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Finance official offers fixes for troubles at Ferries, TransLink

TransLink directors should have acted earlier to avoid ongoing deficits, B.C. Ferry Services Inc. is paying its executives more than double the going rate for heads of larger public bodies and the government should consider forming a Transportation Commission to oversee both, according to a finance ministry report released today.

“In both organizations, the governance models should be strengthened to ensure that they meet their public service mandates while protecting the interests of users and taxpayers,” comptroller general Cheryl Wenezenki-Yolland's 97-page report said. “We have proposed a common governance framework that requires more accountability from the companies and their Boards, stronger oversight by the groups who are effectively the operating companies' shareholders, and stronger roles for the Commissions.”

The report identified specific concerns and recommendations for each organization.

B.C. Ferries' operations have been managed well since the current quasi-private structure was created six years ago, the report said, but there are problems with accountability.

“BCFS executive compensation was significantly higher than that paid by several larger public sector entities,” it said. “For example, the Chief Executive Officer's (CEO) total 2008/09 compensation was more than double that of the larger public sector comparators. We also found that the performance measures and targets used to determine the incentive bonuses for executives' made the bonuses easier to attain than we would have expected.”

The board is also paid more than expected, the report said. “The retainer fee portion, which was most of the remuneration, was three to five times higher than permitted under a Treasury Board directive governing BC Crown Corporation Board compensation (although BCFS is not obligated to abide by TB directives because it is not a Crown Corporation).”

The report recommended making the ferry services board independent of the B.C. Ferry Authority Board. Currently the nine members of the authority board are also on the ferry services board. It also said the B.C. Ferry Commissioner should be given more power to focus “on the sustainability of the coastal ferry system, balancing the financial sustainability of the system with the needs of customers, the operators and the communities.”

B.C. Ferries should also be covered by the government's freedom of information legislation, it said.

Over at TransLink there are likely to be “substantial operating deficits” starting in 2010, the report said, due to “Inaction by TransLink and the Mayors‟ Council to maintain a balance between expenses and revenues.”

There needs to be more certainty about roles and responsibilities in the two-year old governance structure, it said. There needs to be a way to determine shared priorities and action should have been taken earlier to contain costs, it said.

TransLink President Tom Prendergast resigned yesterday to take a job running New York City's transit authority.

Andrew MacLeod is The Tyee’s Legislative Bureau Chief in Victoria. Reach him here.

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