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West Coast Ferries Forum :: Ferry Discussion :: BC Ferries - News :: Provincial review of BCFS & TransLink
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AuthorTopic: Provincial review of BCFS & TransLink (Read 1,123 times)
Flugel Horn
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Re: Provincial review of BCFS & TransLink
« Reply #25 on Nov 6, 2009, 7:49pm »
Here's a great recommendation:

Quote:
Reservation fees are not regulated currently because they are considered to be ancillary revenues rather than an element of fares.

Reservation fees are directly related to the service of transporting vehicles and passengers and, as such, are effectively part of the fares and, therefore, should be regulated.


What about assured-loading tickets?

=============================

Here's a comment about Mr. Hahn being both management and a board member:

Quote:
In 2005, the BCFS Chief Executive Officer (CEO) was appointed a voting Director of the BCFS Board. While the Act does not expressly prohibit appointment of the CEO to the Board, a Board needs to maintain independence from their CEO and other executive to support the governance model that separates the roles and responsibilities of the Board and management and to allow the Board to properly fulfill their roles of assessing the CEO‟s plans and evaluating, compensating and, if necessary, replacing the CEO.

A CEO would generally attend Board meetings as a matter of course, but the Board‟s independence from management is at risk of being compromised if the CEO or another executive is a voting Board member.

Recommendation
- We recommend the province amend the legislation to require that the BCFS CEO and other executive not be members of the Authority or voting members of the BCFS Board.


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Re: Provincial review of BCFS & TransLink
« Reply #26 on Nov 6, 2009, 8:18pm »
The report also expresses some concern that the assistant Ferry Commissioner- that being the body which oversees the operations of BC Ferries- is the brother of one of the directors of BC Ferries. While there has been no allegation of conflict of interest, it is noted that the public may well perceive a conflict.
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Re: Provincial review of BCFS & TransLink
« Reply #27 on Nov 6, 2009, 8:21pm »
Here are some operational comments:


Quote:
On average, the ferries run only half full.

In 2009, capacity utilization on all routes averaged 52% and specific routes were as low as 25% and as high as 75%.

Capacity utilization by route group was as follows:
- Major routes – 64%;
- Langdale/Horseshoe Bay – 56%;
- Minor routes – 42%;
- Northern routes – 66%.

While BCFS does monitor capacity and has identified opportunities for service adjustments, there has not been a comprehensive re-evaluation of the service model aspects of how frequently and at what times each community is served and whether there are other communities that should be served.


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Re: Provincial review of BCFS & TransLink
« Reply #28 on Nov 7, 2009, 8:44am »
Here's the lead-in to a Nov.7th Times-Colonist commentary on the ferry / translink report:


Quote:
Apart from the fact the boss and the board are paid too much, the boss shouldn't be on the board, the board is too big, the regulator doesn't have enough oversight power and there's little accountability, B.C. Ferries is working just fine.


Full commentary here:
http://www.vancouversun.com/business/Ley....6437/story.html
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Re: Provincial review of BCFS & TransLink
« Reply #29 on Nov 7, 2009, 10:16am »
Canadian Press referred to the comptroller general’s report as “scathing”. I think that about sums it up. Shirley Bond apparently found some solace in the amazing statement, "From our perspective as we received the report, the one thing that we note is that she is certainly not suggesting that we start all over again." No, you wouldn’t want to throw the baby out with the bathwater, eh, Shirley? But, boy, is the bath water ever scuzzy.

To recap some of the findings, you have a BC Ferries hierarchy with an overpaid CEO and a bloated, handsomely remunerated board, and an executive branch where generous bonuses are lightly earned. You have a BC Ferry Authority, the one shareholder, acting on behalf of the citizens, who’s board seems to have as their sole activity appointing themselves directors of BC Ferries Services, where they then vote themselves generous raises. There is a Ferry Commission who’s second in command is directly related to a board member of the company being ‘regulated’. You have the Coastal Ferry Act, which, along with the Commission, has been structured to have no mandate to protect the interests of the people of BC who depend on the ferry system. There is no vehicle for dealing with customer complaints. There is insufficient transparency in accounting, and an undue reliance by the Ferry Commission on unverified figures supplied to it by BC Ferries. And despite Rob Clarke’s vigorous defence of the company’s debt servicing plan at the last AGM, you have the comptroller expressing skepticism at the Company’s ability to finance any capital projects beyond a five year time frame. There is the indictment of the Coastal Ferry Act’s ridiculous Alternate Service Provider process, which, as the comptroller points out, has cost BC Ferries considerable money, and has produced nothing, and doesn’t promise to produce results in the future. BC Ferries’ ability to charge reservation fees without them being regulated is criticized, as is it’s move to use it’s monopolistic position and exclusive terminal rights to compete with unsubsidized Seaspan for trailer traffic.

The report criticizes the very essence of the system the Liberals set up when it remarks on the lack of controls built into the Coastal Ferry Act and the Ferry Commission to “protect the public service mandate of the ferry system”. Further to that, the Comptroller states, “There is a risk that a focus on the profitability or sustainability of the ferry operator exclusively could be at the expense of the public service mandate of the ferry system. For example, short term decisions, focused on maximizing profit to the operator, could compromise the public service goals of the ferry system by not considering fully the interests of users of the ferry system, local communities and taxpayers.”

