Troubles at the Trough: Quesnel Councillor Paull asks some tough questions of Mayor Sjostrom's spending habits

Troubles at the Trough: Quesnel Councillor Paull asks some tough questions of Mayor Sjostrom's spending habits




For some time, I have resisted growing public pressure to weigh in on the thorny issue of the mayor’s expenses, but the city auditor’s letter was the proverbial straw that has raised more questions than answers. Was the auditor instructed to adjudicate only the paper trail and not the eligibility and propriety of some of the mayor’s expenses? Why didn’t his opinion go beyond simply saying that all the paperwork is in order? Why, in spite of saying in his letter that he conducted a “review of the overall purpose of the supporting documentation” did he not say (or at least politely hint) that some of those expenses were clearly not eligible to have been claimed?  Is he not aware that certain of those expenses are not eligible for reimbursement because under the Canada Income Tax Act, all local government elected officials receive a large portion (in our case it is one third) of their pay as an expense allowance. The City’s Council Indemnity Bylaw No. 1385 of 1997 says, in part “….provide for the payment of an annual indemnity to the Mayor and councillors of the City …., a part of which may be an allowance for expenses incidental to their duties”. In the body of the bylaw, Section 3  states “One-third of such annual indemnity amounts paid to each member of Council shall be paid as an allowance for expenses incidental to the discharge of his or her office.”  That language is repeated in the Council Policy for Council Remuneration.

Our expense allowance is not part of our pay, and is not taxable, which adds even more end value to the one third expense allowance. We are all well compensated for our out-of-pocket expenses.  Wouldn’t a salesman or any other business person just love to be granted the equivalent of one third of his or her earnings as a tax-free expense allowance?

Last week, I booked a one hour appointment with staff to view the files that accompany forty some odd expense cheques issued to the mayor.  I was surprised at the mountain of paperwork that confronted me. In fact, after spending an hour-and-a-half, I managed to get through about only a third of it.  I believe my opinions of the findings are based on a solid foundation of knowledge gained from over twenty four years as a senior staff member at City Hall, followed by nine years as a councillor. I have also had the benefit of some pretty knowledgeable and experienced tax advisors.  My brief and incomplete inspection of the files was enough to provoke several more questions that need to be asked…

    •    Why were some questionable forms of receipts accepted by staff?  Why do some receipts consist of only an Interact receipt, which should not be eligible to take the place of a proper receipt? Why were yet other “receipts” which were hand written on what appeared to be part of a napkin approved?

    •    Why was a claim that apparently included a meal for the mayor’s spouse approved?

    •    Why was a small claim for $8.46 for a Diet Coke, a bag of Hickory Sticks snack food and a what appears to be a magazine approved, as opposed to being covered under the daily $25 “incidental expense” allowance as provided by the City?  Also, how much did it cost taxpayers to have staff process such a frivolous claim?

    •     Why is it possible to bypass and be paid more than the set allowance for a local restaurant lunch by simply submitting a receipt for that lunch instead of claiming the lower set allowance on the proper expense claim form? More importantly, why wasn’t that lunch, and many other lunches for that matter, paid for from the one third tax free expense allowance?

    •    Why was a Blackberry cover approved as a claimable expense?  Each of us, including the mayor, receive a generous fifty dollar monthly technology allowance to cover costs for our personal cell phone, home fax machine, home computer, laptop, home office supplies and  home internet service (we must have internet to access our electronic agendas).  

    •    Does the shopping done by the mayor contravene the City’s purchasing policy in that the need for purchase orders is apparently bypassed?   

    •    Why are gifts of chocolates, pedicures and other treats for staff and others from an elected official not paid from that elected official’s one third tax-free expense allowance, rather being charged to the taxpayer twice? Further, are some employees more equal or more deserving of gifts and treats than others?  

    •    Why does the mayor apparently prefer to travel by private taxi as opposed to the much more economical, (albeit humble) hotel shuttle or transit, Airporter or Canada Line? This is contrary to our travel policy that requests that we use the most economical means of commercial transportation possible. In fact, if we choose to take our personal vehicle on an approved trip, we are paid the fifty cents per kilometre or the airfare equivalent, whichever is the lesser.

    •    Why does the mayor betray our own “shop local” campaign by shopping for the City stuff (as evidenced by receipts) at Costco, London Drugs, Home Depot and other out-of-town stores?

At the risk of being labelled picky, petty and/or political, my brief and incomplete review of the files raises further bothersome questions that need to be asked…

    •    Why does it appear that some elected and appointed officials, and perhaps even our paid professional auditors, are ignorant of, seem not understand, or perhaps choose to ignore the purpose of the one-third tax fee expense allowance provided by Canada Revenue Agency (the Federal Government)?  In Quesnel’s case this one third tax free expense allowance is upwards of about $15000.00 annually or $1250.00 a month for the mayor and about $3960 annually for us councillors.  Let’s not forget that the mayor is also paid by the Cariboo Regional District, so I believe that one third of her CRD stipend provides her with yet another tax free expense allowance.  I have reviewed Interpretation Bulletins and SubSection 81(3) from the federal Income Tax Act that explains that this one third tax free expense allowance is an allowance for expenses and not compensation for our service to the taxpayers.  It is very clear… two thirds of our stipend is pay, and one third is to cover expenses incurred in carrying out our duties in the community.

    •    Why does the mayor not see, or perhaps choose not to see the line that separates duties and responsibilities of elected officials from paid staff? Ergo… why doesn’t staff do the shopping?  

    •    Is the mayor too overbearing and does she intimidate staff by pushing the limits on allowable expenses, such as, for example, her $200 windshield claim, which is not provided for under our vehicle expense policy? The fifty cents per kilometre is intended to cover ALL incidental expenses for the vehicle. In fact, our corporate travel policy clearly states “The rate per kilometre includes all risk associated with property damage and loss of safe driving discount.”  Did staff approve the windshield claim free of any coercion or political interference?

    •    Was the City’s release of information sought by Councillor Thapar, Finance Committee Chair, resisted and delayed as long as possible because of its potentially revealing content?

    •    Would an independent auditor, who was not paid by the City, have arrived at the same conclusions?

    •    Does all this uncertainty and ignorance around expense allowances point to the need for education for elected and appointed local government officials and auditors? Does it point to the need for a Municipal Auditor General as proposed by Premier Christy Clark? What is the real reason why the mayor seems to oppose the idea of a Municipal Auditor General?

    •    Who directed the City manager to submit the auditor’s letter to the editor? Isn’t that letter the property of the City, not to be arbitrarily sent off as a letter to the editor?

    •    Just what does the mayor think her approximately $15,000 tax free expense allowance is for?  As an upcoming president of the UBCM (Union of BC Municipalities), wouldn’t it be a good idea for her to introduce a convention workshop titled “Expense Allowances 101” to correct what appears to be a broad ignorance of the rules among politicians, bureaucrats and paid auditors.

And finally… in spite of Finance Committee chair Thapar being a bit hard to understand, often annoyingly repetitive and a bit like a bull in a china shop when it comes to tack and diplomacy, was he right? Under all his warts and foibles, I think so.

As I said at the outset, I am reluctant to send this letter to you, Madam Editor, but it seems that letters to the editor is the new communications strategy around City Hall, as is evidenced by the latest missive launched by the City Manager. My apologies to our staff spin doctor, Matt!

Let’s all learn and follow the rules and get on with the people’s business, as we were elected to do!
Ron Paull
Quesnel City Councillor