s costume!

Jobs for Life guarantees, like those in Toronto for city CUPE employees, muzzles politician's abilities to work for increased productivity and increased cost efficiencies through contracting out. This is unusual job security foreign to the private sector. This iron rice bowl type of employment has even been abandoned in China where it led to an unproductive, unmotivated, and inefficient workforce that hindered China’s international industrial competitiveness.

Even here in Oshawa, city employee’s job security, salaries, and benefits are the envy of Oshawa’s work force.

Of course, appointed community representatives are often just as good as politicians and bureaucrats in hiding self-serving expenditures from prying eyes.

I was once invited to a fancy restaurant dinner by a federally appointed member of the Oshawa Harbour Commission who blatantly advised me, and the manager of a well-known local media organization eating with us, to order from the right hand column on the menu---the price column. It seems that blowing public money is contagious to all positions of public trust. Burning up OHC cash seemed a greater priority than what we ate.

Even highly respected politicians like long serving Mississauga Mayor Hazel McCallion is under an investigative cloud for donating only minimal proceeds from her charity fund raising events to advertised recipients, and of course, her potential conflict of interest charges for unduly influencing her son’s hotel development project in her city. It seems, no matter your moral compass at the beginning, increased tenure in the job moves you closer to the ethical edge.

I have commented often on all of the fat and waste in governments of all levels and of all stripes in these columns and have stated unequivocally that, while politicians contribute their fair share to this waste of taxpayer’s resources, they do not have the skills or the detailed knowledge of the government operations they oversee on our behalf to eliminate fraud, irresponsibility, deception, cheating, lying and unlawful or unethical conduct that occurs on their watch.

And the trust we have in politicians to come clean with the facts is often compromised by their proclivity for putting unjustly favourable or incomplete spins on the facts.

According to a report on Preventing Fraud and unethical behaviour in Government presented by Deloitte and Touché Canada, one of the largest and most prestigious audit, consulting, financial advisory, risk management, and tax service accounting firms in the country, a typical organization loses 6% of its revenue to occupational fraud, and 10.5% of these cases are government related with average losses of $45,000 with one in six occurrences resulting in losses exceeding $1M.

Frighteningly, governments failed to prosecute in 26.1% of these cases out of fear of bad publicity.

The report also indicates a direct relationship between employment tenure which is presumably correlated with increased responsibility and size of fraudulent loss, and presumably politicians move closer to that ethical line with increased public service....providing context to the Hazel McCallion case quoted earlier.

Internal fraud according to the Deloitte report is perpetrated by false financial reporting, kickbacks and bribes, phantom vendors, submission of fraudulent expense accounts, and payroll fraud...and we frequently read of such crimes against the taxpayer through investigative journalism or criminal investigation...unfortunately though, not in Oshawa where we have no news watchdogs over city council, except for this columnist and a few interested and public minded citizens who expose some transgressions that do escape the top secret mindset of city council and administration.

A recent highly publicized example of fraudulent and criminal misuse of taxpayer monies was exposed in the Gomery Inquiry which investigated bid rigging, fraudulent sole-source advertising contracts, and kickbacks totalling in excess of $100M, some of which was filtered back to political party election preparedness coffers.

Ron Fraser, Oshawa’s Auditor General, works under a 5 year renewable contract which makes him a “yes” man for city bureaucrats and politicians. His terms of employment require that his investigations result from city council direction and his renewable term precludes him from raising any fuss normally associated with Federal or Provincial Auditors General or indeed the Toronto Auditor General, all whose contracts make them much more independent from the political and bureaucratic functions in which they work.

In terms of some investigative work to discover huge wastages and lost tax savings in the city, I’d suggested politicians direct the auditor general to look at:

1) Mileage and private automobile use allowances paid to high auto expensing city staff members and suggestions on how to save money in this area. Two Toronto employees were billing $20,000 per year, in addition to their salaries.

2) Cost of duplications of service between city and regional levels of government and cost savings that would result from eliminating Oshawa Municipal Government and Administration

3) Cost of individual consultant’s reports to city hall, how and why they were sourced, how their fees were set, and their relationship to any city hall bureaucrats or politicians.