Strong words, but nothing that many of us have not noted before as being an inherent flaw in this whole setup.

The report cites the need for BC Ferries to be subject to the Freedom of Information Act, and for it to give a proper accounting of the apportioned costs of each route, something it has never done.
Ms. Wenezenki-Yolland concluded that BC Ferries is basically well-run, with acceptable safeguards in place to assure sound business practises, and she stated that the province's ferry infrastructure was functioning as it was meant to. But she provides more than enough examples to come to a rather different conclusion. For me, the most glaring is the statement that the basic setup of the Coastal Ferry Act and the Ferry Commission does not take into account BC Ferries' function as a public service. It's all about the need to make enough money.

Will the Liberals make any changes based on this report? Doubtful. The release of a report in the last couple of days which pointed out that the benefit of the Olympics is a small fraction of what the government was claiming had Campbell crowing about the huge benefit of the Games. This is a bunch that will hand you a glass of dandelion juice and tell you how wonderful it is that it's not slug guts.
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Re: Provincial review of BCFS & TransLink
« Reply #30 on Nov 9, 2009, 12:41pm »
Reaction statement from the Chair of BCFS (and also the Authority):


Quote:
For Immediate Release
09-062 November 9, 2009

STATEMENT BY BC FERRIES’ CHAIR OF THE BOARD
VICTORIA

I am extremely proud of BC Ferries’ accomplishments since 2003.

The Board, management and employees have all contributed towards advancing the company from a dysfunctional crown corporation to a financially sound and progressive commercial enterprise.

Over the last number of years, BC Ferries has overhauled a large portion of its fleet and invested over a billion and a half dollars in its vessels, terminals and systems. During this same period, BC Ferries has returned $490 million to the people of British Columbia.

Success speaks for itself and our customer service ratings are at their highest levels ever. BC Ferries is now regarded as one of the leading ferry transportation companies in the world.

The advances achieved over the last half decade were due to a number of important contributing factors. These included: independence from political interference, strong Board and management leadership, independent financial borrowing capability and sound commercial business practises.

Since BC Ferries was created as an independent enterprise six years ago, its entire decision making, policies, and practises have been built on a commercial business platform.

The BC Ferries Board of Directors is currently reviewing the Comptroller General’s report and will meet with the Minister of Transportation and Infrastructure once a suitable time can be arranged.

Elizabeth J. Harrison QC
BC Ferries’ Board Chair


http://www.bcferries.com/bcferries/faces/attachments?id=147221
===============

- I didn't realise that BC Ferries is financially sound. There's a lot of debt to be paid on a long term basis.

- The $490 Million returned to the "People of British Columbia" is maybe a reference to payroll costs? I'm not sure if that's what she's alluding to. She didn't quantify the impact of the move towards more user-pay on the smaller routes.

- Their key premise is in the 2nd-to-last paragraph.

I wonder if she's forgetting about Gordon Campbell's political-interference in October 2008 when he announced a reversal of a service-cut decision and announced a fare-reduction, both without consulting BC Ferries first ? Re-read the 2nd-to-last and 3rd-to-last paragraphs with that October 2008 Cambell interference in mind.
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Re: Provincial review of BCFS & TransLink
« Reply #31 on Nov 9, 2009, 1:34pm »
A bit of reading into too much. These types of "statements" are purposely generic. They're not written specifically to address detailed responses to reporting. Seen many of them by the pound.

A company can carry debt, and yet be financially sound, its a matter of balance of revenues to debt. BC Ferries is carrying a large volume of long term debt (to service the purchasing of
the new ferries and capitalisation for terminal improvements).

In other words, you could be financially sound personally, but still carrying debt that needs to amortised such as the loan for that Ford Taurus Station Wagon, and of course the mortgage on your house (partially offset by real estate market demand valuation)

The $490 million would technically include the payroll, but not exclusively. BC Ferries purchases goods and services shoreside
as does any large company and those purchases mean economic activities for the suppliers.

I would disagree with the aspect of the 2nd to last paragraph, that's where the problems arise. BC Ferries is not a true private corporation of the size of its self-imposed comparatives, that is
there's no Class "B" shares to be placed on the open market as
there is with Coca-Cola for example. BC Ferries is not specifically a Crown Corporation, but rather an unusual blend of the two.

The comparatives for its compensation to Executive Team members and the volume of Board of Directors should be existant
Crown Corporations, not the private sector.

The section in the report regarding Board composition was interesting. Agree with it. The number of Board members should
be reduced, the CEO's position on the Board eliminated, and I would reduce the compensation for Board members by 70%. Also would remove one or two of them that are obviously politically
motiviated appointments.

There's no need to pay each Board member $48,000 to $90,000 to attend monthly meetings. It's not a full time job.

I'd also reduce Hahn's compsensation by 60%.
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Re: Provincial review of BCFS & TransLink
« Reply #32 on Nov 10, 2009, 10:11am »
"Over the last number of years, BC Ferries has overhauled a large portion of its fleet and invested over a billion and a half dollars in its vessels, terminals and systems. During this same period, BC Ferries has returned $490 million to the people of British Columbia." -Elizabeth Harrison.

Of course, Ms Harrison isn't going to mention that nearly half of that investment was sent to Germany, nor does she mention the yearly subsidy of $125-$150 million, from the BC taxpayers. All of which has some bearing on this mysterious booty BC Ferries has apparently given back to us.

