Ex-CAO reveals to city costly change to payouts
A former chief administrative officer for Timmins says a change made to the city’s retirement benefits in the last 10 years could be costing the city millions of dollars.
A question was raised whether the actions of previous city councils were legal in allowing for this.
The presentation, which appeared to catch most members of city council by surprise, was from former CAO Grant Chevrette. He served 35 years at city hall, 10 years as the CAO during the 1990s and into the new millennium.
Chevrette told council the benefit involves the payout of sick leave credits for city employees. He said this began back in 1975 when the city was dealing with a variety of workers from different jobs from the old Town of Timmins, along with workers from Whitney, Tisdale and Mountjoy Townships.
He said the city decided it would provide a sick leave benefit for every city worker, regardless of their position.
“What we want to emphasize is that employees, regardless of their bargaining unit, were all treated the same with regard to sick leave,” said Chevrette.
The only limitation, he said, was the sick leave benefit was limited to six months.
Then came the 1990s and there was a recession in Ontario. Chevrette said in the late 1990s, a freeze was negotiated by the city with eight municipal bargaining units on the payout of accumulated sick leave credits to new employees.
Chevrette said the difference was that new employees could accumulate sick leave credits but would not receive a payout for them on retirement.
City employees hired prior to the freeze continued to accumulate sick leave credits that would be paid out on retirement. The thinking was that once this group of city workers retired, there would be no further liability on the city for sick leave payouts.
“This status quo prevailed for more than 10 years,” said Chevrette.
“Then in 2008, council negotiated collective agreement amendments with four bargaining units.
He said this included public works, inside workers, transit workers and library workers and effectively rolled back the freeze on sick credits and payouts,” he revealed.
Chevrette said for some reason, the city decided to bring back the retirement payout. Not only that, but the benefit was increased and the payout was made retroactive.
“These amendments with regard to sick leave, doubled the rate of sickleave accumulation from half a day a month to one day a month; made all future sick leave credits eligible for payout on retirement, and made all sick leave credits accumulated for the 10 years of 1998 to 2008, that had been frozen for payout purposes, retroactively eligible for payout on retirement,” he said.
“We wonder whether council has the legal authority to negotiate such substantial and costly improvements to sick leave benefits in expired collective agreements.”
Chevrette added that the financial liability is not only increasing for the city, but it is happening “at an alarming rate.”
He said there are still four other municipal bargaining units that are not included in the new benefit package.
“In this day and age how can council deny equal treatment for the payout of accumulated sick leave credits?”
Chevrette said it is easy to see that the other bargaining units — the firefighters, nurses, water plant workers and airport workers — will all qualify for equal treatment.
“What will this cost city taxpayers?” he asked.
Chevrette told council that in 2001, the post-employment sick leave liability for Timmins was listed at $3.6 million in the city’s audited financial report.
In 2016, that same audited report showed the sick leave liability has risen to $13 million, which he said was an increase of more than $600,000 each year.
Chevrette said retirement benefit costs are rising, and if the city provides it for one union group, then the city can eventually expect to pay for all union locals.
Chevrette posed a few closing questions to council, but said his main question was what was the city’s justification for re-introducing the sick leave credit benefits 10 years after all parties had agreed to the freeze in 1998.
He also asked if any other munici- pality in Ontario had done anything similar. And he asked, if the city has any sort of a plan to deal with the growing and costly expense.
Mayor Steve Black thanked Chevrette for his presentation and said although the 2008 changes seem recent in the grand scheme of things, most members of the existing council were not around at that time.
“I am sure we will ask staff to follow up on the list of questions you’ve raised, and come back to us with a report,” said Black.
Several city councillors expressed dismay with the report and said council needs more information on how and why the benefits were re-introduced.
Grant Chevrette, the former chief administrative officer for the City of Timmins, dropped a bombshell on council Tuesday night when he revealed that a costly retirement sick leave benefit that was discontinued in 1998 has been re-introduced for several of the cityís bargaining units and it is costing the city more than $600,000 a year. Several city councillors have asked the cityís finance department to provide a full report on Chevrette’s presentation.