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Muni admits mistake in consultant costs

Service review over budget and $40,000 more than officially stated



Public pressure to uncover the true costs for the consultant who did the municipal service review has revealed the price tag for the project is much higher than initially reported by municipal hall.

Late Friday afternoon the municipality confirmed the consultants' fees were $126,868, up almost $40,000 from the figure municipal officials insisted was correct in early December.

At that time, the municipality requested Pique run a clarification to its initial story, reiterating that the review cost $88,520 and was not in fact over budget.

When pressed on the numbers in the ensuing weeks, and in the face of a telling Freedom of Information (FOI) document obtained by a member of the public, the municipality found a $40,000 error and admitted its mistake this week.

"It appears that a mistake was made as to the identification of the costs of that service review and on behalf of the municipal hall I apologize for the fact that the mistake was made," said Mayor Nancy Wilhelm-Morden, speaking this week after a morning ski on Whistler Mountain.

"I don't know how it was made nor do I know how it was discovered. I've asked those questions."

And she intends to find out the answers.

It's a sticky situation she has inherited from the previous council, who commissioned the review and presented its findings at one of its last meetings before the November election.

The service review morphed out of what was supposed to be a $30,000 organizational assessment at the municipality, begun in 2010.

At that time, the municipality put out a Request For Proposals to four companies, looking for a consultant to do the work.

"It didn't go out as a tender. No," said municipal communications manager Michele Comeau, adding that it's common practice to go out and seek bids from qualified consultants.

Kelowna's Neilson-Welch Consulting Inc., consultants to government, was given the contract.

The original organizational assessment cost $21,715, but council of the day decided a more in-depth study of the hall was needed in its quest to find savings and balance the books. It approved a $60,000 budget at a closed doors meeting for Neilson-Welch to do a service review, bringing the total budget to $90,000.

Over 2011 the service review examined the three biggest departments at municipal hall, Community Life, Environmental Services and Parks Operations.

It found $1.1 million by cutting budgets to youth programming, reducing service levels, eliminating staff positions and increasing fees.

When asked in early December if he thought it was good value for money, then Mayor Ken Melamed, who believed the review cost $88,000, said:

"I do. Obviously the results speak for themselves. There's over $1.1 million in ongoing annual reductions to the operating budget."

The final bill, which it seems nobody at the RMOW was aware of until repeated requests to clarify the information, turned out to be well over budget at $126,868.

Kevin Rea, who submitted the FOI request that helped uncover the mistake and ultimately the true cost, said he did so because he was concerned about the budget.

"I had attended the council meeting where the review was presented initially and had heard the response from mayor and council that the cost of the review was not being divulged and that good value for the money spent had been obtained," said Rea, in mid December with the FOI report in hand whose totals did not match the official tally at the RMOW.

"That raised a flag in my mind that potentially it had been an expensive consultation."

Not content at the initial FOI information, Rea continued to press for copies of the consultants' invoices.

Those invoices show a breakdown not only of the professional fees for the review, but also the expenses including at least 18 trips from Kelowna to Whistler over the year at a cost of $715 per trip. Several hotel rooms are also part of the bills.

The invoices also revealed that the numbers on paper were not jiving with the official numbers released publicly.

Pique then asked the RMOW to explain the discrepancy. Two days later Comeau admitted there had been a mistake.

"We made a mistake," she said simply.

"The figure that was originally reported was an error.

"It certainly wasn't intentional."

When asked if this calls into question other financial information released by the RMOW, Comeau said that the details of the costs are public information and would be included in the annual Statement of Financial Information (SOFI) report, which lists employee salaries as well as an alphabetical tally of suppliers and what they're paid.

The 2011 SOFI report will not be available until the end of June.

The 2010 report shows Neilson-Welch Consulting billed the Resort Municipality of Whistler (RMOW) $47,502. In 2009 the company billed $53,317. And in 2008 it was $43,308.

The service review was met with high praise from the previous council when CAO Mike Furey presented the findings in mid-October.

Since then, as the true cost of the review has come to light and the details of the cuts become more apparent, it is meeting more criticism than praise.

"I'm not terribly impressed with it, quite frankly," said Wilhelm-Morden of the review, highlighting the fact that of the $1.1 million "found" in savings, about a quarter of a million dollars of that is from increased fees.

"I don't know how you call increased fees 'savings'," she said.

"I don't understand that language."

With the three biggest departments now reviewed, there is about 13 per cent of the RMOW left to examine in terms of finding ways to reduce expenditures and focus on core services.

"Certainly we're going to be looking at the operation of municipal hall, particularly in the context of budget preparation," said the mayor. "Are we retaining a consultant to go forward with some additional organizational review? No."

When asked if this $40,000 mistake calls into question other budget numbers released by the municipality, Wilhelm-Morden said: "I hope not."