I wonder just how much of the report the media has actually read. Yes, the salaries are excessive, and David Hahn's somewhat belligerent response was predictable. But this report also criticized the very setup of BC Ferries, and remarked how the financial bottom line trumps any question of the public service aspect of our ferry system. That, really, is a much more important issue than whether David Hahn is paid a million or half a million dollars. If all the focus is on salaries and bonuses, the Liberals, once again, will be off the hook for their overall responsibility for turning a public utility into a phony baloney 'private' company that is not in tune with the wellbeing of coastal communities.
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Re: Provincial review of BCFS & TransLink
« Reply #33 on Nov 10, 2009, 10:41am »
....and no one has commented on the cool photo of the Coastal-Class ferry on the report's front-page. ;D
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Re: Provincial review of BCFS & TransLink
« Reply #34 on Nov 10, 2009, 7:32pm »
Here's Brian Burke's response. Oops, I mean David Hahn.


Quote:
It’s a good thing David Hahn waited several days before speaking out.

Who knows what the president of BC Ferries might have said last Friday after the release of a report that concluded he and other top ferry officials are paid too much?

As it was, Hahn started off an interview by saying he had to be careful. Then he unloaded on the B.C. comptroller-general’s report anyway, variously referring to findings and recommendations as “biased,” “nonsense,” “craziness,” and “dumb.”

“Other than that, I have no opinion,” he joked at one point.

Hahn even objected to the part where comptroller-general Cheryl Wenezenki-Yolland stated that, compensation aside, the quasi-private company was reasonably well-managed.

“I’d probably take exception with the word ‘reasonably,’” he said. “I think it’s so much better, it’s night and day.”

Hahn, who earned more than $1 million last year, said he was insulted by the report’s suggestion that he had too much influence over his own compensation. The board decides, not him, he said.

“I’m very unceremoniously thrown out of the room, because that’s how it works,” he said. “And I’m not even quite sure she understands that.”

He also dismissed the report’s suggestion that it was too easy for BC Ferries executives to earn bonuses.

“I kind of chuckled, and thought it was sad at the same time, when she said the targets were easy to achieve,” he said. “Do you think building ships in B.C. and getting that done the right way is easy to achieve? Do you think the on-time performance on the ships or changing the culture of BC Ferries from what it was to what it is, is easy?

“I don’t know. Maybe she never rides the ferries or didn’t ride them a long time ago. But I know from where it was to where it is today, we’ve got a lot to be proud of.”

Hahn said Wenezenki-Yolland “went out of her way” to make the board and executives look bad by noting they had measured their compensation against large private companies — like Coca-Cola Bottling Co. and Nike Canada Ltd. — instead of public sector bodies.

Hahn said the analysis looked at a range of public and private organizations, and BC Ferries landed in the middle of the pack. But he said the comptroller-general played down that fact to make her report more “sensational.”

Wenezenki-Yolland found that Hahn’s compensation was more than double the amount paid top executives at larger public-sector bodies, while board retainers were three to five times higher than those permitted at B.C. Crown corporations.

Hahn also rejected the report’s call for increased accountability and greater separation between the B.C. Ferry Authority and BC Ferries’ board of directors. At present, the authority simply appoints itself to the BC Ferries board, creating what Wenezenki-Yolland called a conflict of interest. She also recommended an expanded role for the B.C. ferry commissioner to protect the public interest.

Hahn said the additional “bureaucracy” would cost an extra $3 million to $5 million a year. “Everybody’s out there looking for ways to be more efficient and effective, and I’m getting a layer here that just is everything we’ve tried to get away from, which . . . it’s just craziness!” Hahn suggested Wenezenki-Yolland was “biased” toward a public-sector model.

© Copyright (c) The Vancouver Sun


http://www.vancouversun.com/entertainmen....090/story.h tml
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Re: Provincial review of BCFS & TransLink
« Reply #35 on Nov 10, 2009, 7:55pm »
BC Ferries dismisses criticisms
Says comptroller general's suggestions 'not efficient' and 'not effective'



BC Ferries top executives are fighting back against suggestions that the president is overpaid and that the ferry corporation is insufficiently accountable.

Ferries president David Hahn and chair Elizabeth Harrison were reacting Monday to a report Friday from provincial Comptroller General Cheryl Wenezenki-Yolland.

Wenezenki-Yolland said Hahn made more than twice as much as executives in other comparable public bodies. His total pay package is about $1 million a year, including bonuses.

The comptroller general also noted that the retainers paid to BC Ferries directors were three to five times higher than comparable levels at Crown corporations.

Hahn told CBC News Monday that he has turned the B.C. ferry system around and suggested his style is not that of a bureaucrat.

"I'm not a public-sector guy. I'm a private-sector individual. I think that was well known by everybody for a long period of time," said Hahn.

"From my perspective, we've made substantial improvements and saved millions and millions of dollars in the process."

Turned down outside offers

Hahn also suggested that he'd been offered jobs elsewhere, and that was another reason his compensation package was so high.

"I was getting a lot of calls, to be perfectly honest, to go somewhere else for a lot more money. But I really do have a passion for BC Ferries and like the job, and they decided that was what was appropriate to retain me," he said.

Hahn was equally blunt about the comptroller general's criticisms of the boards of BC Ferries and the BC Ferry Authority. Wenezenki-Yolland said the way the boards were structured created an inherent conflict of interest.

