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"Ever wonder if City Council is as contentious and chaotic as it is sometimes portrayed? Here you can get a progressive perspective on some of the issues from someone who spent four years in the trenches. Totally unbiased, though! Feel free to comment but keep it respectful, just like they do at council."

Saturday, August 25, 2012

Keeping up with the Joneses

“Everybody else is doing it! Why can’t I?” seems to be the whine of the Board of Directors of London Hydro in its quest to get a big pay increase.

Never mind that the council has just re-committed to a tax freeze, that the province is legislating a two year wage freeze for teachers, that City of London managers have had no increase for years, that unionized staff have been held to pay increases well below the cost of living, that the city is laying off workers to save money, that our mayor is begging the province to change its arbitration process because we can’t afford wage settlements for police and fire—when it comes to elected officials and their appointees, the sky’s the limit.

And who are these people who think they should be getting a 150% increase in their remuneration for attending a monthly meeting of the Hydro Board?
  • Vinay Sharma - Chief Executive Officer (as CEO he probably would not be affected by this).
  • Peter Johnson – Chair (Partner at Lerners LLP).
  • Mohan Mathur - Vice-Chair (Professor Emeritus U.W.O) and nuclear energy consultant.
  • Bernard Borschke – Century II Holdings Inc. audit committee chair.
  • Joe Fontana- Mayor of City of London, retired Liberal MP London North Centre.
  • Connie Graham- Retired Marketing and Sales Manager for South Winds Development and still married to the owner.
  • Marilyn Sinclair - Chief Executive Officer of TechAlliance.
  • Gabe Valente - Managing Partner, Valente & Theocharis LLP.
Fine, upstanding citizens all. My guess is that, for those who are not already retired with comfortable pensions and other income, their employers (should they have them) are not stingy about giving them one morning a month off to attend the meetings. And if they live in the municipality, as one would hope they do, transportation costs should not be too high.

So why are they asking the ratepayers and taxpayers of London for $12,000 per year, and then another $800 if they actually show up for the meeting? And at 12 meetings a year (six board and six committee), they can even miss a couple and still rake in a cool $20,000 a year. All except the chairperson who can get another $13,000 on top of that.

Not that they wanted to do this, mind you. As CEO Vinay Sharma points out in his letter to council, the poor board hasn’t had a raise since 2000. Until now, they’ve resisted any encouragement to ask for one. However, they are starting to look bad compared to other boards, that’s their concern, and so finally management convinced them to consider the possibility. But just so no one gets the wrong idea, they first hired an independent consultant to be paid for by the taxpayer, to make the case. Third party. Independent. It’s all good.

The consultant came through big time. After all, you don’t get consulting jobs like this by telling clients that maybe they’re not worth the money; that they got the job because they had connections; that there were plenty of applicants with more knowledge and experience than those who got appointed.

No, they get told that they’re hard done by because some jurisdictions pay more. Which jurisdictions we’re not told, but our directors are worse off than anybody. They’re not even up to the pay standard of the London Airport Authority!

Mind you, they’re better off than the London Library Board whose publicly-spirited directors get nothing. Same with the Convention Centre, the Health Unit, the London Economic Development Corporation, and Tourism London. They’re also better off than the board of the London Transit Commission at $4,295 per year and the Police Services Board which, although it pays $6,745 per year, pays nothing for attending meetings; it’s just assumed that members will show up. The chair doesn’t even get an extra thousand dollars. And, for the past two years, they have refused any increases.

The various conservation authorities do provide a per meeting stipend which essentially covers the cost of attending its out of town meetings.

The Western Fair Board provides no compensation although it is widely understood that there are some perks to be had, nice dinners and drinks with your friends, free admission to the fair, that kind of thing.

It’s not just that the directors are jealous of those who get more. They have an obligation to take a raise. After all, it’s right there in the Shareholder’s Declaration: “[C]ompensation for London Hydro's Board be maintained at a comparative level to those of Ontario peer utilities.” Previous boards may have been negligent in enforcing that part of the declaration, but this one knows its duty. After all, you, dear ratepayer, are the shareholder and the board wants to do right by you.

There’s one other thing. As things stand now, council has one representative on the Hydro Board, the mayor or his designate. Before I was elected in 2006, a previous council had passed a by-law that elected officials serving on boards and commissions in their official capacity could not accept remuneration for such service. As it was, the perks offered by the Western Fair Board had resulted in some blood on the council floor as members vied for being assigned to that post. One can only imagine what $20,000 would lead to.

