Stadium on strike

B.C. Place workers on a one-day Jan. 28 strike.

Trying times at B.C. Place Stadium.

Not only has the Auditor General agreed to take a look at the costs of the renovation project.

And not only is a massive lawsuit inching its way toward a 100-day B.C. Supreme Court trial beginning Oct. 21.

But there is labour strife.

For the first time since February 2005, members of the B.C. Government and Service Employees' Union local 1703 are on strike. Albeit, only for one day on Jan. 28.

Local 1703 chair Dave MacDonald was not available for an interview, according to spokeswoman Karen Tankard.

Tankard said the main issue is job security for the 38 full-timers and 460 event workers. (Food and beverage workers are represented by a separate BCGEU local).

"We're out on strike for a fair contract, we have offered the employer informal mediation," Tankard said. "We're hoping to get back to the bargaining table as quickly as possible. Our members want to be inside, doing their jobs.

"There is work that has been going on inside B.C. Place by private contractors that we believe our members should be doing. That is our work."

A strike was averted in fall 2011, when the stadium's rocky reopening occurred. All events went ahead as scheduled, but with increasing participation by contractors, such as Genesis Security, Panther Constructors, Pace Group and Riggit Services. The stadium has also become top-heavy with management.

The one-day strike has minimal impact on B.C. Place operations. The Year of the Snake Chinese New Year Expo begins on Jan. 31, and move-in isn't scheduled until the day before.

According to a statement released by the Pace Group, stadium general manager Howard Crosley said: "We are disappointed at this development in the bargaining process and remain committed to securiing a positive outcome in negotiations with the BCGEU. Our people are an important resource and we hope that ongoing discussions will allow us to reach a solution that meets the needs of both parties. We also have an ongoing commitment to our clients during this time and contingency plans are being developed to minimize disruption to scheduled events."

BCGEU local 1703 has an arm-long list of grievances with stadium management on a variety of fronts. For example, workers were furious last October when management sank their boat cruise with only one day's notice.

That week ended with a mysterious meeting among PavCo minister Rich Coleman, Telus CEO Darren Entwistle and Peter Brown, the BC Liberal Party bagman who quit the PavCo board of directors in February 2012 when the Liberals kiboshed Telus's naming rights sponsorship of the stadium.

The Telus Park sign remains in a Pattison warehouse and talks are underway about resurrecting the deal. In August 2012, Telus and the Liberal government secretly came to a supply-only deal. The government, however, won't tell us how much it paid Telus in compensation for the goods and services supplied.

Coming in 2013, B.C. Place strike?

Is it too early to make predictions for 2013?

Here's one that's pretty safe. Labour strife at B.C. Place Stadium.

The B.C. Government and Service Employees' Union workers reached a settlement in the fall of 2011, meaning labour peace for the 99th Grey Cup. That contract ran out May 31 and negotiations fell apart on Dec. 10. The gap between the two sides is, well, about as big as when the stadium's retractable roof is open (which is, despite the price tag, a rarity).

Here is the notice that was posted on the BCGEU website on Dec. 12. The only two events planned for January are both late in the month: the Maple Leaf Monster Jam and Year of the Snake Chinese New Year Expo. 

BC PAVILION CORPORATION – STRIKE MANDATE REQUIRED  IMPASSE REACHED – STRIKE MANDATE REQUIRED  Bargaining has not been productive. On December 10, 2012 the parties reached impasse. It has become apparent on the twentieth day of bargaining that the parties are not any closer to reaching a tentative agreement. The parties are just too far apart on many issues to look for assistance of a mediator.Your bargaining committee clearly outlined members’ priorities while remaining open and flexible to negotiating specifics. The Committee made it clear that this is not a round of bargaining that would contain any concessions for our membership. We have no choice but to look to the membership to support your bargaining committee and give us a strike mandate to send a clear message to the employer. We are looking for a fair deal, job protection, with no concessions.Please make every effort to get out and vote in support of your bargaining committee's recommendations.  YWCA – Royal Bank Room, 733 Beatty Street, Vancouver:  December 20 from 2:30pm–6:30pm; December 21 from 11:30am–6:30pm; December 26 from 1:00pm–5:00pm; December 27 from 11:30am–6:30pm  Balloting at the BCGEU Lower Mainland and Fraser Valley Area Offices: December 17–21, 2012.  In solidarity,  BC Place Bargaining Committee  Dave MacDonald, Committee Chairperson  Allen Fong, BCM, Nadine Gagnon, BCM, Barry Cameron, BCM Lisa Trolland, Staff Representative

#LiquorLeaks - still pouring

Coleman

In this Nov. 2 Business in Vancouver story, I revealed how the British Columbia government conducted secret consultations with select industry players about the plan to privatize the Liquor Distribution Branch's warehousing and distribution.

The internal documents on which the story is based are below. They are from briefings for Liquor Minister Rich Coleman and then-Finance Minister Kevin Falcon. They show that the government was concerned with the well-being of ContainerWorld, the largest of the pre-distribution warehouses on contract with LDB. ContainerWorld is owned by B.C. Liberal supporter Dennis Chrismas, who met with Coleman on March 2.

Falcon

Chrismas was originally opposed to any change in the liquor distribution system. When bidding opened, ContainerWorld was involved because the privatization would have phased out the pre-distribution program. In this May 29 Business in Vancouver story, I detailed the interesting relationship between ContainerWorld and Exel, the company that lobbied the B.C. Liberals heavily for seven years to privatize. From an observer's point of view, two of the four shortlisted companies may have been too close for comfort.

On page 89 of the documents below, you'll even find that an unidentified person scrawled "Dennis Chrismas." Either Mr. Chrismas's name came up during the ministerial briefing or it was top-of-mind for one of the participants.