"I think she's wrong," said Hahn. "The model was set up to get the ferry system out from under the influence, the interference, that was there in the past; that it operate efficiently and effectively in a commercial manner. And all the things she's talking about are not efficient, not effective, and certainly not something that would happen in the private sector."

Harrison said in a statement Monday that BC Ferries had been changed from "a dysfunctional Crown corporation" to what she called, "a sound and progressive commercial enterprise."

She also echoed Hahn's comments that the corporation's success was largely due to its leaving a public-sector mindset behind.

"Since BC Ferries was created as an independent enterprise six years ago, its entire decision-making, policies and practices have been built on a commercial business platform," Harrison said.

Harrison was paid $154,000 over a 12-month period in 2008/2009. Other directors made between $67,000 and $91,000.

Harrison did not address the comptroller general's criticisms of their level of compensation.

Harrison said the BC Ferries board was reviewing Friday's report and would meet with the minister of transportation to discuss it.

-----------------------------------------------------------------------------------

Original article posted at: http://www.cbc.ca/canada/british-columbi....n-harrison.html


Are these people from Egypt? It seems that they are in 'de Nile'.
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Re: Provincial review of BCFS & TransLink
« Reply #36 on Nov 10, 2009, 8:20pm »
Did anyone notice that the above article was from the 'Entertainment' section of the Vancouver Sun?

Here is another piece from the opinion section of that paper's web site....

Leadership worth the price


By Peter R.B. Armstrong, Vancouver Sun

November 10, 2009

As a past BC Ferries board member, I am somewhat dismayed by all the comments about BC Ferries and compensation. First and foremost, BC Ferries is not a Crown corporation.

It was reorganized so as to be able to raise money in the private markets for revitalizing the fleet without making further demands on the government for taxpayer dollars.

We have witnessed what has to be considered a financial turnaround, resulting in a revitalized fleet and a high degree of passenger satisfaction -- all at less cost to the taxpayer. The BC Ferries team has provided that turnaround and, I say, has earned every dollar. By all measures, BC Ferries has achieved the objectives it was given.

People are rankled that David Hahn and some of his executives are receiving compensation that appears excessive when compared to the public sector. Yet I firmly believe B.C. has received great value, that the direction BC Ferries is going in is the right one and that the compensation is fair and reasonable for the jobs performed.

At one time, BC Ferries was unable to attract people who could stand up to political and special-interest-group pressures to buy the wrong equipment, pay way too much as a result of inefficient labour practices and operate based on special-interest pressures, rather than need. The service was terrible and the future for BC Ferries was extremely dim.

Let's not return to the failed past. Let's continue to move forward and have effective management leading BC Ferries.

Peter R.B. Armstrong

Vancouver

© Copyright (c) The Vancouver Sun

Original article can be found at: http://www.vancouversun.com/opinion/Leadership+worth+price/2205004/story.html


Quote:
The service was terrible


Yes, we have gone from a Volkswagen to a Cadillac, right?
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Re: Provincial review of BCFS & TransLink
« Reply #37 on Nov 10, 2009, 10:53pm »
You would think the very fact that they are being reviewed might have instilled a little bit of honest fear in them, and the responses of the top execs might have been a little less defiant in this review, but they seem as confident and unassailable as ever.
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Re: Provincial review of BCFS & TransLink
« Reply #38 on Nov 11, 2009, 12:24am »


Quote:
The service was terrible



This myth seems to grow the more "old BC Ferries" passes into history. I will agree that the government-run BC Ferries was mismanaged and had many problems resulting from government interference, but from a customer point of view, how can someone say the "service was terrible"?

Quality of service starts with the "front-line people". I'm only guessing, but at least 50-60% (probably more) of BC Ferries employees today were around 6 years ago. It's not like they've undergone mid-life refits and become extra-helpful-happy workers that they weren't 6 years ago. To say the service was terrible 6 years ago is an insult to the workers.

This "terrible service" 6 years ago, from what I can recall, had more frequent sailings than today. No canceled Saturday-night/Sunday-morning sailings on Route 30. No canceled 7PM/9PM round trip on Route 2 from Monday to Thursday. I could be wrong, but I seem to recall more willingness on BC Ferries part to put on extra sailings or an unscheduled round trip when necessary. Yes, these things cost extra money and it's probably good to save dollars where it's expedient - but it doesn't result in "better service".

BC Ferries can point to a few new shiny ships and some older ones that have been "renewed". This is good, and an improvement in service. But I think it's wrong to assume that under a different plan or different management, we wouldn't have new ships by now. In any case, we still have breakdowns at bad times just like we've always had.



I'm not going to complain about the current BC Ferries service - in general it's very good and the workers are courteous and competent. A lot of the decisions in the past 6 years have been good. But I don't understand when people point to the past and say how terrible the service was compared to today (and they pull out their own customer satisfaction surveys to try and prove it). From a business/management point of view, maybe the new BC Ferries has improved a lot; from a customer point of view it's improved a little and cost a lot more.
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Re: Provincial review of BCFS & TransLink
« Reply #39 on Nov 17, 2009, 10:56am »
B.C. Ferries' pay targeted by watchdogs

Million-dollar salary puts groups in FOI spotlight
By John Bermingham, The Province

Public watchdog groups want B.C. Ferries to be held accountable after it was revealed that key executives earned millions in salaries and bonuses without telling the public.

