Tuesday, August 26, 2008

Oh and, one other thing…

The Mayor perhaps realizing that maybe the current tempest over hiring procedures at city hall isn’t the usual gust of wind prior to an election, was back in print on Tuesday.

This time he returns to the printed page, with what appears to have originally been a “backgrounder” for the Daily News, a correspondence that he decided to allow to have published, perhaps to try and counter the questions raised by the original Letter to the Editor by Anna Ashley last week.

It expands on yesterday’s letter to the editor that Mayor Pond provided to the Daily News and provides more background from his side of the debate, on what has become a pretty controversial addition to the labour pool at City Hall.

The lengthy response recounts the events of note during the period under question, outlines a number of payments made to both of the two principles in this issue, Ms. Hesse and Mr. Howie. And it ends with a declaration that the taxpayers’ money should indeed be handled with both efficiency and integrity.

For comparison purposes, we’ll first reprint the original letter to the editor from Ms. Ashley, which appeared in the Daily News on August 21.

We follow that up with what is the Mayor’s answer, as it appeared in the Opinion and Letters section of the Tuesday August 26th edition of the Daily News.

Of particular interest to Rupertites in the Mayor's response, might be the revelation of the rather alarming turnover of permanent staff at City hall during all of this.

During the course of his explanation to Ms. Ashley, Mayor Pond advises that by July of 2007, the only permanent member on the staff list of the City of Prince Rupert with even a year on the job, was the recently hired Mr. Howie.

It would be interesting to learn just how such a dramatic exodus took place and more importantly, how the city found itself in such a state of affairs that so many experienced hands had moved on.

While he tries to answer some of Ms. Ashley’s questions with his response, the Mayor reveals more of the workings of city hall at the time and he now leaves us with a few more questions to wonder about, as we all wait to see how the current issue of debate evolves.

Looking for some answers from City Council
Letter to the Editor
The Daily News
Thursday, August 21, 2008
Page 4

To the Editor: I am writing this open letter to our Mayor and Council. On July 2, 2008 I wrote our City Council members regarding what appear to be unauthorized expenditures within the 2006 and 2007 Statements of Financial Information, the appropriateness of contracts with the City Manager’s spouse and as to the level of remuneration/compensation of the City Manager.

It has been well over a month and I have yet to have received any meaningful responses to my inquiry, despite the fact that this situation has been ongoing for much of the past two years.After having reviewed the 2006/2007 Statements of Financial Information , and the Council meeting minutes and agendas for the past 2 years, essentially there were several issues or concerns of note.

The first was with regard to contracts for services (presumably consulting, and not employment services) being awarded to the spouse of the city manager totalling close to, or in excess of, over $100,000 over the last two years.

Secondly, after having reviewed the minutes of the city council meetings, nowhere could I find these contracts being approved by, nor authorized by, council, as good financial management practices would require. This would mean that these particular contracts would be unauthorized or illegal expenditures. In addition, nowhere was there any record of these contracts being put out to tender, as should have been done.

The last concern of note was the large sum of money (almost $90,000 over the past two years) having been paid to the city manager, over and above his regular yearly salary of $140,000.

Having noticed these particular details in the city’s financial information statements a number of questions and concerns came to mind, which I put to council in the aforementioned letter.Basically these questions/concerns were as follows:
1. Why were these non-employment contracts, given to the spouse of the city manager, and not put out to tender, especially considering that the total amount paid out was close to, or over, $100,000?
2. Were there not city employees, already under salary, that could have fulfilled the services in some or all of these contracts, and what value or benefit did the taxpayers receive for these contracts?
3. Why is there no record of council having approved these contracts in the council meeting minutes over the past 2 years?
4. Why was a city employee, under salary, given an additional, $90,000 (approximate) for services?
5. What extra services did this city employee complete for this additional $90,000?
6. When did this city employee complete these additional services – if ever?
7. Were the services provided part of this employee’s regular job description, for which they were already being paid?
8. Why were these additional services not put out to tender, instead of being given to a current city employee?
9. Were these services ones that could have been done by other city employees already under salary with the city?
As of yet I have not received any answers to my questions, despite having been ‘assured’ through email, by 3 of the 7 council members, that the matter is being looked into and is being taken seriously.

In addition, between the time my letters were sent to council and today, the city website has been altered, and the agenda for the June 23, 2008 meeting of council, which contained the 2007 Statement of Financial Information, can no longer be found on the website, and is therefore no longer available for perusal by the public - disturbing to say the least, and an omission that should be rectified immediately by putting it back on the website.In summary, considering the fact that our taxes have been raised considerably over the past few years, and that our city is not in great financial shape, it is extremely disturbing to see questionable expenditures of this sort within the city’s financial statements.

Considering the fact that I have yet to hear anything to the contrary, I am left to conclude that my suspicions regarding the nature of these matters are correct.

