Penticton city council says laying off three city managers following a core services review was necessary to control a debt that began spiralling out of control in 2002.
At a press conference Friday, Mayor Dan Ashton said that when the current council took office in 2008, it realized the city was spending unsustainably, with expenditures rising at a rate far greater than the consumer price index.
The review, which began in the fall, was conducted by the consulting firm Helios Group. It examined in detail all of the city‘s operations to determine if its operating structure could be streamlined.
On Tuesday, the city laid off Jack Kler, the city‘s director of corporate services; Dwayne Burdeniuk, director of human resources; and Terry Andreychuk, general manager of the city‘s electrical utility.
Ashton said severance packages have been offered to the employees but are not yet finalized. He would not discuss details of the layoffs.
The summary of the review revealed the City of Penticton is not in a healthy financial position. Since 2002, its operating costs have risen sharply and sit anywhere between 10 to 95 per cent greater than comparable cities – Mission, Vernon, Campbell River, North Cowichan and Port Moody – used to compile the review.
The city‘s long-term debt has grown by 600 per cent to $72 million in 2008, up from $10 million in 2002.
By comparison, long-term debts of peer cities averaged $22 million. Of the total city debt, Ashton said about $53 million stems from costs related to the South Okanagan Events Centre.
The review indicated managerial salaries in Penticton were no greater than salaries in peer cities. However, in examining the management and staffing structure, the results indicated Penticton has more employees than it needs.
From 2002 to 2008, the city‘s costs rose by eight per cent annually while the consumer price index rose only 2.25 per cent annually.
Helios representative Kyle Stamm, who attended the press conference, said he has performed other core service reviews within the public sector, but that Penticton‘s is the first performed for a municipality.
“When you take a look at public-sector organizations, there are many commonalities,” Stamm said.
Council did not release the report itself to the public.
“Information at this level of detail would not be appropriate for sharing publicly as it does contain some city employees‘ personal information,” Ashton said.
News of the city‘s skyrocketing debt load comes as the city gets set to upgrade the Penticton Community Centre pool.
However, Ashton said the pool was in need of a $4-million upgrade anyway, and council wanted to take advantage of $15 million in government grants for the $23-million makeover.
City staff will look over the findings and recommendations cited in the core review, then have senior managers consult with their corresponding departments and with council to chart a course for the city as soon as possible.
At the conclusion of the press conference, Andreychuk‘s wife, Deb, confronted council about its decision to lay off staff only one day after the review was presented to council. She called it “devastating.”
Ashton would not say if more layoffs are coming.
“It‘s fair to expect that we have to work collectively together to make this a better place,” he said. “How we work together will dictate what the future looks like.”