Three groups fired off a letter to B.C. Premier Gordon Campbell yesterday, calling for B.C. Ferries to come under freedom-of-information rules. It was penned by the Freedom of Information and Privacy Association, the B.C. Civil Liberties Association and the Canadian Taxpayers Federation.

"When public money is spent for a public purpose, it must be accompanied by a legislated requirement for accountability and transparency," they told Campbell.

The million-dollar salary for ferries CEO David Hahn only came out because of recent changes to federal securities rules.

B.C. Ferries was exempted from freedom-of-information laws in 2003, when it became a quasi-private company.

The provincial comptroller-general has said the government should consider making B.C. Ferries and the B.C. Ferry Authority subject to FOI and privacy rules.

Signatory Michael Vonn, policy director of the B.C. Civil Liberties Association, blamed the provincial government for blocking public access to what's going on.

"The public needs transparency . . . to understand what's happening with their tax dollars," said Vonn.

Darrell Evans, who heads the Freedom of Information and Privacy Association, also signed the letter, saying governments are making more self-serving decisions.

"We lose our grip on how public money is spent," said Evans.

Evans is also concerned that VANOC, which is also exempt from FOI laws, has been spending "an overwhelming tsunami of public money" with no accountability.

Shirley Bond said she will consider all the comptroller-general's recommendations.

"Of course, we're going to consider every one of the recommendations, including the request for FOI to apply," Bond told The Province from Prince George.

A committee is reviewing the FOI legislation and the public has until the end of March to make submissions.

http://www.theprovince.com/news/Ferries+targeted+watchdogs/2231302/story.html
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Re: Provincial review of BCFS & TransLink
« Reply #40 on Nov 17, 2009, 10:57am »
Cut exec wages to save ferries


By Walter Cordery, The Daily NewsNovember 16, 2009



If it hadn't been for changes to the disclosure provisions of the Canadian Security Administrators in Ontario, British Columbians would never have learned of the lucrative compensation given to B.C. Ferries Services Inc. CEO and president David Hahn, his top five administrators and the board of directors for the ferry corporation.

The changes by the Ontario body seemingly prompted outrage by B.C. Transportation Minister Shirley Bond last July.

The CSA reported Hahn's salary, bonuses and benefits at a total of $1,034,680 for the fiscal year ending March 31. Executive vice-presidents Michael Corrigan, Glen Schwartz, Robert Clarke and Capt. Trafford Taylor had compensation packages for the same period that ranged from $485,509 to $561,747.

When told that Hahn earned more than $1 million, Bond said: "I think it is shocking for people to hear that the CEO of B.C. Ferries makes that salary." That revelation has prompted Bond and B.C. Finance Minister Colin Hansen to review what was going on at the ferry corporation and Translink in Greater Vancouver.

That review put the cat among the pigeons and resulted in B.C. Comptroller-General Cheryl Wenezenki-Yolland's recent report.

When the B.C. Liberals revamped B.C. Ferries in 2003 and made it a quasi-private company, they overlooked some important safeguards that could have prevented the criticism stirred by Wenezenki-Yolland.

Under then-Parksville MLA and transportation minister Judith Reid, the Liberals created an authority to own B.C. Ferries Services Inc. on behalf of the government and provide some oversight. The thought behind this was to keep government at arm's length from decision making after the NDP's political interference in the fast ferry debacle.

Unfortunately, people serving on the authority voted themselves on to B.C. Ferries board of directors.

Not only are senior executives and directors paid too much, Wenezenki-Yolland also found the board of directors to be too large.

Bond's predecessor, Kevin Falcon, is on record as saying he was disturbed when the board raised its pay to unheard of heights ($154,000 for the chair, up to $91,000 for part-time directors).

When she looked at how the authority (board members) came up with their remuneration rates, she found another outrage.

They used "benchmark comparators." They compared themselves to the board of directors for lucrative private-sector companies like Coca-Cola, McDonald's and Nike.

More than 90% of the "comparators" were huge private-sector companies, who must compete in the dog-eat-dog private sector.

B.C. Ferries is a virtual monopoly and receives about $125 million a year in a subsidy from B.C. taxpayers called "service fees." "In our view, appropriate comparators for B.C. Ferries would be public-sector monopolies of a similar size," concluded Wenezenki-Yolland.

Directors are getting huge wages and bonuses while ferry riders and the communities that rely on ferry service are getting the shaft.

Just last month, Ferries cut the 7 p.m. sailing from Nanaimo and the corresponding 9 p.m. sailing from Horseshoe Bay.

Since the Liberals have made the changes from Crown corporation status at B.C. Ferries to a quasi-private company, ferry riders and taxpayers are paying more and getting less service.

The subsidy is given to B.C. Ferries to ensure service is maintained on its routes.

The Nanaimo-Horseshoe Bay route makes money but not the evening sailing, so it was cut.

The stated reason for eliminating the sailing last month was to save money.

Wenezenki-Yolland has shown British Columbians another way to save money and that's get rid of the fat cats at B.C. Ferries.
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Re: Provincial review of BCFS & TransLink
« Reply #41 on Nov 18, 2009, 5:33am »
Not BCFS (as is pointed out in the last line), but somewhat relevant given all the controversy over executive compensation.

http://www.cbc.ca/canada/british-columbi....ies-report.html

Many B.C. Crown corporation CEOs paid above 'cap'

B.C.'s auditor general says the government needs to keep a tighter rein on the rules surrounding salaries for Crown corporation executives, over half of whom are paid more than the salary cap set by the government of premier Gordon Campbell.