The citizens of Prince Rupert deserve to know the truth about what is truly going on with our city’s finances, how our city is to be run, and if things are not on the up and up, as now appears to be the case, how those responsible will be held legally, morally and financially accountable.

Only then can our city government retain any semblance of integrity.
Anna Ashley

Letter to the Editor
Prince Rupert Daily News
Tuesday, August 26, 2008
Page four


(Editor’s note – this letter was received from Herb Pond at the same time last week as the shorter letter, that ran in Monday’s edition of the Daily News. It was originally attached for information purposes only, but Mayor Pond has agreed to let us run it in full.

This, of course, is Pond’s response to Anna Ashley’s letter that ran in last Thursday’s edition of the Daily News.)

Dear Anna,

Thanks for bringing your concerns directly to the source.

First let me begin with an apology for the delay in this response. The summer vacation schedule, including my own, has had its effect.

All responsibility for Ms. Hesse’s work for the City of Prince Rupert falls to me and my actions as CEO in protecting the City’s interests. Despite exhaustive searches in 2006, the City was having no success in attracting a qualified Corporate Administrator to fill the position vacated by Mr. Ireland.

Service to the public was suffering and the organization was falling behind on critical tasks. Meanwhile, Ms. Hesse, a highly qualified CAO was living right here in the community and much in demand as a contractor in communities throughout B. C.. The solution was obvious, so at my urging and with the full knowledge of Council the City retained the services of Ms. Hesse. Both she and Mr. Howie were reluctant, wishing to avoid any appearance of impropriety.

To protect their reputations, and to limit any sense of conflict either internal or external, I took the unusual step of having Ms. Hesse report directly to me. All payments to Ms. Hesse were approved by me and fell within budgeted allocations, and as you’ve already seen, were publicly noted in the City’s Annual Report. The budget was the authorizing document.

The arrangement was of great benefit to the City. We gained immediately competent assistance while avoiding living out expenses that any other experienced contractor would have required. Because she didn’t need to travel, Ms. Hesse reduced her regular charge out rate by over thirty percent, which indeed is below our normal cost for a permanent CAO with benefits.

Ms. Hesse moved from Acting CAO to training the permanent replacement, coaching other staff and working on some special projects that were beyond the capacity of our existing management team. Her work for the City was interrupted between March and August of 2007 when we freed her up to assist the Skeena Queen Charlotte Regional District to fill up an unexpected vacancy in a key position. Ms. Hesse ended her work with the City earlier this year.

It was never out intention that she stay on as long as she did, however retirements and staff moves drained the Administration Department’s experience so much that by July 07 the only permanent staff with even a year on the job was Mr. Howie.

Ms. Hesse’s previous experience and understanding of our operation uniquely positioned her as a trainer and a job coach. To this day I hear comments from members of staff who very much miss having her expertise readily available.

Mr. Howie and Ms. Hesse are consummate professionals with impeccable credentials; highly qualified and respected throughout the province. Ms. Hesse has a diploma in Public Administration, a Senior Certificate from the Board of Examiners, and is a past director of the Local Government Management Association. Mr. Howie has a long list of recognitions and distinctions, including past President of the LGMA and recipient of their award for professional conduct.

As for your questions regarding payments to Mr. Howie, I too found the reporting to be confusing, but regrettably statutory requirements for the Statement of Financial Information (SOFI) actually demand double counting of some expenses. For example, in the 2007 Schedule of Employee Remuneration there is a Travel/Training amount of $13,190, which includes the $8,801 also listed elsewhere in the Schedule of Supplier Payments under Travel/Training for Mr. Howie.

So let me tell you what was actually paid out, and why.

Mr. Howie began the duties of City Manager as a contractor, keeping the place running while we conducted an extensive executive search. He eventually won the competition and became a permanent employee part way into 2006 with a salary of approximately $120,000 per year. In addition the City pays him $18,000 in lieu of benefits (again a considerable saving for the City).

Depending on the year we may also pay him out for unused vacation and of course we cover the cost of his participating in professional associations and travelling on City business.

In 2006 actual payments to Mr. Howie totaled $164,202 with the following breakdown:

Initial contract employment (Dec 2005 to mar 2006) - $37,735

Salary after permanent hire (April to Dec 2006) – $90,600

Vacation Pay Out - $1,243

Payments in Lieu of Benefits - $13,500

Moving Expenses - $7,560

Travel/Training - $13,564

I’ve attached a sheet that outlines firstly the SOFI numbers and then the actual numbers. Hopefully this will help you to better understand what took place.

If you have further questions or need any clarification, please feel free to contact me directly. It really does matter that the taxpayers’ money be handled both with efficiency and with integrity.

Thank you again for taking the time to follow-up directly on your concerns.

Herb Pond

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