The privatization was scrapped Sept. 27 when the government and B.C. Government and Service Employees' Union agreed on a new contract. The premature cancellation was announced the next day. And we still don't know the real reason why.

EGM-2012-00187

Anyone working at the Ministry of Labour?

The British Columbia Government and Service Employees' Union represents more than 25,000 government workers in B.C. and on Sept. 27 it reached a tentative agreement with the government.

The deal was announced the next day by Premier Christy Clark at the Union of B.C. Municipalities' convention in Victoria. It included the immediate corking of the controversial privatization of the Liquor Distribution Branch.

I requested, via Freedom of Information, a copy of the labour accord from the Ministry of Labour. After the Sept. 5 cabinet shuffle, Jobs, Tourism and Investment Minister Pat Bell also became Labour Minister. My request was processed and, on Oct. 29, I received notice that the Ministry of Labour doesn't have a copy of the BCGEU settlement.

Truth is stranger than fiction. See below.

(BCGEU members will be glad to know their union has a copy of the tentative agreement, which can be read here.)

LBR-2012-00040

#LiquorLeaks wonders: who really corked privatization?

The news broke on Sept. 28 at the Union of B.C. Municipalities Convention in Victoria.

Premier Christy Clark, addressing mayors and councillors from throughout the province, revealed that a settlement had been reached in negotiations for a new contract with the B.C. Government and Service Employees' Union.

A one-liner in the news release said:

"As part of the agreement, the Negotiated Request for Proposal process for the privatization of liquor distribution was cancelled."

That's all. No further explanation. The LDB's warehousing and distribution arms would remain publicly owned. The broke BC Liberal government desperate to show a balanced budget in time for the 2013 election dropped the controversial privatization that it stubbornly defended since February.

A stunning turn of events. The bizarre procurement process that unfolded since the April 30 publication of the request for proposals drew comparisons to the bungled 2003 privatization of BC Rail. Three of the bidders' parent companies -- Deutsche Post DHL, Kuehne + Nagel and Schenker -- were caught price-fixing by the European Commission. Two of the bidders -- ContainerWorld and Exel -- had donated to the ruling BC Liberals. One of them -- Exel -- had been lobbying the Liberals for seven years and even contracted party insider Patrick Kinsella, who chaired Clark's 2011 leadership victory. (Kinsella de-registered on March 30, a month before bidding began.)

LDB made a $911.1 million profit on $2.89 billion sales in 2011-2012 and the government never showed any evidence to justify the planned privatization. People across the industry, from hard liquor to craft brewing, said higher costs would be the result of a private monopoly on booze hauling. The burden would be passed on to customers. Exel Logistics' "Project Last Spike" internal memo, dated Oct. 6, 2009, even said so.

Liquor minister Coleman

The very week that the BCGEU returned to talks, shortlisted bidders ContainerWorld, Exel, Kuehne + Nagel and Metro were meeting with the joint LDB/Citizens' Services evaluation committee. The bids were supposed to be refined, completed and considered by the committee. Treasury Board was supposed to approve the committee's recommendation and announce a preferred proponent on Oct. 16.

Walker was savouring the victory. The second time in less than a decade that the BCGEU had thwarted liquor privatization at the bargaining table. But was it so simple? Was the BCGEU solely responsible?

My request to interview Liquor Minister Rich Coleman was refused. Same went for my request to the office of Finance Minister Mike de Jong. His staff sent me this statement:

It became clear in the late stages of negotiation that this was an important element to close the deal. The NRFP remained a significant issue for the BCGEU. The fact that government reconsidered the NRFP shows our commitment reaching a settlement under the Cooperative Gains Mandate.

NDP liquor critic Maurine Karagianis doubts the official version.

NDP critic Karagianis

"They have heard very clearly that it was a bad deal for British Columbians, a bad deal for industry, a bad deal for consumers and they needed a way to get out of it," Karagianis told me, for my Business in Vancouver story on the day.

The day before privatization was kiboshed, the government was still communicating with the public about the merits of the process. A reader provided me a Sept. 27 letter he received via email, from Coleman and copied to Ben Stewart, the Citizens' Services minister. It contains nothing new. All the lines were culled from Coleman's script. Even this gem:

"In order to proceed, government must be satisfied that British Columbia taxpayers will benefit from having a private sector provider warehouse and distribute liquor in the province."

Why did the government send such a letter when it knew or ought to have known the privatization was over or on the death knell? Who put the cork in the privatization bottle? Why?

And why was a copy of the letter sent to Stewart? We were led to believe that Stewart was not going to be involved in this file because of the potential for the appearance of a conflict of interest. He has a blind trust ownership of Kelowna's Quail's Gate Estate Winery, which is a supplier to Alberta's Exel-owned monopoly Connect Logistics and to the B.C. LDB. The 2011-2012 LDB statement of financial information shows LDB paid Quail's Gate $2,273,529.

The privatization is over. For now. The questions? I won't stop asking them.

More #LiquorLeaks to come.

Rich Coleman, Sept. 27, 2012 letter

Exclusive: Stadium sinks staff sea cruise - mutiny to follow?

B.C. Place Stadium has a retractable roof. And an operations budget under apparent restraint. 

General Manager

Just three days after the first anniversary of its reopening from renovation and the day before a scheduled staff appreciation boat cruise, general manager Howard Crosley sank the scheduled excursion. Tickets for staff were $10 each and guests $35. 

On the morning of Oct. 3, staff received the following memo. While many of the workers had reason to talk like a pirate ("arrr"), others took a more humorous strategy. The theme songs to the Love Boat and Gilligan's Island were heard on the in-house walkie-talkie system during the Oct. 3 Vancouver Whitecaps 4-0 win over Chivas U.S.A. 