In a report released Tuesday, John Doyle said 54 per cent of the 24 CEOs make more than the limit because they were in their jobs before the cap was set.

The minister responsible for executive compensation, Moira Stilwell, said the salary cap is a work in progress.

"There are executives in place who are doing great work for the public sector who were there prior to the caps," Stilwell said in Victoria.

"As those positions roll over, those caps will become hard caps. It makes sense that it will take a few years for the policy to become practice."

Top CEO makes $600,000

Doyle's report also showed four crown corporation CEOs making more than $500,000 a year, including the presidents of BC Hydro, the B.C. Securities Commission and Partnerships BC.

At the top of the list is the CEO of the BC Pavilion Corp., Warren Buckley, with total compensation of just under $600,000 a year. The corporation manages the Vancouver Convention Centre and BC Place.

The auditor general doesn't comment on the fairness of the salary levels but said the government must do more to ensure its executive compensation policies are followed.

Doyle said some B.C. Crown corporation CEOs are appointed for indefinite terms and some did not have a clear link between performance targets and executive pay.

His report comes less than two weeks after a report by the province's comptroller general said the $1-million annual salary paid to BC Ferries chief David Hahn is almost double that of most Crown executives.

BC Ferries is a former Crown corporation and, therefore, was not included in Doyle's report.
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Re: Provincial review of BCFS & TransLink
« Reply #42 on Nov 20, 2009, 8:47am »
The Comptroller-General report is a topic in the Legislature.

Good to see Mr. Coons asking questions about it and the FOI issue.


Quote:
Bond kept on hot seat over pay at B.C. Ferries

Lindsay Kines
Times Colonist
Friday, November 20, 2009

Transportation Minister Shirley Bond still won't commit to improved transparency at B.C. Ferries despite a report criticizing the company's executive pay packages and lack of accountability.

Under questioning in the legislature yesterday, Bond would only say that government will consider each of the comptroller general's recommendations -- including that B.C. Ferries be subject to Freedom of Information law.

"We asked the comptroller general for advice, and we intend to review every recommendation," she said.

The Opposition, however, accused Bond of "stalling" and blamed the lack of transparency at B.C. Ferries for the fact David Hahn earned $1 million last year -- more than double the amount paid top executives at larger public sector bodies.

"It was this premier that gave B.C. Ferries a green light to excessively spend and to operate in secret by exempting them from FOI," NDP critic Gary Coons said. "This premier created this B.C. Ferries gone wild with no accountability and no scrutiny."

The Liberal government shielded B.C. Ferries from freedom of information law six years ago when the company switched from a Crown to a quasi-private corporation. As a result, executive salaries remained a secret -- even though taxpayers subsidize the company by more than $100 million a year.

Hahn's compensation only surfaced this summer because of changes to federal securities laws that obliged the company to disclose compensation amounts.

At the time, Bond called Hahn's compensation level "shocking" and ordered a review by the comptroller general.

Coons said Bond could avoid such shocks in the future by forcing B.C. Ferries to obey open records rules. "This government is stalling, hoping the issue will go away," he said. "It was a mistake to hide B.C. Ferries from the public."

The B.C. Freedom of Information and Privacy Association, B.C. Civil Liberties Association, and the Canadian Taxpayers Federation also have urged government to bring the ferry company back under FOI law.

lkines@tc.canwest.com
© The Victoria Times Colonist 2009


http://www2.canada.com/nanaimodailynews/news/story.html?id=2245263
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Re: Provincial review of BCFS & TransLink
« Reply #43 on Dec 4, 2009, 9:16pm »
Patrick Brown of Island Tides writes an article in response to the Comptroller-General's report:

http://www.islandtides.com/assets/IslandTides.pdf


Quote:
Minister considers, then ignores, first ferry report
recommendation
~ Patrick Brown

Responding to questions in the legislature on November 19 about the BC Comptroller-General’s October report on the governance of BC Ferries, Minister of Transportation and Infrastructure Shirley Bond said, ‘We’ve made a commitment to consider every single one of the recommendations seriously.’ However, having presumably done so, she has reappointed at least one of the directors of the BC Ferry Authority to both the Authority and the Board of Directors of BC Ferry Services Inc, despite the report’s finding that such double appointments represented a clear conflict of interest, and prevented the Authority exercising oversight over the corporation. It is not clear whether the minister has considered the other recommendations that were made.

The report, which covered both BC Ferries and TransLink, was released on October 30.

The review was initiated when the government was embarrassed by the news that David Hahn, the CEO of BC Ferry Services Inc (BCFS), the ‘privatized’ but still government-owned ferry corporation, turned out to be making more than a million dollars a year in salary, bonuses, and other perks.

Comptroller-General Cheryl Wenezeki-Yolland (‘the C-G’) was asked to review both ‘independent service delivery models’ to ensure that the government was receiving value for money, and to determine whether the objectives of each structure were being achieved.

She confirmed that compensation for directors and executives was severely out of line for comparable public sector organizations, but that otherwise, the ferry system was well run.

