Next Weeks May be Explosive as Massive Contracts for the City of Vancouver Get Hammered Out

Is this the thinking behind Vancouver's City Hall in-progress transformation?


There seem to be three main targets for the “rewards” of civic government – real estate, community grants and services that are being contracted out.

But with the filth that is emerging in Montreal over multi-million dollar civic contracts, it seems like the most obvious place to start.

 There are few if any civic governments that operate as a complete monopoly over all municipal services, although there are a wide range of the degrees to which this practice occurs from administration to administration.

In theory, contracting out is a way to save taxpayers money, as intermittent agreements introduce competition in terms of price and service levels – one contractor can easily be replaced by another if quality flags or costs rise.

It also takes away services from being delivered by public sector unions, which tend to add an extra dimension in terms of benefits and pay scale that private operators do not usually offer their workers.

According to the City of Toronto’s website (well, really Mayor David Miller’s page of defense against criticism over the municipal strike from earlier this year), 46 per cent of services and 75 per cdnt of the $1.8 billion in capital projects taking place in the City are delivered through contract service providers.

Think this is a high percentage?  Well, wading into the realm of Montreal municipal politics is murky, and far less detailed in terms of numbers, but the levles in which competition for civic contracts occur is massive.

About three weeks, ago, 5,000 city workers staged a half-day strike in protest of the fact that they have not had a contract since 2007.  Their main demand?  A 10 per cent wage increase over the next four years, which compares favourably to the 17.5 per cent over five years that Vancouver civic employees received in 2007.

Contracting out is a huge phenomenon in Montreal, however.

How a prolonged and drawn out work disruption hasn’t happened over these past few years is a mystery to me, particularly when you consider some of the massive contracts that have been handed out by the city.

First, here is Mayor Gerard Tremblay’s statement about the half-day walkout by the “blues” as city workers are referred to in Montreal:

“Since I was elected in 2001, the blue collars have not run city hall, and the blue collars are not going to run city hall.”

Contrast this with Tremblay’s administration’s decision hand out a $355-million water meter contract, the biggest ever awarded by the city, in 2006.  The Mayor subsequently cancelled this contract last month after an independent auditor’s report found the following:

  • $355.8-million price tag on the contract is only a fraction of the city’s costs for the project. It’s really over $600 million.
  • The city executive committee was given a presentation of the project that was planned on May 31, 2006. Estimtated cost of the project over three years: $95 million. The project price tag then went to $150 million, then to $242 million, then $400 million, then $423 million and then $600 million
  • Engineering-consulting firm BPR, which the city hired in 2005 to oversee the writing of the contract specifications and oversee the awarding of the contract, saw its own fees double from $7.4 million to $14.6 million.
  • Neither BPR nor the city ever conducted a study to substantiate cost savings that the firm contends will be generated by the project, particularly its pressure-management component.
  • The tenders were changed during the bidding process. For instance, the specifications went from the contractor financing the project up front to the city financing it up front.

This report was one of the first things that Tremblay had to encounter in the current municipal campaign, and he has surprisingly used his tough-on-civic workers approach as a way to deflect attention away from the scandal and also capitalize on a population that is not particularly favourable to the public sector union.  In fact, the union has just recently embarked on a publicity campaign telling taxpayers “Our real boss is you.”

Then we come to Vancouver, where support for city workers and in-house civic service provision seems to be much more popular with the general public.

CUPE 15 used a public appeal to lobby for six months’ notice of any contracting out affecting their members.  In fact, their position was that there should be a general ban on layoffs, or at the very least, that “no CUPE 15 member should lose their job as a result of contracting out.”

Few would say that the unions lost in terms of public opinion when compared to the fate suffered by former Mayor Sam Sullivan following the end of the strike, which concluded with an agreement that limited contracting out (although to what extent has never been divulged specifically).

However, with a full services review on the verge of being unveiled, and associated layoffs and significant spending cutbacks coming, it will be interesting to see not only how civic workers and their union react, but also how much contracting out plays into the city’s strategy for future fiscal restraint.

These next couple of weeks could be explosive. 

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