Vancouver's former CFO got $450,000 severance

GARY MASON Globe and Mail: March 21, 2009

VANCOUVER -- When the city of Vancouver's former chief financial officer, Estelle Lo, voluntarily resigned her position last year, she received roughly $450,000 in compensation after leaving, The Globe and Mail has learned. The fact that someone who allegedly walked away from her job was given such a rich severance package is certainly perplexing. But perhaps more stunning is that around $230,000 of the amount was for accumulated time owed, according to a well-placed source. Ms. Lo resigned last November after several run-ins with then-city manager Judy Rogers over financing around the Olympic athletes village project. Ms. Lo had major concerns about the city's involvement in the deal that were eventually borne out. Ms. Rogers was replaced a month later by a new administration at city hall. Officials at city hall won't talk about Ms. Lo's deal, citing confidentiality provisions. But the money she was paid for accumulated time owed is a lavish perk available to all managers - even those earning nearly $217,000 a year, as Ms. Lo was.

This isn't likely to sit well with Vancouver citizens who woke up to the news yesterday that they are facing an almost 8-per-cent increase in their property taxes this year. Not to mention the fact that many have either lost their jobs in the past few months or risk losing them in the near future. The public is not in the mood right now for stories about extravagant benefits being handed out to highly paid civil servants making more than 95 per cent of the population. The city's unionized employees have access to the same time-off provisions as management. What are they? Let's start with vacation. Employees at the city of Vancouver, unionized and management, are entitled to 30 days of vacation after 24 years. (Ms. Lo, who had worked at city hall for 10 years, was entitled to 20 days off). That isn't out of line with the private sector, but if you work at city hall you can carry over vacation time from one year to the next and cash out any unused portion when you want to. (City employees also get five days of supplementary vacation in the 11th year and every five years after).These days, most businesses in Canada insist workers use up their vacation by year's end or lose it - with no option to cash out unused time. Staff at the city of Vancouver also get 11 paid statutory holidays a year.

Then there are "gratuity days." All city hall staff, including managers with free cars, get a credit of three working days off per year for each year of service up to a maximum of 120 days off. Just for showing up to work. They can cash these in, too, if they wish. There are also "earned days off." For working an additional half hour a day (which would make for a 40-hour work week), an employee can get an additional 18 days off a year. Add it up and managers who have been at city hall 10 years can take months off a year if they want to. Or they can tack on thousands of dollars more to their year-end paycheques by cashing unused time owed. (All staff can accumulate sick-leave credits too. Workers are allowed 10 sick days a year at full pay. They can accumulate sick-day credits up to 261 days).

Given all the time that a manager at city hall can accumulate, it's easy to see how Estelle Lo walked off with almost a year's worth of pay in time owed over 10 years. It's not her fault. She was just cashing in what she was entitled to. The question is this: Isn't this type of compensation excessive, especially as we enter a period of restraint in which many companies are asking their employees to take pay cuts in order to save jobs? I doubt there is a city hall or government agency in the country that offers its employees the kinds of benefits Vancouver does. The government of British Columbia doesn't even come close. Its vacation package is slightly better in terms of the number of weeks off civil servants get for years of service - they qualify for seven weeks after 25 years of work, compared to six weeks at the city of Vancouver - but they can't carry vacation time over or be paid out for unused portions. Provincial civil servants get none of the other benefits afforded city managers and other employees.

"There's a real problem at city hall," said one person who used to work in a senior position there. "The managers who negotiate with the unions are in an inherent conflict of interest because they know any benefits the unions get are benefits they're going to get too. "When you can cash time owed it's a more palatable way of giving employees and managers a bigger pay increase than the one the public has been told they're getting. It's like a secret wage increase every year. The situation is basically out of control."