However, she noted that the responsibility for protecting customers’ interests had never been specifically assigned to any part of the structure, and recommended that the role of the Ferry Commissioner be expanded to include this, and that the Commission’s oversight of fare levels be expanded to include reservation fees and other revenue sources, particularly for services (such as drop-trailer transport) which face private sector competition.

She also emphasized the need for both BCFS and the Commission to make more cost information (including executive compensation) public, and to end the BCFS exemption from the Freedom of Information Act. She recommended that service levels for each route be re-evaluated, with public input, and suggested strongly that the search for alternative service providers, mandated by the Coastal Ferry Act, be abandoned (‘…not a practical expectation.’)


Compensation Criticized

The C-G’s investigation revealed that BCFS CEO David Hahn’s compensation totaled more than double that of the CEOs of BC Hydro, BC Lottery, WorkSafe BC, ICBC, and other large public sector monopoly organizations. Other senior executives and board members were also shown to be receiving much higher remuneration than equivalent public sector officials. A significant part of executive compensation was bonuses; the report commented that qualifying for 100% of a potential bonus seemed ‘easier than we would have expected.’


Separating the Authority and the BCFS Board

The original governance arrangement, set up under the Coastal Ferry Act, saw the single share of BCFS held by the BC Ferry Authority, an organization that consisted solely of a government-appointed nine-member board of directors, with no staff of its own.

Initially, these same nine members were de facto appointed to be the first temporary board of BCFS. However, this arrangement was continued with the result that Authority directors currently hold a majority of 9 on the 13-member BCFS board; the practise that the C-G strongly criticized.

As noted above, the report recommends strongly that the Authority be completely separated from the Board of BCFS, and start to fulfil the duty of shareholders, which is to provide oversight to the BCFS Board. The point was specifically made that this would lead to nine vacancies on the BCFS Board, which should be filled by individuals with the mixture of skills necessary to direct the company and provide oversight to the senior executives; it was suggested that between 9 and 11 Board members would be sufficient. It is also recommended that the CEO should no longer be a voting member of the BCFS Board.


Enlarge the Responsibilities of the Commissioner

The BC Ferry Commission was created, first and foremost, ‘to prioritize the financial sustainability of the ferry operator’; that is, to ensure that it is profitable enough so that it could borrow money on the private market to cover the capital costs of renewing the fleet. (According to the report, interest costs on BCFS’ $1.4 billion debt are approximately 1.25% higher than the costs of the government’s own borrowing, a total of some $14 million annually.)

The report recommends that the responsibilities of the Commissioner be enlarged to include protecting the interest of customers, since the present structure includes no independent body with this responsibility. This clearly includes input from customers about minimizing fares; the report comments that the Coastal Ferry Act objective of shifting costs to users appears to oppose this objective.

The result of some of these provisions of the Act has been, says the report, a ‘narrow view’ of the Commission’s responsibilities. The report recommends that the Commission should take a longer term view, express it publicly, and not just limit itself to confirming BCFS’ compliance with the contract for the current four-year term. It should review cost allocation, particularly on a route-by-route basis, and make the figures public.

It was also suggested that the Commission could comment on the operation of the Authority, thus bringing the oversight full circle. Finally, it should increase the opportunity for public comment.

The Commission presently has a part-time Commissioner and Deputy Commissioner, and a budget for consultants. The proposed increased responsibilities would require that it be enlarged; but it would also become the Commission overseeing TransLink.

The Deputy Commissioner, the C-G commented, was a brother of one of the BCFS directors; this might give the appearance of conflict, although no conflict was alleged.

Productivity

The report defined ‘productivity’ in terms of ferry capacity utilization: ‘On average, the ferries run only half full.’ Percentages of capacity quoted were: Major cross—strait routes: 64%; Horseshoe Bay—Langdale: 56%; Minor routes— 42%; and Northern routes—66%

There are, of course, many factors that contribute to these figures—it is obviously easier to manage capacity when there are large population centres at both ends of a route; the size and number of vessels used obviously affects their percentage utilization, some routes (like the Southern Gulf Islands) serve a number of destinations with different customer travel patterns, and the need to return vessels to their homeports for fuelling or crew changes may lead to ‘dead-head’ runs at the end of a shift. And fare levels affect ridership too.

(It might be better to measure productivity in terms of whether customer needs for transportation services at an affordable price were satisfied, rather than whether the vessels run full.)

The C-G suggested a comprehensive reevaluation of ‘service levels’, which are set by the service contract between BCFS and the Ministry of Transportation. She recommended the Commission’s involvement, and significant opportunity for public input.


Reaction

So far, the report has received favourable responses from both the ‘Save Our Ferries’ group, who referred to their document ‘Course Correction, Putting BC Ferries Back on Track’, and the Ferry Advisory Committee Chairs, who applauded the report’s recommendation that the focus on the financial sustainability of the operator ‘needs to be balanced with the interests of users of the ferry system, local communities and taxpayers.’ Both organizations complimented the C-G for listening to their ideas.

But BC Ferries’ CEO, David Hahn, was reported as saying that the report was biased towards a ‘public sector mindset.’ He was also reported as calling parts of it as ‘biased’, ‘craziness’, and ‘dumb’. He estimated that the additional ferry commissioner oversight recommended by the C–G would cost an extra $3-5 million per year.

