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Auditor general questions wages

Corporate salaries called 'high' in report

By: Larry Kusch

Friday, Jan. 18, 2013 at 8:06 AM | Comments: 0

KEN GIGLIOTTI / WINNIPEG FREE PRESS Manitoba auditor general Carol Bellringer. releases it�s annual Report of the Legislature .it contains 8 chapters ,one dealing with the Office of the Fire Commissioner with financial irregularities adding up to $300,000 regarding payments to employees that they were not entitled to some using fabricated documents KEN GIGLIOTTI / WINNIPEG FREE PRESS

Manitoba's auditor general wants the province to "assess the reasonability" of salaries paid to top officials at the corporation that oversees The Forks Market and operates the parkade at Portage Place.

In a report this week, Carol Bellringer called the pay received by North Portage Development Corp. CEO Jim August "high" compared with salaries earned by provincial deputy ministers and senior executives of Crown corporations.

In 2011, August was paid $228,937, according to information provided by the NPDC on Thursday. The figure includes a contribution to an RSP, a car allowance and any bonuses that may have been paid.

Bellringer reviewed North Portage's books at the request of a member of the public. She is not obliged to investigate citizen concerns, but does so occasionally.

The North Portage Development Corp. is owned equally by the city, the province and the federal government. Each level of government appoints members to the organization's board, which sets the CEO's salary. August, in turn, is responsible for setting the salaries of those who work for him.

A provincial government deputy minister can earn anywhere from $105,951 to $162,331.

In 2011, Bob Brennan, then-president and CEO of Manitoba Hydro, the province's largest Crown corporation, earned $229,000, a Hydro spokesman said Thursday.

Rick Bel, chairman of North Portage's board of directors, said the corporation recently reviewed its upper management salaries with the help of a consultant and found its executive compensation packages were in line with what was paid by similar organizations. "The board is happy with what those salaries are," he said Thursday.

In her report, Bellringer said the province told her it has no authority to regulate remuneration paid by the NPDC. That authority rests with North Portage board, it said.

In an interview, Bellringer said that may be technically true, but it shouldn't stop the province from playing a role. "We still stand behind the recommendation," she said.

The North Portage Development Corp. and its subsidiary companies own and operate The Forks Market and the Portage Place IMAX Theatre, which is slated to close at the end of March. It operates the parking lot in Portage Place mall as well as several others in the downtown area. It also collects lease revenue from the Johnston Terminal at The Forks, the Inn at the Forks, Portage Place and Citytv. In 2012, it had revenues of $11 million and expenses totalling $9.4 million.

In its most recent fiscal year, Manitoba Hydro earned a profit of $61 million on revenues totalling $1.9 billion. In 2011, Hydro also paid two senior vice presidents $177,000 each, while another half dozen senior officials earned salaries in the $151,000 to $160,000 range.

In 2011, Paul Jordan, North Portage chief operating officer, earned $140,462, while Paul Webster, the NPDC's chief financial officer, made $150,890. The corporation does not have a pension plan.

Meanwhile, Bellringer also recommended the North Portage Development Corp. amend its bylaws to limit the number of terms a board member may serve. Directors appointed by the three levels of government are named for a three-year term, but there is no limit on how many terms they can serve. The longest-serving members have been on the board for 11 years.

The auditor general also recommended the province, in consultation with other levels of government, encourage the corporation to release more detailed financial statements to the public. Currently, it discloses consolidated financial statements for the corporation as a whole, but doesn't provide a detailed breakdown for different segments of the business.

larry.kusch@freepress.mb.ca

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