Despite laying off 27 employees — or 20 per cent of its workforce — the Westlock Foundation does not expect its clients will see any change to the services they receive.
On Nov. 1, 2013, the Westlock Foundation entered into a management agreement with the Sturgeon Foundation, a move that sees Sturgeon take over day-to-day operations of Westlock’s facilities. This is not a merger of the two foundations, Westlock Foundation board chair Jim Wiese said. The Westlock board will continue to exist, and will continue to own the Pembina and Smithfield lodges. In addition, the board retains control over how much it requisitions from taxpayers.
All that changes is that Sturgeon will oversee Westlock’s day-to-day operations for the next three years.
“Their management team will become our CEO,” Wiese said.
Among the chief tasks Sturgeon had on its plate when taking over Westlock’s management was getting finances in line — for 2013, the Westlock Foundation ran a deficit close to $300,000.
Sturgeon Foundation executive director Dennis Magnusson said Westlock’s biggest expense was its salaries, thanks in part to the Pembina Lodge expansion not being fully occupied.
“Their staffing was out of proportion,” he said. “That’s one of the reasons they had a deficit. The place was staffed up in past years anticipating that they’d be 100 per cent occupancy. If they were completely full, now you’ve got more revenue, and you need more staff when you’re full.”
According to housing administrator Jennifer McLeod, as of Jan. 17, there were 15 vacancies out of 60 rooms in the original Pembina Lodge, and 30 out of 68 rooms in the expansion, for a total of 45 vacancies out of 128 rooms within the entire facility.
Magnusson said his management team looked at all possible options to reduce Westlock’s costs and balance the budget.
One option was to continue with the status quo and continue requisitioning enough money to cover the deficit, but he said the Westlock board members indicated there was “no appetite” to go that route.
As such, a plan was put in place to review staffing levels.
“How can we bring this more in line with the way you would traditionally staff a lodge?” Magnusson said his team asked.
In early January, he said his team met with CUPE representatives to outline their plans to restructure staffing at Pembina and Smithfield lodges.
The end result was 27 employees got letters indicating their services were no longer required, with half of them being laid off.
“In other words, they lost their jobs,” Magnusson said. “But when you’re laid off, it’s not quite the same thing as being terminated. It means if there is work in the future those ones will be the first ones called back.”
He added none of the released employees did anything wrong, it was just a factor of reining in Westlock’s costs.
No one with CUPE was available for comment by press time.
As for how the staffing reductions would affect the services provided, he said the impact would be minimal to non-existent.
“There will not be any reduction in service to the residents because we were, in fact, overstaffed,” Magnusson said. “The residents will not see any change.”
There will still be staff in the facilities 24/7, he added, and maintenance will continue to be performed, even though there will be fewer people to do it.
Magnusson said he wanted to allay any fears that the lodges’ food service could be negatively affected by the staffing reductions.
Meals will still be prepared on site, he said, and will follow Canada’s Food Guide to ensure they are healthy.
However, he did say some cost-cutting measures may be implemented.
“Will we make some changes to the menus and try to bring down our food costs? Of course we will,” Magnusson said.
“But we’re not going to compromise the number of meals that somebody gets, and the quality of the food will not be compromised.”
Wiese said he was unaware of the scope of any potential job cuts, but implied staffing reductions were on the table as a means of bringing Westlock’s finances in order.
“If our staffing levels are 15-20 per cent higher than the industry average, we have to look at those numbers and bring them in line with industry averages,” he said.
Ultimately, it’s up to management to decide how to run the two lodges, he said. The board’s job is to set the direction the foundation wants to go, as well as watch the money.
Regardless of what management does, Wiese said he’s confident service won’t deteriorate.
“There will be no changes to service levels,” he said.
The move to a management agreement with the Sturgeon Foundation came about following the retirement of the Westlock Foundation’s previous CEO, Marilyn Lannon, last May.
Magnusson explained following Lannon’s retirement, the Westlock Foundation had to decide whether to hire a new manager, or work with other foundations.
Westlock discussed management agreements with both Barrhead and Sturgeon, and ultimately opted to sign on with Sturgeon.
Wiese added Alberta Municipal Affairs was “pretty adamant” Westlock enter into a management agreement with another foundation. In fact, he said without the province’s hint, Westlock would likely not have known such an agreement was possible.
The decision to enter into a management agreement was not taken lightly, Wiese said. From the time Lannon retired, it took about six months of examining the options before signing the agreement.