I'm still waiting for spokesman Duncan Blomfield to respond with comment. B.C. Pavilion Corporation is now under the presidency of Dana Hayden, the former Jobs, Tourism and Innovation deputy minister. Cabinet responsibility was recently shuffled to Rich Coleman, whose portfolio includes energy, mines, natural gas, gambling, liquor and housing. 

This could have been the first salvo fired in what could be a fall of labour strife. Stadium workers, represented by the B.C. Government and Service Employees' Union, are negotiating a new deal. In 2011, they reached an agreement with management and avoided a strike that could have jeopardized the Grey Cup.

Will it be smooth sailing in 2012 or is a course being charted for choppy waters?

To All Staff: 

I know many of you were looking forward to the Staff Appreciation Boat Cruise scheduled for tomorrow, Thursday, October 4th. The response has been very positive; however, due to fiscal constraints and budgetary considerations, unfortunately, it is necessary to cancel the event. We will look at another staff appreciation function to be held at BC Place in the near future. 

We truly appreciate your dedication and apologize for the inconvenience. 

Captain

Skipper

How do you get your ticket refund? 

• Wed Oct 3, before 1600, Admin Office, see Irene. From 1600 to 1730, before your game shift, outside Level 1 Break Room.
• Oct 4 and 5, 0900 to 1700, Admin Office, see Irene
• Sat Oct 6, 1600 to 1730, before your game shift, outside Level 1 Break Room
• Oct 9 onward, 0900 to 1700, Admin Office, see Irene 

Howard Crosley
General Manager

Boessenkool, Burns Lake & Booze: 3 Bombshells

What a week.

Alberta import Ken Boessenkool got pushed/jumped from his job as chief of staff to Premier Christy Clark. Boessenkool submitted his resignation on Sept. 23, the morning after the B.C. Conservatives were licking their wounds after 71% of one-third of the party voted against reviewing John Cummins's lacklustre leadership.

It turns out this was one of those "uh-oh, they noticed, now we've gotta do something" matters. 

Global TV's Jas Johal was tipped-off about Boessenkool getting in trouble at a Victoria pub on Sept. 7 after Liberal caucus members and Press Gallery members had a round of golf in Metchosin. Clark started the week with a press conference where she released Boessenkool's resignation letter, but hid behind privacy laws and would only call it an "incident of concern."

Boessenkool lost his nearly $200,000-a-year gig and, under B.C. government employment rules, he must not lobby the B.C. government for the next year. That could hurt him in the wallet, since Boessenkool was a former Hill and Knowlton executive whose client list included Enbridge, Taser and Merck. 

Boessenkool allegedly got drunk and groped a junior female staffer in the Bard and Banker pub. Clark claimed the Public Service Agency investigated Boessenkool. But in a startling lack of leadership, it was revealed that Clark did not suspend her chief of staff, but instead let him carry on as the ultimate supervisor of the woman who was the alleged victim. 

Instead of giving Boessenkool the heave-ho on Sept. 20, BC Christy heralded the poaching of star third-place Chilliwack 

by-election candidate John Martin from the Conservatives. Politics before people, that's the Clark way. 

The million-dollar question: Why didn't the police become involved in the Boessenkool incident?

Boessenkool was replaced by Dan Doyle, the BC Hydro chairman who was the executive vice-president of construction for VANOC. Doyle was CC'd on the famous March 24, 2009 John Furlong email, revealed by CBC in February 2011, that indicated there were major safety concerns at the Whistler Sliding Centre. 

On Feb. 12, 2010, Georgian luger Nodar Kumaritashvili flew off his sled near the end of his last training run, struck an unpadded pole and died. The track's construction was partly to blame. Almost $2 million more is being pumped in to correct the flaws. 

Furlong under fire for Burns Lake secrets

Vancouver 2010 Olympics chief executive John Furlong wasn't in London for the opening of the 2012 Olympics on July 27. His absence was odd, to say the least. Furlong and London 2012 chairman Sebastian Coe both told me in 2010 how they struck a friendship, as Furlong advised Coe on the ups and downs of running an Olympic organizing committee. Furlong served as VANOC chief executive at the pleasure of Premier Gordon Campbell, now Canada's High Commissioner to the United Kingdom. Campbell told CKNW's Philip Till in July that he hadn't spoken to Furlong for "months." 

On Sept. 27, Furlong was slammed with allegations in the Georgia Straight that he abused students at a Burns Lake, B.C. Catholic elementary school after he came to Canada as a teenager. The RCMP confirmed it is investigating. 

Furlong vehemently denied their claims, which are contained in eight affidavits obtained by Georgia Straight contributor Laura Robinson. He suggested he was the victim of a blackmail attempt. Furlong and his lawyer Marvin Storrow said they would sue for defamation. They refused to answer questions from reporters. 

Furlong, however, conceded that he had actually lived in Burns Lake. He said it was a "brief" and "uneventful" time. That was news to anyone who bought his book, Patriot Hearts, or paid to hear one of his speaking engagements. It was also news to his co-writer, Gary Mason. Furlong's memoir only indicates he arrived in Canada with his wife and two children 

in 1974 at Edmonton and settled in Prince George. 

Odd that an immigrant to Canada would omit any mention of his first impressions of his new country. Also odd that he would use the word "uneventful" to describe a period of his life in which he married his first wife who bore his first two children.

Read more from The Tyee here. 

BCGEU beats Booze Barn bid

And then the third bombshell of the week. The Liquor Distribution Branch privatization was cancelled 220 days since it was announced and 18 days before the successful bidder was scheduled to be announced. 

This one came wrapped by the government inside the new deal for the B.C. Government and Services Employees' Union. BCGEU president Darryl Walker said the prospect of thwarting the government's planned sale of warehousing and distribution came as a surprise to him earlier in the week. Read more in Business in Vancouver here.

