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Boondoggles Begin at the Council Table

Author: Walter Robinson 2001/03/06
Another week, another crisis. This week's episode: Severance payouts perturb politicos. Forgive me for making light of this issue, but one can sense a disturbing pattern developing. Since city council took office in January, we've lurched from one weekly crisis to the next.

From the transition spat to infrastructure woes to severance insanity, a siege mentality has gripped city hall.

From a political management point of view, it makes sense. By constantly fighting off external shocks and attacks, council stays united behind the mayor and no one dare questions the "groupthink" approach that now characterizes council. Groupthink, as organizational theorists will tell you, happens when a group exhibits the same line of thought or mode of reasoning.

While some say this signals council unity, a cynic (although I prefer to be called a sarcastic realist) would rightfully assert that it is really a case where one person is doing the thinking (or messaging) while the rest blindly follow. Sounds like your city council in action doesn't it?

Look at the current outrage over the revelations of big-ticket severance packages paid out to former top regional and city bureaucrats. Almost to a tee, councillors expressed their outrage at these "obscene" packages. Indeed, Alex Munter went so far as to personalize this issue as the "Bennett boondoggle."

To be fair, paying out $400,000 or $600,000 to former top bureaucrats is a tough pill to swallow. But some, if not most of the blame, is misplaced. Mr. Claude Bennett and his transition crew were legally bound to honour contracts negotiated between top bureaucrats and their former cities. Moreover, in most merger scenarios, many top brass choose to leave as opposed to playing second or third fiddle roles for an extended period in the new corporate entity. As well, new faces (without political baggage) are sometimes necessary to manage the new entity.

While allocating blame generates headlines, it does nothing to correct things for the future. Instead, the management issues and questions that have arisen should be addressed.

To start, the payout packages consisted of four types of payments: Pure severance, banked vacation time, banked sick leave and other costs.

The transition board received top-notch legal advice with respect to the severance to be paid out. In the cases of constructive dismissal (where people lose their jobs through no fault of their own), one month per year of service to a maximum of 18 months is the going rate for senior people. Paying anything less is recipe for lawsuits ad nauseam and the end result is that aggrieved employees end up getting 18 months anyway.

As for banked vacation time, municipal compensation is out of whack with real world norms. For most of us, vacation time is an issue of "use it or lose it." At best, your employer may permit you to carry forward a week of unused time from one year to the next. And in many cases, private sector employers also have upper limits on the amount that employees can cash out upon dismissal or retirement. Instead of whining, city councillors should ensure that such guidelines exist in the new city.

Turning to sick leave, again, the perversion of municipal compensation is evident. Banking unused sick leave is unheard of in the real world. Thankfully, the provincial government's enabling legislation that gave birth to the amalgamation process ended some of this lunacy.

Employees who moved from former municipalities to the new city were deemed to be transferred as opposed to being terminated and rehired. So if they had banked sick leave, it didn't have to be paid out. But this raises another question, how much banked sick leave is still on the new city's books that will have eventually have to be paid out?

As for the other costs, this is where some of the people sitting around the council table now should be ashamed. Some former CAOs and top managers negotiated open-ended contracts or negotiated paid education leave not to mention networking membership fees (read chamber of commerce, social or golf course membership dues) into their pay packages. These perks have boosted the severance payout tab.

And when were some of these exorbitant packages finalized? My brown envelopes tell me some of these packages were probably topped up in the last year to 18 months. And why not? With amalgamation looming on the horizon, top brass saw the writing on the wall and did their best to ensure their personal financial security. Wouldn't you?

But if they could see the writing on the wall, why couldn't our former city councillors (read some current councillors) see it as well before they ultimately signed off on these packages?

Do you think anyone will ask some of these questions around the council table? The odds are slim indeed for it would require some independent thinking if not admissions of past failure.

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Franco Terrazzano
Federal Director at
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