Port Moody "sweetheart" labour deal costs taxpayers $450,000

Post by Mike Klassen in

10 comments

sweethearts
Port Moody's sweetheart labour deal with CUPE is a bitter pill for taxpayers

For many of us that live in Metro Vancouver, the labour dispute that hit both Vancouver and North Vancouver in 2007 is only a memory, albeit a bitter one for many involved. The municipalities in Metro Vancouver were bargaining hard to keep wage settlements down (good foresight given what happened to our economy in following years), but in the end Richmond Mayor Malcolm Brodie broke ranks and signed a sweetheart deal with CUPE.

The collective agreement provided unions with over 17.5% in pay raises over five years, and a bunch of new benefits. Once Richmond folded, Vancouver and North Vancouver were essentially stuck with no option but to match Richmond's deal. These cities were "whipsawed" into submission.

One important detail often overlooked was that Port Moody actually became the first city in Metro Vancouver to sign a collective agreement in 2007 – agreed to before Richmond's deal. Port Moody's agreement was for approximately 39 months and would have provided their employees with 9.75% in pay increases. The signed agreement was set to expire last March – just at the end of the 2010 Games.

In theory, the management in Port Moody would by now have negotiated a new collective agreement with their employees. However, instead of trying to reach a new labour deal, Port Moody city council quietly chose to reward their employees with the same generous 17.5% deal provided by Richmond, Vancouver and other cities in the region.

You're probably wondering why the City of Port Moody would voluntarily dump a signed agreement that kept wage increases to around 10% over three years in favour of a costlier deal over five. We'd also like to know what Port Moody city council's logic was in making this deal.

The reality of doing labour deals in 2010 is altogether different than it was as the economy was peaking in 2007. About six months ago as CUPE employees sat across from City management demanding wage increases, they would have to face up to the new reality of a global economic downturn and dwindling tax revenue. Wage increases would be a tough sell.

As a comparison look what's recently happened in Victoria. Finance Minister Colin Hansen has signed two-year "net zero" agreements with both the BC Government Employees Union, as well as medical services unions. Due to current economic conditions, these BC public sector employees knew they were in no position to ask for wage increases. Contrast this with the City of Port Moody employees that will receive 4% this year and 4% next year under their new agreement.

CityCaucus.com contacted Gaetan Royer, City Manager for Port Moody to get his perspective on the issue. This no-nonsense civil servant pulls no punches when he states (our emphasis):

Thanks to Port Moody's exemplary labour relations and CUPE's cooperation, I negotiated a 39-month collective agreement that would have ended in March 2010. The agreement had a modest 0.25% wage increase on January 1st 2009. Our deal was approved by Council and ratified by Metro Vancouver well before the start of bargaining in other cities in the region.

Other cities initially attempted to negotiate similar agreements. For various reasons, a few cities agreed to a much richer five year agreements with 4% increases on January 1st 2010 and 2011. From that point, all other cities matched the 60 month settlement.

Our deal remained at 39 months and 9.5% overall until the last municipal agreement was concluded in that round of bargaining. Then the city of Port Moody voluntarily re-opened its own agreement to offer parity with other CUPE agreements in the region. The feeling was that our CUPE local should not be shortchanged for having shown such exemplary cooperation with its employer. Once we had lost the ability to influence settlements, parity with other CUPE locals was seen as more important.

One can easily conclude that if the region had followed the Port Moody model, all municipalities would be bargaining in a very different context today. It is highly unlikely that any employer would offer 4% per year increases in the current economic climate. At this time, 80% of the public sector agreements are being settled at or near net zero. In this context, a 39 month 9.5% agreement looks a lot more fiscally responsible than the 60 month 17.5% agreement we have today.

Talk about not mincing words. Now there is a City Manager who is looking after the needs of taxpayers, while maintaining respectful relations with his unionized workers at the same time. Royer's note clearly shows that by voluntarily re-opening the agreement, the taxpayers in Port Moody were immediately on the hook for increased labour costs.

Is this an example of the union exerting their influence on elected officials? A quick review of the CUPE candidate list we first reported on a while ago indicates that Mayor Joe Trasolini as well as councillors Bob Elliot, Karen Rockwell and Meghan Lathi were all endorsed by the civic union. What influence this had we cannot accurately surmise.

So how much did voluntarily re-opening their collective agreement cost Port Moody taxpayers? We posed this question to the City Manager, and here is how Mr. Royer responds:

The collective agreement required to be modified to 1) add the two annual increases and 2) extend the term. This was done by mutual agreement between CUPE Local 825 and the city. Final approval of the amendment required:

  • Resolution by Port Moody Council
  • Vote by CUPE Local 825 membership
  • Port Moody being a member of the Metro Vancouver Labour Relations Bureau, ratification by the Bureau was also required

The additional 4% per year for two years adds up to approximately $450,000 (Jan 1st 2010 to Dec 31st 2011). For Port Moody, this translates into a 2% property tax increase.

Some qualifications regarding the cost difference. There is no guarantee that a net 0% agreement with municipal unions could be reached in the region even though this is what provincial unions settled for. What I said is that it is highly unlikely that settlements would reach the 4% mark in the context of an economy that is emerging from a recession.

Kudos to Mr. Royer, who unlike senior officials in Vancouver that obfuscate, hide behind privacy legislation or simply don't respond to emails, was open and honest about the impact of re-opening this collective agreement had on Port Moody taxpayers. It's refreshing to know that some cities still have professional and non-partisan public servants that you can rely upon to give you responses to simple and basic questions.