The government appears to have made the right choice by putting a cork in the plan. It published no business plan to justify the privatization and conducted no formal industry consultation. The privatization push was driven by the persistence of BC Liberal-allied lobbyists in an environment of a cash-strapped government seeking solutions to balance the budget before the May 14, 2013 election. 

Every step of the way, I discovered more questions than answers. Freedom of Information delays, denials and censorship. And, of course, the minister responsible for liquor, who avoided all my interview requests. 

I have heard from only one bidder so far. ContainerWorld president Dennis Chrismas hired the Liberal-friendly Pace Group public relations company to send out a prepared statement. ContainerWorld opposed privatization at first, but then submitted a bid out of self-preservation. The province's largest pre-distribution warehouse in Richmond would have had an uncertain future if it didn't win the contract because the pre-distribution program was to be phased out. 

I will have more to say in the coming days and weeks. I'm confident there is a story behind this story. 

This had the appearance of another BC Rail-style scandal in the making. 

Starting with the title of the Oct. 6, 2009, internal Exel memo that flipped open the lid on this procurement plonk. 

It was called "Project Last Spike." 

#LiquorLeaks reveals the latest Ask Roger email

This whole liquor logistics privatization, which was announced Feb. 21, has produced more questions than answers. Mainly because it was not accompanied by the publication of a business plan or cost/benefit analysis that would justify the sell-off. Also because of the contents of the intriguing internal Exel Logistics memo that came to light in my Business in Vancouver story on May 8, revealing the leading bidder's deep connections with the ruling BC Liberals and its clever strategies to gain the monopoly.

Roger Bissoondatt, last Movember.

Does a business plan exist? Liquor minister Rich Coleman told NDP critic Shane Simpson in budget estimates that it doesn't, yet. A list provided to me by the Liquor Distribution Branch via Freedom of Information indicates there are several reports that examine the dollars and cents of selling the warehouses and moving the business to a private operators. They don't want me to see the actual reports.

That does not inspire confidence in the process or the people involved. The uncertainty is multiplied for those who work for LDB, who wonder what the future holds under a private operator.

On June 4, two days before he secretly tendered his resignation (and 10 days before it went public on this blog), LDB general manager Jay Chambers invited employees to send him questions by email. He said he would make an effort to answer them. His interim replacement, chief financial officer Roger Bissoondatt (right), has carried on the gimmick.

Highlights of Bissoondatt's Sept. 11 email to employees include: 

• LDB will become a customer of the private warehouser and distributor, but Bissoondatt writes, "until the agreement is signed, we will not know what these delivery costs will be."
• Eighty-three LDB head office employees are retiring in 2012. Those who are displaced from the warehouse under the new operator can bump retail workers with less than three years of service out of their jobs.
• There remains confusion and skepticism over the March 21-signed memorandum of agreement with the B.C. Government and Service Employees' Union that is supposed to grant warehouse workers post-privatization job security and buyouts or early retirement. 
• Bissoondatt does not fully answer a question about the rumoured $200 million replacement cost of the Vancouver LDB warehouse being a reason for privatization. Instead, he sticks to the government line about improving the current distribution model and selling the warehouse to realize a financial gain for the province.
• Question 18 wonders "how can the general public be assured that the system of awarding the best company was done honest and fairly?" Bissoondatt parrots more government lines about the process being managed by "professional public servants" and that a fairness monitor, George Macauley, was hired. (NDP critic Shane Simpson found that Macauley's power to ensure and enforce fairness is somewhere between slim and none.)
• And, we find out that Viti Wine and Lager general manager Ralf Joneikies did get his 10 cases of Rogue Voodoo Doughnut Bacon Maple Ale order filled on May 22, despite his July 20 anti-LDB op-ed in the Vancouver Sun. Bissoondatt wrote that he was "troubled" when he read the Joneikies article: "We considered responding to him but decided that a response would draw attention to his unfounded allegations." (Huh? If there was an error, why not seek to have it corrected?)

Below is the Sept. 11 company-wide email in its entirety:

________________________________

From: Dahlke, Cindy LDB:EX

Sent: Tuesday, September 11, 2012 3:49 PM 

To: LDB D All Employees 

Subject: AskRoger - LDB's Wholesale and Distribution Services 

Message from Roger: 

Over the past month, a number of employees have sent questions to my AskRoger@bcldb.com email address regarding the privatization of the LDB’s Wholesale and Distribution services.  Thank you to those who have taken the time to write me.
Attached are the questions I have received and my responses. Some questions have been slightly abbreviated because of their length. Please do not hesitate to send any other questions you may have to AskRoger@bcldb.com.
With regard to the RFP process, the government evaluation team is currently working with the four shortlisted bidders to provide them with information they have requested so that they can refine their proposals. It is expected that the bidders will submit refined proposals in early October and the evaluation team will recommend the successful bidder by the end of October.  The four shortlisted bidders, in alphabetical order, as announced in my July 20, 2012 email to you, are: ContainerWorld Forwarding Services Inc.; Exel Canada Ltd.; Keuhne + Nagel Ltd. (sic); and Metro Supply Chain Group Inc.
Roger Bissoondatt
Acting General Manager

Questions and Answers.

Q1:         What guarantee is there that the stores will not be privatized shortly after?
R1:          Government has said on numerous occasions there are no plans to privatise government-operated liquor stores. 