As it is presented in the report from the consultant, only the per meeting portion of the stipend would apply, just under $10,000. Not bad, though, when added to the extra $30,000 the mayor is getting to engage the public and run his personal website. And surely, the other members of council, at least seven of them, won’t begrudge him that piddling amount. Not when he recently championed a huge increase in their expense accounts and when he personally lobbied for staff to bring back a council compensation recommendation that would link his salary to that of an MPP and councillors to receive 50-60% of that. It would mean a significant increase over the current $32,000 or so for councillors, even taking into account the tax free portion.

Just one little hitch, though. What about the votes of Denise Brown and Paul VanMeerbergen? They tend to be hard core. Brown would have some concerns about voting against a pay increase for her campaign manager whom she managed to get on the Hydro Board. And VanMeerbergen has difficulty saying yes to any spending that doesn’t involve roads.

This vote is one to watch.


doug rogers said...

Is that the same South Winds which clear cut the trees?m

Harriet Brown said...

If council said no, forget it, do you think they would all resign? Would anybody notice? Who else applied for these positions?

Anonymous said...

Harriet, I don't think you can apply for these positions. You have to be nominated and agree to be greedy. It's sort of like the senate.

zero percenter said...

Let's call it what it is: ruthless greed by people who don't need the money.


Anonymous said...

Me thinks that it seems that every board the Mayor is on they are pushing for raises. Mmmmmm?!!!!!Looks like he is trying to get every cent he can just in case he needs it!

Why's woman said...

Hello Gina,

I did some reading up, and sent the following to my councillor.

Sunday, August 26, 2012

Councillor Judy Bryant
Ward 13

Dear Councillor Bryant,

My attention was caught by an item on the agenda of the Strategic Policies and Priorities Committee meeting scheduled for Monday, Aug. 27/11:
- 5:00 p.m. Delegation - Vinay Sharman, CEO, London Hydro Inc. Board of Directors Compensation.

I did read through Mr. Sharma's attached letter and the Compensation Review prepared by consultant Marjorie Richards and Associates.

In my opinion, the consultant's report is flawed because it does not list 7 Hydro/Electricity providers used as comparison. The consultant implies that the 7 Local Distribution Companies (LDCs) are not named in the report because they required that this information be confidential. If LDCs are entities of their municipalities - or in some way accountable to taxpayers - aren't their expenditures public record and therefore should be able to be reported?

I have some questions:
1. Just what do the board members of London Hydro do?
2. What accounting of their time and work do the board members have to make, and to whom? ie is there a monthly report each sends in to a secretary, financial officer, or ....? Who goes to the meetings and who misses them? Are attendance records available?
3. Are meeting agendas and minutes published on-line, as are such for London Council and committees? On the London Hydro website I did find the latest annual report (2012) under the section About London Hydro, but I did not find meeting agenda or minutes [http://www.londonhydro.com/aboutlondonhydro/annualreports/]
4. Just how much time do London Hydro Board members have to spend on London Hydro business? I'd like to know the hourly work rate (both without a per-meeting fee and with the fee).

To be clear, I think it is entirely wrong for London Hydro Board members to be getting a raise.

At a time of a "0% budget increase" commitment by the Mayor and Council, it seems odd that this request is coming through. Also, I question the validity of the consultant report. Last, I think that without a discussion in public view of just what London Hydro board members are doing, it is wrong to consider wage increases.


Anonymous said...

Yes, Doug, same Southwinds.

No doubt these folks who have been trying to sell London Hydro will be much smarter and more deliberative in their decision making if they are paid more. Fat chance.

Anonymous said...

Speaking about Denise Brown you say: "Brown would have some concerns about voting against a pay increase for her campaign manager whom she managed to get on the Hydro Board."

Then Denise Brown should not be voting on this at all should she? Can she be prevented on voting on a motion that would benefit someone she has such close ties to?

Why's woman said...


Typing error in last note ... latest hydro annual report is 2011, not 2012.

Sorry for the error.

Sandy Levin said...

D. Brown does not have a conflict of interest under the legislation. It just looks bad.

Gord Drimmie said...

How absolutely typical to sleuth out a bunch of "comparable" organizations in order to prove that they are underpaid and overworked. Nothing unique here. It happens all the time in the public sector - just a game of leapfrog with no end in sight. But why don't some of the higher-paying organizations look at REDUCTIONS because compensation is much less elsewhere?

That's because the mantra in the Public Sector is "I'm entitled to me entitlements".

Joe Fontana ought to respectfully ask Vinay Sharma to simply withdraw the request.

doug rogers said...