TORONTO - Most civilian members of Toronto's public housing board bowed to a week of pressure from Mayor Rob Ford and stepped down Thursday following a spending scandal.
The others should follow suit, said Ford, adding taxpayers are upset about the wasteful spending revealed earlier this week in an auditor's report.
"I think we have to start fresh with a whole new body," the mayor said of the beleaguered Toronto Community Housing Corp., which serves more than 164,000 low and moderate-income tenants.
Seven of the nine civilian board members, including chairman David Mitchell, quit Thursday at an emergency board meeting called to discuss the auditor's report. It revealed tens of thousands of dollars in questionable purchases by staff, including parties, chocolates, a boat cruise and spa trips.
Mitchell said the board members could no longer continue after the mayor said he'd lost confidence in them and suggested the corporation be privatized.
"We cannot work effectively when the mayor is unreachable for constructive dialogue with responsible and dedicated citizens working to carry out the wishes of the city as described in the shareholder agreement," he said.
Two members who are tenant representatives and four city councillors did not resign from the board. Ford said he would reveal on Friday whether he would fire CEO Keiko Nakamura.
"I talked to Keiko. And as you know I asked her to resign and she has said no, so she knows how I feel and we'll take it from there," Ford said.
Nakamura issued a statement Thursday afternoon suggesting she intends to stay as long as possible.
"At the board meeting, I apologized to tenants for our failures, particularly for wasting money that could have been put toward repairs and services," she said.
"We must put tenants first and spend the public's money wisely and well."
In two scathing reports last week, auditor general Jeff Griffiths listed inappropriate spending by staff, including almost $100,000 spent on Christmas parties, $1,925 spent at a spa and $1,000 worth of Holt Renfrew chocolates.
Millions of dollars were also awarded through improperly tendered contracts, but Griffiths said he found no evidence of fraud. He didn't mince words at the board meeting.
"In my eight years as auditor general at the City of Toronto, I've never seen such a blatant disregard of policies and procedures as they relate to employee expenses," he said.
"Quite frankly, the inappropriateness of many expenses angered and outraged me."
One tenant who spoke at the meeting echoed Griffiths' comments.
"I'm angry because I can't see how you can spend this money on whatever you spent it on and not fix your buildings."
But Nakamura told the meeting she had taken action.
"We have six staff who are no longer working for this company. Fourteen remain employed but have undergone discipline through suspension, repayment and warnings. Four remain under investigation," she said.
Ford, who was elected on a cost-cutting platform, said he hoped to have a new board in place in about a month.
"We're going to get this board back on its feet and restore the trust because a lot of tenants are really upset about what happened and rightfully so," said Ford.
"Obviously, the taxpayers are pretty upset on the wasteful spending they saw take place, $50,000 for Christmas parties and chocolates. It's just a bunch of nonsense."
Ford's comments followed his address to about 300 people at a Canadian Club luncheon at the Fairmont Royal York Hotel. In his speech, titled "Respect for Taxpayers," he listed his achievements after 93 days in office, such as saving taxpayers $67 million.
"Have we stopped the gravy train? No, but we've dramatically slowed it down," he said.
Meanwhile, the union that represents city workers at the housing corporation is calling for the agency to be brought under direct management of the city.
"By being under direct control of the city there would be increased transparency and accountability," said Ann Dembinski, president of CUPE Local 79, adding privatization is not the way to go.