Q2:         Dear Jay/Roger,
On Thursday May 31st, Minister Rich Coleman was the guest on “The Voice of BC” – a local talk show hosted by Vaughn Palmer.  At about the 36 minute mark, Matthew Phillips of Phillips Brewery asked this question:
We’re concerned about the Liquor Distribution Branch distribution costs and service levels and so we’re wondering if he [Rich Coleman] can commit that the new privatized scheme will have the same price and the same service levels that we’ve been accustomed to?
In response, Minister Coleman offered the following:
But really what it all comes down to is:  Is there a way to better distribute and warehouse liquor to the advantage of us and find savings and efficiencies to get service up?  We actually do get a number of complaints about service from our private sector partners whether it be liquor stores, pubs and those things about how we are servicing them in our present distribution systems.  So, to find out whether there is a better way of doing it, I don’t think anybody should be afraid of that.
As the Foreman of the Parts Department, which oversees the order picking for the Wholesale Customer Centre, it is my job to ensure that our private sector customers get the best possible customer service in terms of timeliness, productivity, accuracy and general load quality.  If there are complaints in this regard, it is my responsibility to follow-up on them and then to initiate corrective measures that will lead to improvements.  So, my question is:
Is there anything I can do, within the context of my current responsibilities, to address the complaints that Minister Coleman has received from our private sector partners?
Thank you for giving me the opportunity to ask my question.
R2:          I am confident that we provide our customers with good service and work hard to address any concerns they may have.  As Minister Coleman and Government have noted, the purpose of the RFP process is to determine if a privately operated liquor distribution model will be an improvement over the current one. 

Q3:         I was wondering if this RFP is considered to be a done deal? There are protests going on about this process, the public is beginning to question why this is being done, is there any chance the government is going to reconsider?  Or, is it already too late?
R3:          The decision of whether to proceed with privatizing the warehouse and distribution services rests with Government. Minister Coleman and Minister MacDiarmid have said on a number of occasions that in order to proceed there must be a benefit for taxpayers and the liquor industry. The RFP process will allow government to determine if there is a benefit to proceeding with privatization. 

Q4:         Thanks for the update to the RFP.  I have a question though. After March 2013, how will I know I will still have a job to come to every day?  I imagine that there is a lot of controversy around who will lose their positions, and probably lots of rumours flying around but nobody seems to have a definitive answer to this question.  Perhaps you could let us know where our positions are headed (like mine [IS Security] team …).
R4:          Until a new distribution/wholesale model has been approved and the related system requirements are determined, the LDB will not know the extent to which LDB positions could be affected.  If an employee is affected, then Article 36.2 of the Collective Agreement will apply. This article outlines the employee options with respect to placement should positions be affected. I appreciate that this uncertainty is stressful and I will ensure that employees are provided with timely information as it becomes available. 

Q5:         …In the meantime, I refer you to the Sun article by Ralf Joneikies on July 20, 2012 (attached) where he fires a number of criticisms at the LDB including WCC errors, reprisals for speaking up about service, order cancellations, Spec product appropriations and last but not least (if you can believe it) the Stockholm Syndrome.  In his article he alleges that we cancelled an order for 10 cases of Rogue’s Voodoo Bacon Maple beer and insisted that it be released to another customer. Well, I looked into this and found that Ralf Joneikies’ order for 10 cases of Rogue Voodoo Bacon Male Ale – SKU # 206730 was filled on May 22nd.  So, my second question is:
Are we (meaning the LDB) going to craft a response to Mr. Joneikies in an effort to reassure him that we do indeed take customer service seriously and that we are dedicated public servants acting in good faith at all times – this includes the men and women who work in the Wholesale Customer Service Centre and the many others, like me, who support them?
Again, thanks for allowing me to ask my questions!
R5:          Like you, I was also troubled when I read Mr. Joneikies’ letter in the Vancouver Sun and I wholeheartedly agree with your description of the people who work in our organization.
We considered responding to him but decided that a response would draw attention to his unfounded allegations. During this time of significant public and media attention on the distribution privatization issue, we can expect many people to express a range of opinions.  Rather than get drawn up in the debate, I believe that our best approach is to remain calm and continue to work hard to serve our customers. 

Q6:         What is the Provincial Government of BC’s issues with the present LDB operations that have driven them to put the privatization of the Distribution Centres out for bid?
R6:          Government has stated on a number of occasions that they are interested in determining if a private sector distribution model will be an improvement over the current system and will benefit taxpayers and the liquor industry.  Government has also stated that privatizing distribution will free up the LDB’s warehouse real estate that could be sold to help balance the budget. 

Q7:         How is selling and privatizing the warehouse and distribution of the LDB going to directly and indirectly affect the Liquor Stores and its employees?
R7:          The RFP is not related to our government-operated liquor stores, however if a private service provider is selected we can anticipate there will be a number of implications for our retail operations. For example, BC Liquor Stores will become a customer of the new service provider and the full impact of this will not be known until a formal agreement is implemented.
There is a possibility that BC Liquor Store employees could be affected depending on the decisions of displaced Distribution Center employees, some of which may elect to remain within the LDB. According to the Collective Agreement, only regular employees with less than three years of service seniority can be displaced or bumped. Currently, the majority BC Liquor Stores regular employees have seniority levels greater than this. 

Q8:         Given the time frame for the completion of the RFP, the closing date could possibly put 7 full time regulars in #079 Columbia Place in jeopardy of being bumped to the auxiliary list from the Kamloops or Vancouver Distribution Centre (KDC or VDC) employees;
a)      How does the LDB promote privatization as a positive move when we will have present full-time employees in jeopardy of losing their homes and vehicles due to a drastic cut in hours and now being in Auxiliary positions and getting part time hours?
b)      How would a present fulltime Regular employee be affected by being bumped out of a fulltime position into an on call Auxiliary position? I.e.  Loss of benefits, wage rate, etc.
c)       What is the plan from Store Operations for having the stores affected by a large number of bumps transition through training and successfully operate by getting as many as 7 people from the warehouse in Full time Regular positions with no customer service skills, product knowledge, till training, shelf stocking, beer and liquor invoice receiving, picking, staging, or the shipping of licensees from a liquor store perspective?

