Former CAO Ann Pappert received $489,818 for 17 months work when she resigned

By Gerry Barker

March 16, 2017

I woke up the other day to read a city press release about the City of Guelph’s Sunshine list of employees earning more than $100,000 a year. I was not aware the city had its own Sunshine list.

There were some astonishing inclusions and exclusions.

According to the just released 2016 Provincial Sunshine list, former Chief Administrative Officer (CAO), Ann Pappert, was paid $263,757.32 in 2016. Now you would assume that was for the year but Ms. Pappert left the city May 26, 2016, Seems like a lot of money for less than five months work.

So I checked the 2015 Provincial Sunshine list and it showed Ms. Pappert was paid $226,060.96.

The only possible conclusion was that Ann Pappert was paid $489,818.26 for 17 months work as CAO, from January 1, 2015 to May 26, 2016.

This was reported by the city to the Province for inclusion in the 2015/2016 official Sunshine lists of those public employees earning more than $100,000 a year

First, let’s do a little math. We’ll divide the money the Province says she received in 2016 by 5 = $52,757 per month. Now multiply that by 12 to determine what her annual salary would be, $633,084. That can’t be possible.

But, the 2015 salary reported last March showed that CAO, Ann Pappert, received a $37,591 increase for 2015. This increase was 17.11 per cent more than her previous base salary of $219,657 earned in 2014. Apparently, it has been assumed, Ms. Pappert was paid $257,248 in 2015. That was not the case. According to the 2015 Sunshine List, she received $226,060.

Hmmm, there remains a serious difference of Ms. Pappert’s employment payments.

Deputy Chief Administrative Officer (DCAO) Mark Amorosi explained that the payment to Ms. Pappert was discussed in closed session prior to the approval of the 2015 budget, March 25, 2015.

For the past year, guelphspeaks has been trying to get at the truth because Mr. Amorosi said the increases decision was made by council in closed session, December 10, 2015. It included a retroactive payment of some $28,000.

Why does the Sunshine List show Ms. Pappert received $263,757 for five months work in 2016?

Does the city report what it pays its employees each year in the audited Financial Information Report (FIR) as required annually?

Or does it play games shoving expenses to the next year to avoid a negative variance that the city is not allowed to do and is required to balance its books when presenting the FIR at year end.

For the past five years of Ms. Pappert’s tenure as CAO, there has been a negative variance each year. That means the budget, of which Ms. Pappert oversaw, was overspent and money was taken from the reserves to balance the books as required by law.

Trouble is the reserves became seriously depleted dropping from a reported $70 million in 2009 to around $11 million in 2015. The BMA consultant group warned the city in 2014 that the reserves were in a “red flag” condition and required action to replenish.

Why was this allowed to occur?

But there is more:

Former Chief Financial Officer, Al Horsman, left the city in August 2015. Today his name shows up receiving $188,999 in 2016, the equivalent of a full year on the job. Not bad for eight months work … in 2015. The question is why did Horsman leave? He was deposed as CFO in the November 2014 reorganization of the senior management and switched to the Waste Management, Environmental Services and Engineering portfolio.

Horsman took over to discover the debacle of the deal made with the Rizzo brothers of Detroit to recycle material shipped from the motor city. The deal fell apart and was reported to have cost Guelph some $2.5 million. In December 2015, Solid Waste Manager Dean Wyman, who was involved in the Detroit deal, left for a similar job in Edmonton.

With Horsman gone, it left just three Senior managers, CAO Ann Pappert, Deputy Chief Administrative Officers (DCAO) Mark Amorosi and Derrick Thomson.

The revelation of the large increase awarded by council to the remaining three top managers in March 2016, triggered the resignation of Mr. Thomson who said he was taking a job with the Town of Caledon. In April, Ms. Pappert announced she was resigning.