A joint release by the Canadian Taxpayers Federation, the BC Freedom of Information and Privacy Association, and the BC Civil Liberties Association applauded the report’s recommendation that BC Ferries be once again be made subject to the Freedom of Information and Protection of Privacy Act—as it was before 2003.

BCFS’ Board Chair Elizabeth Harrison issued a statement: ‘I am extremely proud of BC Ferries’ accomplishments since 2003.’ She went on to credit ‘…independence from political interference, strong Board and management leadership, independent financial borrowing capability and sound commercial business practices.’ She made no comment on any of the Comptroller-General’s recommendations, but said the Board is reviewing the report and undertook to meet with the Minister ‘…once a suitable time can be arranged.’
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Re: Provincial review of BCFS & TransLink
« Reply #44 on Dec 6, 2009, 7:46pm »
"We are a big player in the B.C. economy both in helping it grow and with what we spend and generate each year," said B.C. Ferries CEO David Hahn.

He is pleased with the direction he has steered since he took the helm of the ferry corporation after the B.C. government restructured it into a private company in 2003.

"If B.C. Ferries was still a crown corporation, you would not have seven new ships that were delivered in 30 months at $25 million under budget," he said. "The only one that was late was the one built in B.C. We wouldn't have the fleet cleaned up the way it is. We wouldn't have, and this might not sound important, the washrooms cleaned up. I think we've restored pride in B.C. Ferries and also for our own employees."

-David Hahn.
-----------------------------------------------------------------

Is there anything that David Hahn and the BC Ferry Services execs won't take credit for? Now they're telling us that privatization is responsible for the state of the washrooms, which apparently were filthy back in the days when cleaning staff were working for a -yuck- public employer.

We've heard Hahn credit on time reliability, terminal upgrades, employee morale, community relations, fiscal responsibility... virtually everything that he sees to be right about BC Ferries- to the new corporate structure of the system, and to the excellent work of management. Apparently, BC Ferries was an absolute mess before he came along, a financial sinkhole of mismanagement and decrepit ships, and hardly able to sail the Mill Bay from one side of Saanich Inlet to the other.

He's made much of the fact that since 2003, seven vessels have been added to a fleet which he said had been severely neglected. Those seven vessels represent less than 20% of the fleet total, and even that figure includes the Northern Expedition, which may not have been ordered if the Queen of The North hadn't sunk, and it also includes the marginally needed Kuper, not strictly a newbuild. Of the eleven major vessels on BC Ferries' four major routes, only three were replaced. The other eight are expected to be serving at least into the early 2020s. The Tenaka was scheduled to be the next retiree, but a recent extensive refit has cancelled that, and now there are no plans for any immediate fleet changes.

So, does less than 20% renewal in six years suggest a fleet that was falling apart, and rescued only by the dynamic new privateers? Hardly. All of Hahn's assertions are based on a comparison with a fictional alternative where no improvements would have been made. He assumes a truly public model would have let things slide into oblivion, and next to that scenario, everything the private company has done looks pretty good.

The setting up of BC Ferry Services Inc. was one of the most partisan political ventures the Liberal government has engaged in. It involved the repudiation of the notion that an essential public utility like BC Ferries could be publicly run. The Campbell government has invested a tremendous amount of political capital in this privatization project, to the extent that at every turn they , and the execs they installed at the ferries helm, feel obliged to construct a story where every last detail points to the wisdom of what they’ve created. The story is re-inforced at every launching and every media opportunity, often with very dubious supporting evidence.

Once in a while, an inconveniently contrary voice is raised, and then it’s time for damage control. The comptroller general criticized the very structure of the whole ferries set-up for it’s lack of accountability to users and dependent communities. She pointed out fat salaries, cozy appointment protocols, and questioned BC Ferries long term debt servicing and capital costs capabilities. To which David Hahn basically bristled, blustered, and repeated once again how wonderful things were under the current regime compared to the bad old days, and what did a civil servant know about running ferries anyway. We haven’t heard much from the government, who are probably regretting that they ever unleashed such a loose cannon as Ms. Wenezenki-Yolland on their sacred cow.

To be fair, it has to be conceded that within the boundaries of the ‘mission’ the Campbell government set out for it, Hahn and his team have done a pretty good job with BC Ferries. Thanks partly to ruthless fare increases, the company recovers about 80% of it’s expenses before subsidies. Its credit rating is high, and concerns about debt and future capital costs are not universally shared. David Hahn, at times, seems to employ a candour that’s refreshing in an age of corporate prevarication and bafflegab. At times, being the operative phrase.

Still, the hubris displayed by the current BC Ferries executive, through their desire to take credit for every completed sailing and every tidy washroom, gets almost comical at times. Next time you’re in the loo and you’re marvelling at the lack of pee sprinkles on the seat, take comfort in the fact that David Hahn was in there just before you with a mop and bucket, keeping everything shipshape.
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Re: Provincial review of BCFS & TransLink
« Reply #45 on Dec 6, 2009, 8:21pm »

Dec 6, 2009, 7:46pm, Neil wrote:
Next time you’re in the loo and you’re marveling at the lack of pee sprinkles on the seat, take comfort in the fact that David Hahn was in there just before you with a mop and bucket, keeping everything shipshape.


Let me know when Mr. Hahn will be taking the Route-40 Queen of Chilliwack. I'm taking that sailing!

ps: Wasn't "bafflegab" a character in a Harry Potter book?
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