R8:          (a) The LDB is not promoting privatization.  Government has made the decision to examine the distribution model and determine if it can be better operated by the private sector.
(b) A regular store employee who is displaced or bumped and chooses to move to the auxiliary recall list is covered under Article 13.3 (4) of the Collective Agreement.  The employee would maintain their regular status (benefits) unless they have not worked 1,200 hours within the previous 26 pay periods. The employee’s wage rate and benefits would not be impacted. However, the employee would be considered to have auxiliary status for the purpose of vacation scheduling (15.3) and layoff notice (15.4).
(c) According to the Collective Agreement, only regular employees with less than three years of service seniority can be displaced or bumped.  Currently, the majority BC Liquor Stores regular employees have seniority levels that make it unlikely that any one store will have a significant number of displaced employees.
Prior to being offered a BC Liquor Store position, a displaced LDB employee would have to be deemed suitable and qualified. These employees will receive appropriate training similar to that provided to all new LDB employees and the ongoing training regular employees receive. 

Q9:         What is the projected profit in dollars for the LDB in what used to be called the Distribution Channel or Warehouse contribution for the fiscal year 2013 encompassing a full year of Private Distribution?
a.       What are the five year numbers for projected profits?
b.      What are the ten year numbers for projected profits?
R9:          The LDB’s warehousing and distribution system is a cost center for the LDB, not a profit center.  One of the objectives of the RFP process is to determine if a private sector service provider can operate the system more efficiently.

Q10:       What will the process be for the distribution of alcohol to stores?
a.       Who will be buying the product from the Wineries, Distilleries, and Breweries?
b.      Who will be receiving the initial mark-up dollars before selling it to wholesale channels?
c.       What will the discount % be for the BC Liquor Store Chain from the supplier?
d.      What will the discount be for the wholesale sector (LRS, RAS, etc...)?
e.      What will the profit margin be for BC Liquor Stores?  

R10:

(a)    It is anticipated that suppliers would own the inventory that would be stored in the private sector service provider’s warehouse(s). The process for ordering the product into the warehouse(s) would depend on the agreement between government and the service provider.
(b)   It is anticipated that the LDB would purchase the liquor at the time it is shipped and sell it to the wholesale customers. The LDB’s mark-up would be collected when the LDB sells the liquor.
(c)    , (d), (e) At this time, consideration has not been given as to how pricing policies may be impacted by the new distribution model. 

Q11:       Will all customers be on a level playing field for product availability? Specifically SIPS products and cold beer being available for all sellers of beverage alcohol in 1BC?
R11:       The RFP process relates to warehouse and distribution services, not services provided by government liquor stores.  At this time, there are no plans to change services offered by government stores. 

Q12:       How will the stores be affected in terms of the numbers of deliveries we now get being reduced to maximize profits by the distributing company trying to deliver more products less often? Example – a few years back Commercial Logistics/BDL cut the number of Beer deliveries from three to two deliveries per week in larger stores and from two to one in some others as it was more cost effective for them.
R12:       One of the key components of the RFP for the privatization of the LDB’s warehousing and distribution services is product delivery. The RFP evaluation team will be looking closely at how each of the four shortlisted companies plan to deliver products to our network of 195 stores across British Columbia.

Q 13:      How will delivery costs affect BC Liquor Stores?
R13:       If a contract is signed with a private service provider, BC Liquor Stores will become a customer of the service provider, along with private liquor stores. Until an agreement is signed, we will not know what these delivery costs will be. 

Q14:     How will delivery costs affect the present Wholesale Channel Customers given they have been subsidized for the past few years and will now have to pay the full shot?
R14:       Until an agreement is finalized, we will not know what the delivery costs will be. As a result of the new model, there may also be other changes. We will not know the total cost structure of the new model until all of the pieces are in place. 

Q15:       How will delivery costs vary dependant on where you are located in the Province of BC under the new distribution system?
R15:       The Wholesale and Distribution Services RFP requires all potential service providers to base their proposals on a “postage stamp” pricing model (same price for product delivery anywhere in BC).

Q16:       What is Store Operations plan in the event that a Wholesale Customer who is presently getting deliveries from the Wholesale Centre chooses not to order their product from the new distributors (due to increased delivery costs, concerns of customer service drop off, etc...) and decides on going back to getting their product from BC Liquor Stores, thus putting increased pressure on the stores? (less staff on the floor to provide customer service to Counter Customer thus affecting sales  and lost warehouse space due to more custom orders)
What contingency plans are there to combat the above scenario as far as labour control, picking charges, etc...?
R16:       An important consideration in choosing the successful bidder for the RFP will be the level of service they will provide to wholesale customers.  I am confident that an agreement signed with the successful bidder will ensure that the LDB’s direct delivery wholesale customers will receive a high level of service and will not have an interest in accessing products from our stores. 

Q17:       If costs are going to increase due to delivery charges from the Private Distributor, then how will the shelf prices be affected one month later when the HST is gone on April 1st 2013 and we go back to the old system of PST/GST?
R17:       Delivery charges will not be known until a final agreement is signed with a private service provider.  When the HST was introduced in July 2010 and the provincial portion of liquor sales tax was reduced from 10 per cent to 7 per cent, LDB  liquor mark-ups were increased to generally keep shelf prices constant.  The PST rate of 10 per cent on liquor will be reinstated with the re-implementation of the PST and liquor mark-ups will be reduced to their pre-HST levels to generally keep shelf prices constant. 