Along with her duties as CAO, Ms. Pappert was also Chief Executive Officer of Guelph Municipal Holdings Inc (GMHI), for four years. As CAO she signed off, along with her successor at GMHI, Pankaj Sardana the jointly presented the report to council, acting as shareholders, May 16, 2016. It revealed that the city-owned GMHI was broke and had lost $26.6 million. Ten days later she left her job.

In June, the city persuaded Mr. Thomson to return and take over as CAO.

The 2016 Provincial Sunshine List states Mr. Thomson received $214,026. Due to turbulence in the executive offices, Mr. Thomson revealed in October his new CAO salary is $230,000, plus a taxable benefit of $9,664. Sigh! The more things change, the more they stay the same.

Last week, the 2016 city’s “Sunshine List” release said that in 2016 Mr. Thomson earned $245,302 plus the taxable benefit for a total of $254,966. Mr.Thomson should be commended for giving the citizens his salary details despite the fact that they do not jibe with the official provincial data.

Here’s another strange development. DCAO Scott Stewart was hired in November 2015 to replace Mr. Horsman. There is no record in the provincial Sunshine Lists of his hiring including pay details, in either the 2015 or 2016. He obviously performed his duties in 2015 and 2016 but the record shows he doesn’t exist. Well he does and he is doing a fine job.

Yet another example of Voodoo accounting

In the case of DCAO Colleen Clack who was promoted in June to replace Mr. Thomson as chief of operations and public transit, there is no evidence that reflects her new responsibilities. She is listed at $145,316, the rate of her former job in 2015.

I believe that when someone holds a job in the calendar year, his or her remuneration should be reported in that year. How can the administration budget accurately when it conducts its business this way? We’re not talking about a few dollars here but thousands. It represents a deliberate distortion of the staff costs in the reporting year.

In 2015 the city listed the payments made to police staff earning more than $100,000. This year according to the city release, the police are not included because they file their own Sunshine List to the Province. But are the police numbers included in the total staff count?

Finally here is my favourite example of Voodoo management practices.

In 2014, Guelph Police Chief Bryan Larkin is pushing the Police Services Board to spend $33 million for a major renovation of police headquarters.

The city representatives on the Police Board, Mayor Karen Farbridge and Coun Leanne Piper support him.

Remember in June 2014 he announced that he is leaving August 31 to take over as Chief of the Region of Waterloo Police Department.

That did not stop Larkin from promoting that the city coughs up the money for the renovation. So his final payout of $183,553.80 was reported in the 2015 provincial Sunshine list. He only worked eight months in 2014, but received a full year of pay,

But citizens in 2015, were also paying his replacement, Jeff Deruyter $188,283.56. According to the Provincial Sunshine List in 2015, the cost of two police chiefs was $371,836.

When the 2015 budget was prepared after Mayor Guthrie took over, the finance department had ample time to adjust the 2014 Larkin figure to reflect the exact time he was on the job. It is now clear that our city, despite the fact that he resigned in August 2014, paid him for the whole year.

And you wonder why our taxes and user fees outpace the Consumer Price Indexes promised to be reduced by Mayor Guthrie in his election campaign.

The 64 firemen plus those paramedics in the $100K bracket are included in the 2016 list.

These folks are public employees and the public has the right to know who they are and what they earn if it’s more than $100,000. It appears the same rules do not apply to the non-union managerial staff.

When comparing the two Sunshine lists, 2015 and 2016, the number of employees who have left the city also struck me.

The city release states there are 2,235 full-time and part-time employees. But what is the composition of staff and where do they work? How many full-time and part-time contract workers are employed and are they counted in the staff total?

This mismanagement of senior staff salaries, bonuses and taxable benefits has to stop. It is not transparent or accountable.

The people have to act to hold their elected representatives accountable. That means the council must stop conducting the city’s business in closed sessions thwarting the public’s right to know. Finally they must stop making stupid decisions that end up costing citizens its treasure.

The reserves are depleted, the debt is up and too many deals have been made based on potential future revenues such as the Police Headquarters project that is dependent on future development fees.

