City council’s recent pay increase has not sat well with some voters.
However, the councillor job is not the lucrative gig that some imagine. Unlike their Calgary counterparts, Red Deer councillors have no pension or transition allowance when they leave office. Councillors are also not eligible for employment insurance should the electorate choose to fire them at the ballot box.
City of Red Deer human resources team leader Greg LeBlanc said councillors are eligible for a matching RRSP contribution of 7.5 per cent of base salary.
In 2012, the city did away with a complicated per diem system to include most of those sorts of expenses in the base salary.
While out-of-town travel is covered, in-town travel is not.
Council compensation has been firmly in the spotlight this month because elected officials had to decide whether to boost their salary to avoid taking pay cuts because of federal tax law changes removing a long-standing tax exemption on Jan. 1, 2019.
The compensation increase was passed on Monday night by a split 5-4 vote.
As a result, Red Deer city council salaries will increase next year to $68,618 from $60,466, and the mayor’s salary to $131,940 from $112,198.
The tax exemption, which applies to all Canadian elected officials on municipalities, school boards, commission or similar entities, has been around since 1947.
It was envisioned as a way for municipalities, particularly smaller ones, to provide a higher salary than municipal finances might otherwise be able to afford.
“What it has allowed is for even smaller municipalities, for example, to afford to pay their elected officials with less operational money because a third of it is not going to be taxed,” said LeBlanc.
“That’s some of the history behind it.”
Almost all municipalities took advantage of the tax-free arrangement. Calgary was one of the few to opt out, dropping the tax-free portion of council pay in 2006. The Alberta government removed the tax-free portion of pay for MLAs and ministers in 2012.
In Edmonton, an independent council compensation committee recommended in 2013 abandoning the tax-free portion and covering it through municipal taxes, but council balked. When the federal government announced in 2017 its coming policy change, Edmonton council voted to eliminate the tax-free portion.
A number of other Central Alberta municipalities, including the city and county of Lacombe and Red Deer Public School Board, have also topped up their pay for 2019, and others are considering it in light of the federal move.
While mayor and council have taken pains to point out that they will not take home any more pay, the issue has touched a nerve among many taxpayers.
A Red Deer Advocate poll found 92 per cent were opposed to council topping up salaries.
How sensitive an issue city council pay can be was clear on Monday night.
Mayor Tara Veer acknowledged that debating their own compensation is the “last thing” that council wants given all of the other issues on its plate.
A vote to table the proposal to increase the pay of mayor and council failed by the slimmest of margins, 5-4. Council went on to approve pay raises to compensate for what would have been steep pay cuts by the same split vote.
Veer suggested it was unfortunate that the tabling motion failed.
“If council has such different minds, obviously we needed more discussion,” said Veer, who voted, along with councillors Frank Wong, Buck Buchanan, Ken Johnston and Lawrence Lee to increase compensation.
There seemed to be little debate on council about the fairness of topping up compensation, but some wanted to see it discussed as part of a larger discussion over what council is paid and whether it reflects modern workloads.
Johnston said 30- to 60-hour workweeks are not unusual. A former banker, Johnston estimated the job was often barely a minimum wage gig.
There have been suggestions pay be increased to 75 per cent — instead of half — of the mayor’s salary or that councillors become full-time positions.
Coun. Dianne Wyntjes said she’s heard from members of the public who complain that when they’re hit by government taxes, they have to “eat it.”
“The expectation is we should have to too.”
A review of council compensation is scheduled to take place this summer. LeBlanc said it will look at other communities and council may direct staff to prepare a report on the part-time status of council. The review is set so that changes would take effect halfway through council terms.