Q18:       With the bad press that was received by Excel Transport and leaked documents how can the general public be assured that the system of awarding the best company was done honest and fairly?
R18:       The process to select a service provider is being managed by professional public servants that have been involved in many government procurement projects and will ensure fairness and integrity in the process.  The Government has also hired a Victoria lawyer, economist and consultant George Macauley to augment the process and serve as a Fairness Monitor. In this role, Macauley is responsible for the following:
a) Review the procurement documentation so as to understand the RFP process;
b) Monitor the procurement process for adherence to the terms of the RFP, including participating at the Proponents’ meeting, site visits, oversight during evaluation of submissions and subsequent Proposal refinement process as well as final selection of the Selected Company; and
c) Prepare a fairness summary based on observations made during delivery of the procurement process. This report will be available to the public. 

Q19:       What are the anticipated changes to the BC Liquor stores ordering programs and procedures and timeline to transition into a new system supported by the new distributor?
R19:       The private sector service provider would be expected to have a robust ordering system to facilitate orders from LDB stores and private stores.  The details of the ordering system and the timing of implementation will be based on the agreement that government and the service provider would negotiate. 

Q20:       How can the employees be positive in their future job prospects when the Captain of the ship and other long term employees in major areas of Head Office are leaving in large numbers to other jobs outside of the LDB?
Q21:       Why are so many employees leaving Head Office?
R20/21: The number of employees throughout the Branch who have left the LDB so far in 2012, for reasons other than retirement, is consistent with previous years – about one per cent. However, a large number of employees are reaching retirement in 2012 – 83 to this point.
The LDB continues to have a strong core of experienced employees and will fill vacancies as they arise with competent replacements.
With respect to Jay Chambers, he clearly stated that after 15 years as the LDB General Manager, he felt it was time for a change. 

Q22:       Why are most recent Head Office postings only temporary positions?
R22:       This is nothing new at Head Office. From June to September, it is peak vacation time at LDB Head Office. This is the time when many long term Head Office employees take extended periods of time off and these key operational positions are back filled by posting them as temporary opportunities. Backfilling these roles provides employees with an opportunity to expand their knowledge and skills. When regular, full-time opportunities become available, they are posted as a vacancy not a temporary position. 

Q23:       How are jobs that are coming available in the next year being affected by the possibility of VDC/KDC employees that don’t choose to go to the new employer?
R23:       A Memorandum of Agreement (MOA) has been signed between the government and union regarding the privatization of the LDB’s Distribution and Wholesale operations. Auxiliary employees will be converted into vacant positions where possible.
Vacant positions (e.g. supervisory positions) will continue to be posted. However, these positions will be reviewed to determine if a potentially affected employee might be eligible for the position. 

Q24:       It was once brought into the public spotlight that one of the reasons privatization has surfaced is the VDC Warehouse is in need of replacement and it would cost in the neighbourhood of $200 million to replace it in a new Lower Mainland or Fraser Valley location, can you comment on this?
R24:       Government has stated a number of times that the interest in considering privatization is to determine if the current distribution model can be improved and to realize a financial gain from the sale of the LDB’s warehouse real estate. 

Q25:       What is the estimated selling price for the Distribution Centre/Service and how does it compare to the annual revenue now?
R25:       The intent of the RFP for Warehousing and Distribution Services is to determine if there is a private sector company that can assume the warehousing and distribution services in a manner that meets the needs of taxpayers and the liquor industry.  Government will not receive a cash payment from the service provider.
With respect to the VDC and KDC property, government intends to sell these through a separate process in the future. The value of those properties will depend on their market value at the time of sale. 

Q26:       Will buyouts be offered?
R26:       Government has signed a Memorandum of Agreement with the BCGEU to address impacted LDB Distribution and Wholesale Center employees.  One of the options that will be available to employees, depending on their circumstances is a Voluntary Departure Plan.

As always, stay tuned to this space for more developments and documents.

#LiquorLeaks reveals Coleman's Chrismas in March

Much has now been written about Exel Logistics and its thirst to become the private operator of the Liquor Distribution Branch's warehouses and distribution network. Exel proposed a private-public partnership, hoping to score the contract without a competition. On the alternative, Exel wanted to position itself as the winning bidder. A Sept. 24, 2010 letter by vice-president Scott Lyons to liquor minister Rich Coleman is the best proof so far that Exel sought to use its relationship with Coleman to influence the writing of the request for proposals, just as Exel contemplated in the "Project Last Spike" internal memo of Oct. 6, 2009.

Exel has contingency plans and one involves acquiring Richmond warehouse ContainerWorld, the biggest pre-distribution warehouse for liquor in B.C. A great deal of the bottles you see on shelves in B.C. went through ContainerWorld before entering the LDB system. ContainerWorld has a business relationship with Giorgio Gori of Italy. Gori is owned by Deutsche Post DHL, which, coincidentally, owns Exel.

ContainerWorld's founder and present owner is Dennis Chrismas, a BC Liberal supporter who donated to liquor minister Rich Coleman's campaign in 2009. Chrismas (whose name doesn't include the letter-T) hired lobbyist Mike Bailey to encourage the government to keep the status quo. Now that the LDB logistics monopoly contract is in play -- and the government is phasing out the pre-distribution program -- Chrismas had to throw his hat in the ring. As the document below shows, Chrismas and Bailey met with Coleman on March 2 from 12:30 p.m. to 1 p.m., according to a copy of Coleman's agenda I obtained via Freedom of Information. (The documents also show Coleman met with B.C. Government and Service Employees' Union president Darryl Walker and negotiator David Vipond on March 28, a week after the union and government agreed to a post-privatization job security and early retirement package. But that's another story, right here.)

Despite my numerous attempts to find out what was discussed in the meeting, neither Coleman nor Chrismas have responded to my interview requests.