4) Commission Time/Study, Productivity and work efficiency studies in the various city hall departments to improve cost effectiveness

5) Analysis of the city hall general vote plebiscite process and strategy to establish whether voters were sufficiently informed of the impact of the change.

6) Costs and effectiveness of city PR, advertising, and promotion activities

7) Investigation of City Expense Accounts, staff and politician’s use of city charge cards,

8) And the list goes on....

Without a daily press or any investigative reporting in Oshawa, and a press controlled in large part by city advertising revenues, it is hard to pin down this kind of excess and wastage of public monies in Oshawa, but you can bet your bottom dollar, it’s just as bad.

Unethical conduct and spending by both politicians and bureaucrats alike will continue to go unreported like the MBA scandal did until uncovered by interested citizens interested in digging to find the truth.

And city taxpayers will continue to be penalized with the highest taxes in the GTA as this wastage continues!

Political and bureaucratic greed will continue to trump trust in serving the public.

Be sure to follow Bill’s radio broadcasts, “Eye on City Hall”,
every Monday, 6-9 pm EST, on http://www.ocentral.com/thewave/

Talk about roping yourself to a sinking ship!

“Eye on City Hall”
A column of Information, Analysis, Comment, and unfiltered opinion
Bill Longworth, City Hall Reporter
April 5, 2010

Despite voter’s rage about the audacity of Mayor John Gray’s wasting taxpayer money on funding $23,000 MBA’s for his executive assistant, contract employee, James Anderson, and Councillor April Cullen, Councillor Brian Nicholson is still defending the Mayor’s outrageous and irresponsible action.

By doing so, Nicholson continues to expose the sense of entitlement he feels for himself and members of Oshawa City Council. He feels, as the Mayor does, that our tax monies can be spent any damn well way they please. Our tax monies can be used to service the needs and wishes of the politicians and not the city and its people.

In fact, despite the “Accountability and Transparency Bylaw” signed by all members of city council, Nicholson recently proposed a motion stating that such funding in future should be “hidden” in politician’s office budgets so that the tuition funding could continue but that the secrecy of the office budgets would hide such funding from the public. So much for his “respect” for the responsible and transparent use of our city taxes!

Last Tuesday, March 30, 2010, Nicholson published a 1600 word article on his Facebook Page justifying the MBA expenditures and supporting John Gray’s right to spend taxpayer money in this way. He also supported Councillor April Cullen’s and Executive Assistant, James Anderson’s, application for having taxpayers pay their MBA tuitions in the first place.

Nicholson writes his commentary for his “fans” on his facebook page and if someone disputes what he says, it is not long before the critic is cut off from Nicholson’s page so as to not undermine the inaccuracies that Nicholson spins on the page. I, for one, got cut off the page because I disputed Nicholson’s assertion that Oshawa was one of the lowest taxed places in the GTA despite the fact that we all know that we are absolutely the highest taxed place in the GTA and one of the highest taxed places in all of Canada. Nicholson regularly “snows” his readers in untruths, misinformation, and “spins” that disguise the real facts from his readers.

He seems to be tied at the hip to both John Gray and April Cullen as he has regularly attacked critics and opponents of John Gray and has continually stood up in support of April Cullen over the MBA issue as the only member of council to publicly do so. It seems as if all are members of a little three person fan club.

In his statement, Nicholson states, “This MBA controversy has been rife with irresponsible comments. Charges of illegality, conspiracy, corruption, intimidation, theft, and conflict of interest have been made with wild abandon.” Nicholson didn’t mention the most appropriate charge of “gross stupidity” and “irresponsibility” that is being made in press editorials right across the country!

“It is unacceptable,” Nicholson goes on, “when these charges are made by those who may not be aware of the workings of government, but when they are made by candidates for public office, by presidents of local ratepayers associations, and by members of Council, they are not only unacceptable but are deplorable and must be addressed.”

Once again, I guess, Nicholson thinks criticism is unwarranted by those getting centrally involved because, I assume, he feels that they should know “the workings of government,” and thus implies that every government uses, or should use, valuable tax dollars to serve politicians first.

