CAO’S vacation schedule, rate of pay come under scrutiny


CAO Mike Phipps

CAO Mike Phipps

By Ron Giofu

CAO Mike Phipps is defending his current vacation and the rate of pay he is making, stating council knew all of this information the day he was hired.

Phipps stated he is actually a consultant being paid on an hourly basis and not a salaried CAO that most other communities have.

“I am to provide the services normally expected of a CAO, the same as did (former acting CAO) Joe Levack,” said Phipps. “With respect to benefits, I don’t get those or anything else.”

Phipps said he is currently in Florida but stated he will be back for the Jan. 20 council meeting.

“I will work until about Feb. 20 and then will return to Florida until around March 24,” he said. “Dean Collver is the acting CAO in my absence. Under the current weather circumstances, Dean and the staff have done a wonderful job ensuring the safety of the public in very difficult circumstances.”

The town is only being billed for work he does on behalf of the town, he said.

“As council was told , while in Florida, if I am working on e-mail or files I have with me – such as all the budget files – I will bill the town,” he said. “However, if I’m golfing, shopping, at the pool with the grandchildren, there is not billing.”

According to Phipps, when he first met with council back in mid-June, he explained his situation and that he had his Florida rental paid in advance.

“Council was fine with that despite what some now say,” he said. Phipps added “it has only been since then, particularly the last two months, that we have uncovered the depth of the financial issues facing the town. I realized when I agreed to come to Amherstburg that there were problems, but I did not understand the depth of those problems, including financial challenges. I did not realize the strength of these challenges until delving into the 2014 budget process. I now realize that there have been significant financial issues created that could have been avoided with proper financial controls. We’ve identified the problems and now must develop the solutions.”

With regards to his rate of pay, Phipps noted the average CAO earns about $150,000 per year.

“I am told the benefit, etc. burden on any salary in the municipal field in this day and age is about 33 per cent. Therefore, a CAO earning $150,000 in pay actually costs the municipality at least $200,000,” Phipps said, “so that’s the number I worked from when calculating my hourly rate.”

Phipps said he assumed when he accepted the position that he would work about 42.5 hours per week or 170 hours per month. “So if you take the 170 hours per month it becomes 2,040 hrs per year. At $87.50 per hr, this results in an annual payment of $178,500,” he said.

HST on this amount brings it up to the $200,000 range, but Phipps added but “council is rebated most of the HST.”

“In addition, I knew that I would need to be the face of the organization and be into the office early and staying late to lead by example,” he continued. “I also knew there would be extra meetings, etc. In order to keep the cost down for the town, I included a reduced amount of $50 per hour for anything above the 170 hours per month. Unfortunately, with all the problems we’ve identified, I’ve had to commit far more hours than anticipated or I ever intended.”

Phipps stated he has been working, on average, over 60 hours per week. “In order to keep the invoices reasonable for 2013, I deferred approximately 39.5 hours each month to be paid at $50 per hour during those periods from January through March in 2014 while I am away for parts of it,” he said. Phipps said the goal is to have a budget ready for the week of Feb. 10.

“There are so many good people in this town that simply want things to improve, but they are the silent majority. I am reminded of a quote from Dr. Martin Luther King when asked about death threats he was receiving prior to going to Selma, Alabama after the murders of three civil rights workers, ‘I am not worried about the noise from my haters. I am more worried about the silence from my supporters.’ That silent majority needs to speak up,” he believed.

Councillor Bart DiPasquale said he didn’t recall any figure of $200,000 being brought forward when Phipps was hired. He recalled Levack going through a verbal report at the time of Phipps’ hire but didn’t recall the $200,000 figure. He did recall being told that hours would be watched closely. DiPasquale said council approved Phipps hire in general terms but only got a copy of his contract “within the last day or so,” he said last Friday morning.

“We weren’t given a copy (of the contract) at the time,” DiPasquale said. “We went by the information we were given.” He believed “some councillors don’t get the same information the other ones do” but said he has what he had been looking for on this matter now. DiPasquale added the town has to move forward to fix its problems.

“We’ve got to put the town back together and we’ve got to work with the best interests of the community at hand,” said DiPasquale. DiPasquale hoped Phipps’ overtime hours could be “cut back” and said he didn’t begrudge Phipps right to have a vacation.

However, with the current financial straits of the town, DiPasquale suggested that he preferred Phipps be closer to town hall while dealing with them.

“I’d like to have the top dog there doing what he’s supposed to be doing,” said DiPasquale.

Councillor John Sutton said when council was seeking a new administrator, there were few applicants that had the qualifications. He said the town went with a more experienced hand in Phipps, signing him to a two-year contract to bridge between the current council and the next council.

“Council was aware of his remuneration,” said Sutton. “No question, this was outlined to us.”

The process of how Phipps is being paid is different but not his duties as CAO, he stated.

“He’s charging us through his consulting company,” he said. “He has all the powers of a CAO. How he bills us is what’s different.”

Sutton said council received the signed contract over the last week, but he compared the situation to when council enters into a development agreement. He said council adopts those agreements but doesn’t necessarily see the final, signed copy. The signed contract with Phipps shows the same terms council agreed upon, Sutton added.

Phipps’ vacation schedule was also outlined, he added, and council will meet with him Jan. 20 for clarification on that and his hours worked while away. Sutton stated it was assumed at the time the budget process would be completed by now and Phipps would not have the workload he does have.

Suggestions some may have about Phipps being paid while enjoying Florida sunshine are “nowhere near the truth,” he added.

“What I think you’ll see and what council should be monitoring, in my opinion, is his hours will decrease and the numbers will balance out,” Sutton believed.

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