If Exel doesn't make it to the shortlist on July 20 and ContainerWorld does, then don't for a moment assume that Exel is out of the game. The "Project Last Spike" memo spelled out Exel's ContainerWorld strategy. Read all about it here, from Business in Vancouver.


Rich Coleman Agenda

"Stee-rike" 1 at Liquor Distribution Branch

The British Columbia Government and Service Employees' Union is rightfully on the warpath during its 70th anniversary year.

After six months of negotiations with the B.C. government, the gloves are coming off and it could be a long, hot summer. The BCGEU wants a 3.5% increase for its 29,000 members across government for the first year of a new contract and a cost of living increase in the second. The government has offered only 3.5% over two years and Finance minister Kevin Falcon has drawn a line in the sand.

"The world economy is actually getting worse, it's not getting better," Falcon told CKNW on June 29. "I think the unionized workers really need to understand that our offer will come off the table, and I'd sure like to see them return to the table before that offer's removed for good. It is not going to get any better."

The first salvo fired by the BCGEU is to strike at three important Liquor Distribution Branch locations. The Vancouver headquarters, which includes offices, the main warehouse and the flagship store, will be behind pickets from 11:30 p.m. July 2 to 11:30 p.m. July 3. Similar strikes are scheduled for July 3 at the LDB's Kamloops warehouse (5:30 p.m. to 10:30 p.m.) and Victoria wholesale customer centre (6 a.m. to 5 p.m.). The disruptions are bound to cause a hiccup in the supply chain and the government will feel a pinch. But it will not be anything like the 1970s and 1980s when a summertime strike at government liquor stores in B.C. created chaos.

This is an intriguing strategic move. LDB is one of the province's biggest, most profitable retailers and the 3,500 BCGEU members who work in it are important collectors of provincial tax revenue. During the 2010-2011 fiscal year, LDB delivered an $890.4 million profit to government on $2.82 billion gross sales.

The government is amid a controversial program to privatize LDB's warehousing and distribution -- without a business plan and without formal industry consultation but with evidence that such a move is being done primarily to benefit BC Liberal party insiders. Evidence is contained in Exel Logistics' "Project Last Spike" internal memo from Oct. 6, 2009 that even suggests the BCGEU was an ally in its privatization push. UPDATE JULY 3: Exel and ContainerWorld are among the six companies that submitted bids by the June 29 deadline. The others were Hillebrand Westlink, Kuehne + Nagel, Metro Supply Chain Group and Schenker of Canada. A shortlist of as many as three companies is expected by July 20. On April 30, liquor minister Rich Coleman said the shortlist could be as small as one company. Companies related to Exel, Schenker and K+N were found to be involved in a price-fixing conspiracy and disciplined by the European Commission. Additionally, Exel has an intriguing connection with ContainerWorld, the biggest existing liquor warehouse in B.C.

BCGEU is now publicly opposing the privatization, after signing a March 21 memorandum of agreement for post-privatization job protection and early retirements. The June 29 news release announcing the three strikes said another reason to picket the LDB work sites is "to back our proposal for Sunday liquor store openings province-wide to generate more than $100 million in annual revenue."

That's odd. BCGEU president Darryl Walker (right) told me in a May 3 interview that the proposal was dead. Killed, in fact, by the government in negotiations leading to the March 21 agreement. The Sunday openings proposal was considered a deal breaker by the government, Walker said. Below is an excerpt from my interview with Walker.

Mackin: If BCGEU is opposed to the privatization of this asset, then why would it have made the deal, made the memorandum of agreement to get the job protection for the workers, for the members? Wouldn't it be better if the BCGEU went out on principle and said 'no, we're not going to agree to this, we're going to, on principle, oppose this entirely' and rip up the MOA? 

Walker: "Part of the reason that we sat down with the government and put the MOA together is to protect our members, and that is our primary responsibility as you probably know under our certificates with the Labour Relations Board. We're held highly accountable for the rights of our members and when you see an opportunity to protect the members, the first piece is to get that done. That's why we sat down and worked with the government.  

"You might also know that of course we had a proposal on the table to open stores on Sundays, thereby increasing revenues by, well, as much as $120 million to $140 million to $150 million annually. We were told by the employer that if we didn't take that off the table we would be unable to provide or get the protection in the MOA for our members. So we were in a position first off to protect our members and that's what we knew we needed to do.  

"Once that was done and we had those in place we then understood we were able to do the second piece, which is to oppose this on principle. Principle is one thing, quite frankly British Columbia needs revenues now and we need to be able to say to B.C. that we can show the government methods of providing and enhancing those revenues. We needed to be able to do that but we needed to be able to protect our members first. That was our primary responsibility. We saw it as a bit of a two-step, and we realized that one had to go first if we were to protect our members."

There may be reasons to limit Sunday openings. Chief medical officer Dr. Perry Kendall reported in 2008 that a government monopoly on the retail of alcohol and restrictions on hours and days of sale are among the 10 "best practices policies for managing the health and social harms of alcohol." Kendall told me the government did not consult him on the potential health or social implications of the privatization of LDB warehousing and distribution.

There are also 1,400 liquor retail outlets in B.C., of which only 197 are government-owned. The majority are licensee retail stores (672) and rural agency stores (221) owned and operated privately by companies that were granted Sunday opening privileges by the Liquor Control and Licensing Branch and their host municipalities. The licensee retail stores would obviously not be amused if they had to suddenly compete with the government for customers. (They are represented by the Alliance of Beverage Licensees of B.C., which opposes the privatization.)

There is no evidence, however, that government has recently studied any of the commercial or health implications of anything to do with the wildly lucrative and socially risky business of booze. If it has any, the government doesn't want to share any business plans or cost-benefit analyses with you or me.

I have made numerous requests to interview Coleman. He has not sat down for an interview with me.