As for other cities such as Vancouver, the prospects are grim. CUPE-backed city councillor Geoff Meggs recently moved a motion asking that Vancouver be removed from the Metro Vancouver Regional Labour Relations Bureau. The Bureau negotiates collective agreements on behalf of a number of municipalities to prevent what is known as the "whipsaw effect". That's when one municipality signs a collective agreement, followed by another that considers the previous deal the new base to work from. In the end, taxpayers end up paying for this out of control and undisciplined process for negotiating collective agreements.

What has quietly happened in Port Moody is merely a sign of things to come in 2012, and beyond. Once these five-year deals end, you can expect CUPE's well-oiled machine to pick off one municipality at a time until they get their ultimate sweetheart deal.

It may not make for headline news in between collective agreements, but it would appear that while other levels of government and their employees are living within their means, civic unions are getting ready to negotiate even higher pay settlements starting next year.

- post by Mike

10 Comments

Wasn't Brodie the only "right of centre" mayor to be endorsed by CUPE and get funding for his campaign? Coincidence?

This is not rocket science here. Connect the dots.
Follow CUPE donations. Look at where all the breakthroughs in negotiations were.
Look at the story being done by the Vancouver Sun on campaign financing.
CUPE has several Councils and School Boards "in their pockets."
CUPE does not spend hundreds of thousands of $$$ because they are civic minded, they do it because they can then control votes.
Look at Vancouver with Olympic housing and the payoff to union members.
Look at New Westminster with the introduction of the "living wage" policy. All CUPE driven stuff
Who benefits? Certainly not the public, or the taxpayer.

I am surprised to read this. Based on this logic, if you have a private sector company and your competitor negotiates a more costly labour agreement, then you need to up your wages as well. Not! You use this as an opportunity to keep your costs down and increase your sales. We need a public inquiry to find out what happened here and why the politicians caved.

CUPE spends big money to control city councils and school boards all over the Lower Mainland and beyond.

They get their people elected through a combination of copious amounts of union money and voter apathy. Then they control issues and control council and school board votes.

The New Westminster "living wage" is a prime example as one commenter has pointed out. New Westminster is fully under the control of CUPE and one of the most, if not the most, heavily taxed municipality in the province.

The CUPE-funded trustees entrenched on the New Westminster school board even tried to get bottled water banned from schools under the pretext that it was an "environmental" issue. But all you have to do is Google "CUPE bottle water" to see that banning bottled water is a major CUPE agenda across the country (something they didn't bother to mention).

CUPE opposes bottled water because, get this, they think it's a form of contracting out. Talk about taking ideology to an extreme.

And the taxpayers are the ones who suffer from all of this BS while sweetheart CUPE wage settlements fund the election and re-election of more CUPE candidates.

It's a viscious cycle and a perversion of democracy.

If CUPE could find a way to monopolize air they would. As it stands they already have a monopoly on water, garbage removal and sewage. What ever happened to finding the best value for taxpayers? CUPE are bigger shakedown artists than the Mafia.

To Ken
Your question "Wasn't Brodie the only right of centre' mayor to be endorsed.......
Wayne Wright in New Westminster wasn't formally endorsed, but there was a note supporting him slipped in every mailout to CUPE membership and supporters.
CUPE policy stops them from formally endorsing Wright. If you look at Wright's voting record, particularly at Metro Vancouver (GVRD), it will be shown that he votes in lockstep with Corrigan from Burnaby.
Wright's chameleon act is quite extraordinary, but make no mistake, up to now he has been kept in office by CUPE support. On all key votes, he delivers his debts to CUPE.

I live in Port Moody. It is a sad situation. Mayor Joe being led around the bend by politicians with private agendas. Elliott, Rockwell,Lahti, all owned by special interest groups. What a monumental waste of valuable and scarce resources.

Great reporting on this. I hope some MSM picks it up. We need to ban union and corporate donations in city politics.

"The feeling was that our CUPE local should not be shortchanged for having shown such exemplary cooperation with its employer."

I think this is correct. I don't see how you can blame the city of Port Moody for wanting to avoid this situation.

"One can easily conclude that if the region had followed the Port Moody model, all municipalities would be bargaining in a very different context today."

Exactly.

From the comments:
"Look at New Westminster with the introduction of the "living wage" policy. All CUPE driven stuff
Who benefits? Certainly not the public, or the taxpayer"

True! Because the public and taxpayers would be so much better off if their city staff were living in poverty.

"Based on this logic, if you have a private sector company and your competitor negotiates a more costly labour agreement, then you need to up your wages as well."

You do if you want to keep your staff. Staff turnover can be a huge cost (in money and efficiency). Who's to say a pay raise won't be paid back in reduced staff turnover?

While this article is now a few months old, as a former CUPE member I believe I can contribute something useful. I landed here because I googled "labour relations" and "mafia". Try googling "labour relations mafia" (one term) instead and you'll get one hit - an old comment by me.

There's always more to learn and I've just learned a little more from this article and the comments. Perhaps others will be interested in learning about my latest initiative. I'm asking a federal agency, or perhaps Parliament itself, to conduct a full public inquiry into what I am calling an indictment:

http://www.uncharted.ca/images/users/ssigurdur/20101012_budgell_complaint_to_cjc.pdf

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