If this is the case, perhaps Nicholson should be very critical of April Cullen and James Anderson for not enrolling in Harvard so that they could screw taxpayers out of close to $150,000 for tuitions. Even top ranked Queen’s and Western would set back the taxpayer close to $70,000 but neither April or James would get a high enough score on the GMAT for these “good” schools. Instead, they enrolled in “bottom feeding” Cape Breton University.

Maybe both Nicholson and Gray support publicly funded tuitions so that they could work on their BA’s at the public’s expense. Who knows? If we keep electing these guys, they may end up with a basic degree sometime.

In one Facebook posting, April Cullen claimed of “saving the taxpayer” about $6000 due to costs she picked up herself...like a summer in Cape Breton Island that she funded herself. She also justified taxpayers paying for her MBA because it cost each of us just pennies per week over her four year term. One amount she said she personally picked up, her summer program in Cape Breton, looks surprisingly like the $1808 she billed Durham Region for Travel. Doesn’t her sense of entitlement blaze through with her statement that she saved the city money on her MBA?

She makes no claim of personal benefit for her MBA, or thanks to the taxpayers, only asserting her many sacrifices and hours she put in on the degree….as if the sorry Oshawa taxpayer would give a damn about that. She does assert that she earned her $116,551 salary, though, because she had her long distanced taxpayer expensed blackberry with her. Thank you April!

In a recent meeting of the Finance and Administration Committee, Bruce Wood, President of the “Oshawa Ratepayer’s Association” made claims that: 1. The Mayor knowingly abused the city Corporate Training and Reimbursement Policy, 2. The Mayor circumvented the policy, and 3. Staff was intimidated into signing the applications due to political pressure and for fear of their jobs.

Nicholson bounced each of these suggestions off the City’s Auditor General who responded he came across no evidence to support any of Wood’s claims.

In his responses, the Auditor General was between a rock and a hard place….pleasing his political masters or giving his truthful opinion about the legitimacy of the MBA funding and process. No senior government employee of any government ever publicly contradicts or admonishes politicians no matter how “wrong-headed” they are. You can bet though that the more professional and dedicated staff were writhing in their beds at night and clenching their teeth at work during the day so as not to say what they really felt about the issue.

Oshawa’s Auditor General is paid about $160,000 annually and is on a renewable term contract. He was appointed by the politicians, acts on the politician’s directions, and his contract will not be renewed by the present bunch if he does not support the actions of the Mayor and Council at every turn. I have not once read a city Auditor General’s report that was at all critical of city operations, departments, staff, or the politicians. He keeps walking that “narrow track” at every turn to protect his future employment.

For a really effective Auditor General, he should be appointed on a ten year non-renewable term and be free to investigate any area of the city operations at his whim including calling sworn testimony and subpoenaing witnesses and making public reports through the press. This would give the office teeth similar to that enjoyed by Sheila Fraser, Canada’s Auditor General.

Right now, Oshawa’s Auditor General, as the job is defined, is a “pussycat” purring at the politician’s lap.

The Auditor General, though, did make one suggestion, that the policy should be tightened up so as to remove any ambiguities. This is simply a political statement that suggests that the policy gives room for the Mayor to make an interpretation of the rules.

I don’t know how much more defining the policy can be. There is a specific form for the purpose that quotes a maximum of $2000 per year or $5000 in any 5 year period. That’s clear to me! It also says that any application exceeding these amounts should also be approved by the city manager. That’s also clear to me! What’s the confusion?

In any case, no matter what the policy, common sense dictates that MBA’s should not be funded for politicians or political appointees. And it is good judgement we expect from our politicians in handling our affairs, isn’t it?

As a conclusion to his letter, Nicholson demanded a public apology from all critics of the MBA funding. I think that apology would be due from every single Oshawa resident except for Mayor John Gray, Councillors Brian Nicholson and April Cullen, and the Mayor’s executive assistant, James Anderson.

They are undoubtedly the only four in this city of 160,000 who agree with the funding, and the rest of us will undoubtedly express our disagreement with our votes come election day, Oct. 25, 2010.

Click here to read Brian Nicholson’s complete absurd statement supporting both the MBA funding and Mayor John Gray's "right" to make the decision to fund these tuitions out of your tax money.

Be sure to follow Bill’s radio broadcasts, “Eye on City Hall”,
every Monday, 6-9 pm EST, on http://www.ocentral.com/thewave/