COLUMN: TransLink taking steps in the right cost-cutting direction?

Cutting senior executives may be a sign TransLink is doing the right thing – or it may be nothing but window dressing.

Yet another shoe has dropped at TransLink, which continues to be the target of enormous criticism from taxpayers and transit users.

On Tuesday, it was announced that two of its most senior executives had been let go. Doug Kelsey, whose involvement with transit in the region predates TransLink’s creation, was most recently chief operating officer, and also president and CEO of the B.C. Rapid Transit Company. His 2014 salary and other payments totalled $355,000, and his severance is likely to total in the hundreds of thousands, if not into the millions, given how long he has been working with TransLink and its predecessors.

Bob Paddon has been executive vice-president and was one of the most-quoted senior executives, given that part of his responsibility had been media and public relations. His 2014 salary was $299,000.

He was also overseeing long-term planning, which has been thrown out the window by the public’s overwhelming rejection of the plebiscite to back raising the sales tax by 0.5 per cent. The tax increase was proposed to fund transit expansion.

In addition, Doug Allen, who took over as interim CEO in the midst of the plebiscite campaign, has stated he will only be with TransLink for another month. A permanent CEO has not been found, so Cathy McLay, the chief financial officer, will step in as interim CEO.

Former CEO Ian Jarvis remains on the payroll as a consultant, at a salary of close to $400,000 per year.

While the number of executives and their high pay levels have been the cause of much of the anger over TransLink, what this move signals is another era of uncertainty. Kelsey and Paddon were both very experienced and, to the best of my knowledge, were not the cause of significant problems in the organization.

Paddon’s position has apparently been completely eliminated.

The new permanent CEO needs to start work at a lower wage level than Jarvis, Kelsey or Allen have all been pulling in, and take quick and decisive steps towards reducing all executive compensation. If that means people quit, so be it. No one, other than the CEO, should be making more than $200,000.

The new CEO also needs to take a long, hard look at the TransLink Police and see if there is value for money there.

As Jordan Bateman of the Canadian Taxpayers Federation has pointed out, most of them are glorified fare collectors. Most have minimal files to deal with, as compared to their municipal or RCMP counterparts. Yet in 2012, more than one-third of them earned over $100,000 per year.

TransLink does need to cut executive compensation costs. And it also needs to look at its top-heavy corporate structure, payments to members of the various boards of directors, its communications strategies and a lot of other things.

Some of us had expressed hope that Allen was starting to cut through some of the heavy underbrush which has impeded TransLink’s cost efficiency. His candour as CEO has been refreshing.

If Surrey and other South Fraser areas are ever going to get better bus service with the limited sources of funding now available, it must come through a single-minded concentration on cutting costs and spending money wisely.

This may be the first step in that direction, or it may be nothing more than window dressing.

 

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