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Critics blast MPI 'hiring spree'

Insurer says it's trying to contain costs as rate hike sought

Posted: 06/18/2014 1:00 AM | Comments: 0

Last Modified: 06/18/2014 4:17 PM | Updates

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Under pressure from critics, Manitoba Public Insurance says it is aggressively looking at ways to contain its costs to keep rates as low as possible.

But the Opposition Progressive Conservatives argue that doesn't appear to be the case for the Crown auto insurer's executives.

The PC's MPI critic Kelvin Goertzen said a leaked internal memo sent to MPI staff last week shows it hired a new vice-president and plans to add three new executive positions to better manage its frontline services. Plus, it says a position of vice-president of human resources and chief human resources officer are to be posted in the near term.

MPI spokesman Brian Smiley said the memo more accurately reflects a "shuffling of portfolios" among the existing vice-presidents after Dan Guimond was appointed as MPI's new president and CEO following the retirement of Marilyn McLaren earlier this year.

Smiley said there was only one new appointment: Brad Bunko was promoted to vice-president of business transformation, information technology and chief information officer as of May 5.

Goertzen said the "shuffling" was still poorly timed as it came days before MPI submitted its 2015 rate increase to the Public Utilities Board (PUB). MPI says because of the higher number of collisions last winter, it needs an overall rate increase of 3.4 per cent to deal with claims costs and to beef up its rate-stabilization fund.

"I don't think going on a bit of a hiring spree at the same time you're asking for a rate increase from Manitobans is going to give anybody who pays Autopac any sort of assurance that there is cost containment," Goertzen said.

'Quite frankly, I think it takes a little bit of chutzpah that when you're asking for a rate increase you go on a hiring spree'

-- Tory MP Kelvin Goertzen (right). The Tory MPI critic was responding to an MPI request to boost auto insurance rates for Manitoba drivers.

Goertzen said the memo also says MPI plans to add a new deputy registrar and two executive directors.

"I hope this doesn't escape the PUB. They've referenced before the (internal) costs that are going on at MPI and asked the government to gets costs contained. Quite frankly, I think it takes a little bit of chutzpah that when you're asking for a rate increase you go on a hiring spree. Apparently, the cold winter didn't affect any of the executives over at MPI."

In past orders, the PUB has been highly critical of MPI for the way it spends money.

"It is the view of the board that the corporation must control its expenses, and reverse the trend of ongoing growth in expenses over time," the PUB said in a December 2013 order. "The board also has concerns with respect to the corporation's staffing levels, which have continued to increase."

The PUB is to begin hearing evidence of MPI's proposed rate increase this fall. The PUB is expected to make its decision before the end of the year.

Much of MPI's case is filed in three volumes at the PUB and is posted on MPI's website.

In it, MPI says despite the higher number of claims this year, total corporate claims and operating expenses are lower than the year before. It says because of containment measures already undertaken it has seen cost savings -- or cost avoidance -- of $60 million a year.

MPI says those measures include an indefinite hiring freeze (a minimum of 80 full-time positions are unfilled each year), a restriction on out-of-province travel, a restriction on expenses filed by staff for internal meetings and proposed restrictions on discretionary spending on conferences, sponsorships and consultants.

Goertzen said those cost-cutting plans should include executives.

"You'd think the first place you'd be looking to cut costs is the high-end positions," he said. "They're loading up instead of downloading some of these positions. It sort of boggles the mind."

The PCs have recently been critical of MPI for hiring McLaren as a consultant following her retirement Feb. 21.

The Free Press reported McLaren will receive close to $500,000 in compensation from the auto insurer this year. The amount does not include a $50,000 consulting contract with MPI, which was approved by the Selinger cabinet several weeks after her departure.

The Free Press obtained the amount of McLaren's compensation package in a freedom of information request after her consulting contract became an issue in the Manitoba legislature.

Andrew Swan, the minister responsible for the public auto insurer, has said McLaren's experience will be invaluable to MPI in its 2015 rate application.

Meanwhile, the Canadian Automobile Association says the City of Winnipeg shares the blame for MPI rate hikes.

The CAA says winter claims and associated costs could have been reduced if the city had done a better job clearing snow from the streets.

Ice ruts plagued drivers in December and January.

 

-- with files from The Canadian Press

bruce.owen@freepress.mb.ca

Is MPI doing enough to contain costs? Join the conversation in the comments below.

Increase in MPI salaries


The ranks of MPI employees making over $100,000 have more than doubled in just three years. MPI is required to disclose all salaries above $50,000 by provincial law. Here we compare salary figures from 2009 and 2012 (the latest year for which data is available).



In 2012, MPI spent $13.7 million to pay employees making over $100,000, compared to $6.8 million in 2009. Six executives made over $200,000 in 2012, compared to three in 2009. Former president and CEO Marilyn McLaren’s salary jumped by $38,000 in the same time period.

MPI’s highest paid individuals in 2012 were:

Marilyn McLaren, President and Chief Executive Officer, $299,684.50
Ted Hlynsky, Vice President, Claims Control & Safety Operations, 260,344.01
Dan Guimond, Vice President, Strategy & Innovation and CIO, $235,613.14
Ted Teterenko, Director, Urban Service Centre Operations $234,460.53
MaryAnn Kempe, Vice President, Community and Corporate Relations, $219,562.36

Republished from the Winnipeg Free Press print edition June 18, 2014 A4

History

Updated on Wednesday, June 18, 2014 at 10:05 AM CDT: Adds sidebar

4:17 PM: Adds graph and information on MPI salaries

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