I hate to use the word “purge” but it applies here based on the evidence of financial mismanagement.

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6 Comments

Filed under Between the Lines

6 responses to “Former CAO Ann Pappert received $489,818 for 17 months work when she resigned

  1. Joe Black

    It stinks period. We need a forensic audit.

  2. Capricorn

    Glad that you’re paying attention for the rest of us. I only wish that city hall had to answer to some of your findings, or, at the very least, your comments would have greater public exposure.

  3. gjmg

    The Sunshine list shows what was actually paid, not the rate of pay. Severance settlements are part of what is paid, They are not just paid when someone is “fired”, the same applies to a demotion. Also some “resignations” are really arranged with a severance payment and agreement of non-disclosure of the reasons and severance deal. I suspect some of these might help with the arithmetic.

    • gjmg: I gather you agree that Ms.Pappert deserved the close to half million dollar payout over 17 months. I didn’t make up the numbers that were published by the province. You miss the point that she received the $263K for 2016 when she worked for slightly less that five months. This whole deal Was discussed in a series of closed session meetings by council.Shame.

  4. Laura

    I believe I read somewhere that the Ministry’s procedures for reporting allows municipalities to exclude employees that are collecting a salary continuation, long-term disability and other exceptional situations as they are deemed in-active. That is why we never saw Derek McCaughan’s or Janet Laird’s packages (two years pay is what the rumor was they each got) and all the other senior managers that were given packages when they were let go. I also suspect that will be the case with Ann Pappert as she must be continuing to be paid in 2017 as part of her terms of her contract. None of these will ever show up on the sunshine list because they are no longer “active” employees and the city doesn’t have to disclose them. Is there a way we can find out how many employees are receiving yearly paychecks over $100,000 that don’t have to be disclosed?

    • Laura: This is the problem. Details of the non-union managerial staff’s contracts are not revealed. There is probably a Farbridge-inspired bylaw hidden somewhere that allows this to occur. I have maintained over the years that these senior managers are employees paid from the public purse. Therefore, we the citizens, are entitled to know details of these contracts and the circumstances of disposition.

      We should remember that Ann Pappert resigned before her contract expired. She initiated her resignation while at the same time was negotiating with the Province to obtain a new job as an Assistant Deputy Minister in the Culture, Tourism and Sport Ministry. This is a position, one would assume, is carefully vetted and would take some time to conclude.

      How did this impact her performance as the CAO of Guelph, the person in charge of the entire city staff? When did council know Ms. Pappert was seeking employment elsewhere? If she resigned in April but did not leave until May 26, what steps did council take to replace her? Was a search for a replacement with a reputable placement agency launched? What were the circumstances of hiring Derrick Thomson to replace her in June? It seems to me like an extraordinary short time frame in which to select the top civil servant of the city.

      As a taxpayer and resident of Guelph, I resent the cavalier attitude of the staff and council regarding the rights of the people they are paid to uphold being ignored or abused. Public involvement and participation is suppressed by policies and bylaws designed to protect the interests of the staff and council. We have just witnessed an egregious act that rewards an employee whose four-year performance was carefully described a year ago when a citizen revealed the CAO’s track record. The author of that release, the details of which were never disputed, was threatened with legal action by Mayor Guthrie. That did not happen. It only illustrated the wide gap existing between those imbued with power and the people they are sworn to represent faithfully and honestly.

      So, December 14, 2015, in closed session, council approved bylaw 19995 that indemnifies any employee or elected official who may face any legal procedure brought by a citizen, association, corporation by paying the legal fees of staff or member of council. Further this included past or present emplouees, facing the legal action. Just another form of public suppression of its legal participation.

      Now we are starting to discover that we also get to pay for it, whether a legal procedure is against city staff or council. The bylaw does not cover the expenses of a legal procedure brought by a senior staffer against a citizen. The current CAO, Derrick Thomson, seems to believe it does.

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