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Comment: Golden handshakes, parachutes and severances costly for capital region municipalities

STAN BARTLETT A commentary by the past chair of Grumpy Taxpayer$ of Greater ­Victoria, a citizen’s ­advocacy group for municipal taxpayers.
Capital region taxpayers have borne the brunt of several expensive “golden handshakes” in recent years, Stan Bartlett writes. JONATHAN HAYWARD, THE CANADIAN PRESS


A commentary by the past chair of Grumpy Taxpayer$ of Greater ­Victoria, a citizen’s ­advocacy group for municipal taxpayers.

Do councils know the role of the chief administrative officer is non-political, non-partisan, non-ideological and independent?

You wouldn’t know it by ­looking at the millions of ­dollars in financial settlements for ­dismissal without cause paid out by long-suffering taxpayers in recent years.

There are several thousand dedicated public servants in the capital region delivering quality services at the direction of councils. There are indications, though, that too many elected officials see the relationship in a different light, which results in major disruptions to governance.

CAOs provide expert professional advice to council and ensure the proper implementation of council decisions. They are the critical lynchpin between the political and the professional public services and largely determine whether the municipality runs smoothly.

When the relationship breaks down and there’s a costly ­severance, municipalities cite privacy laws and will usually not comment. But eventually the reasons for the differences with council and the amount eventually come out in the wash.

Councils want the “parting of ways” settled quickly without a messy lawsuit and so offer “golden” parachutes, handshakes and severances.

A “golden parachute” is an agreement between a local government and an employee ­specifying certain significant benefits if employment is ­terminated. These may include severance pay, cash bonuses, or other benefits such as legal fees.

Since taxpayers usually don’t have access to an ­employment contract, we don’t know if this less-than-endearing term applies.

We’ve learned the former CAO of Central Saanich, population 18,000, received a one-time payment of $317,000 after suddenly leaving in February 2020. The payout was revealed in the most recent statement of financial information.

A “golden handshake” is a clause in an executive employment contract offering a significant severance package in the event that executive loses their job through firing, restructuring or even scheduled retirement.

It’s similar to a golden parachute, but more generous because it not only provides monetary compensation and/or other benefits at the termination of employment, but also includes the same severance packages executives would get at retirement, according to Investopedia.

Taxpayers feel there might be severance packages in the past decade that might fit into this category.

Who could forget the Saanich CAO who left in 2014 causing an uproar when it was revealed he received $470,000 in severance?

Then in 2017, Victoria’s city manager, the highest ranking public servant at city hall, left a $274,977-a-year position after three years. In this instance the city revealed that he received a severance of 12 months’ salary and benefits.

By the way, within months of this CAO arriving in 2014, Victoria’s director of finance resigned, followed closely by the directors of parks, human resources and legislative services.

A “golden severance” is the pay and benefits that ­employees may be entitled to receive when they leave employment ­unwillingly.

In addition to remaining ­regular pay, it may include any additional payment based on months of service, unused vacation time, holiday pay, sick leave, retirement accounts and employment services. Severance contracts often stipulate that employees will not sue for wrongful dismissal.

We’ve taken the liberty of adding “golden” to the word ­severance because of the healthy nature of many common-law settlements.

Union-exempt management are subject to the minimum statutory severances by ­common law, while working stiffs get much less.

Typically, the severance pay for the rest of us is one to two weeks for every year of ­employment, but can be more depending on circumstances.

There’s nothing golden about that.

The turnover in CAOs — there have been seven since incorporation in 1999 — has not only been disruptive but costly for about 15,000 Sooke taxpayers. Seven, count them.

We’ve just learned the severance paid to the departing CAO in 2018 was about 11 months’ severance or $128,000.

Even though it involves taxpayer money, the district declined comment on any financial settlement, citing privacy laws. The mayor of the day said taxpayers would probably never know the amount.

The district ended up without a CAO for 18 months until the current CAO was hired with the help of an executive search firm.

It’s only one example in a long list of CAOs that have left well-paid capital region positions in recent years.

Not to belabour the point, during the past decade there have been at least five CAOs that have come and gone for one reason or the other in Colwood. Severances are unknown.

Why the constant turnover, a revolving door?

Is it because of personality conflicts or job performance or policy differences? Is there a mismatch of expectations between elected officials and senior staff and ­different approaches to community issues? Do overly generous contracts reward departure instead of long term service?

How many more eye-popping dismissals without cause can this community afford and how do taxpayers stop it?