CITIZEN COMMITTEE ON COUNCIL REMUNERATION

TO: Mayor and Members of Council

RE: Council Remuneration

DATE: January 18^th, 2005

STAFF SUPPORT: Suzanne Sonoda – HR Analyst

Chris Raynor – Committee Clerk

Purpose

To provide an analysis of information regarding Council Remuneration and obtain approval for recommendations brought forward by the Citizen Committee on Council Remuneration (‘the Citizen Committee’).

Background

As per the resolution of Council Meeting No. 15 dated June 30^th and July 1^st, 2004, a Citizen Committee was established to review and recommend remuneration including salary and benefits for Elected Officials.

The following representatives from the business community and local residents were selected:

• Lorne Clodge, Chair
• Helen Murray, Vice-Chair
• Frank Vetere
• Deb Weller
• Wilbert Lai
• Rahul Bhardwaj
• Drew Gerrard
• Louie Tucci (resigned)

The Council report dated June 28^th, 2004 indicates that the primary task of the Citizen Committee was to make recommendations on a fair and equitable rate of remuneration for the Mayor and Members of Council for the three-year term from December 1^st, 2003 to November 30^th, 2006. In addition, the Committee was mandated to recommend an appropriate method for adjusting remuneration for subsequent terms. The review should also consider the appropriateness of benefits for Councillors.

The Citizen Committee review included the following:

1. Interview all Members of Council and the Chief Administrative Officer to get input on the roles and responsibilities of Elected Officials
2. Undertake research with the help of the Human Resources Department, on internal and external factors that could influence the Committee’s compensation recommendations, including details on the current compensation structure
3. Look at comparative data from other municipalities
4. Review Town of Markham Year 2000 Mercer Report (similar information was requested from York Region, however, access was denied)

The Citizen Committee was given the option of retaining an outside compensation consultant (costing from $10,000-$15,000), however, it was found that the quality of information and analysis provided by staff was more than sufficient. In addition to the efforts of Suzanne Sonoda and Chris Raynor, we would like to thank John Livey and his staff for assistance provided.

Methodology

In the beginning stages of the Council Remuneration Review, the Citizen Committee identified a number of factors, both internal and external, that could potentially influence the decision making process. These included comparator salaries, consumer price index, population, growth of Markham, roles and responsibilities of the municipal Councillor, and more. In addition to obtaining information regarding the above topics, the Committee utilized questionnaires and interviews as tools to ascertain the roles and responsibilities as perceived by the Members of Council as well as to determine the perception of fairness regarding remuneration. Furthermore, Gary Schecter, Member of the 2003 Richmond Hill Compensation Review Committee (RHCRC) was brought in to explain the review process undertaken by the RHCRC and answer any questions regarding the steps that were taken to arrive at their decision.

As indicated above, questionnaires were sent electronically to all Members of Council. The following questions were included:

• In your opinion, what internal and external factors should be considered when determining remuneration? (e.g. size of ward, COLA, etc..)
• What do you think are your roles and responsibilities as an elected official?
• What are the most important/complex components of your job?
• On which activities do you spend most of your time?
• How many hours (on average) do you spend per week as a Councillor?
• What’s your perspective regarding current compensation for Members of Council?
• How often do you think remuneration should be reviewed?
• Do you consider this to be a full-time job?
• How has your job changed since you first became an elected official?

Six (6) responses were received in total.

Additionally, interviews were conducted with 12 out of the 13 Members of Council. The following question was asked:

Do you think your current salary as a Member of Council for the Town of Markham is fair or unfair? Please explain your position.

In analyzing results of both the questionnaire and the interviews, it was agreed that the significant issues requiring discussion were:

• Severance Pay
• Benefits
• Salary
• Scope of Councillor’s role
• Effectiveness and complexity of Council (proactive leadership)
• Policy makers vs. implementers

Before commencing the process of discussing options, the Committee made the following key assumptions:

1. That the role of the Members of Council would not materially change during this term of Council
2. That the Town and Ward boundaries would remain the same during this term of Council

Remuneration in the Public Sector Environment

The issue of Council remuneration is a complex one which occupied the Citizen Committee for over five months as it carefully considered all of the information gathered and formulated its recommendations. The Citizen Committee examined issues from both a qualitative and quantitative perspective.

The Citizen Committee took into consideration many factors with respect to Council remuneration. Among them are the following:

Ø Markham Members of Council interviews and questionnaires

Ø Fair value for high quality services delivered (part-time vs. full-time)

Ø Comparison of other Local Councillor, Regional Councillor, Deputy Mayor, and Mayor salaries (where applicable, information was obtained from: Kingston, Aurora, Ajax, Oshawa, Whitby, Newmarket, Oakville, Windsor, London, Richmond Hill, Brampton, Vaughan, Hamilton, Mississauga, Ottawa, and Toronto)

Ø Service Cost per capita for residents (Total Council payroll divided by total population)

Ø Town of Markham rate of growth

Ø Growth of salaries over time (1997-2004)

Ø Consumer Price Index (CPI Toronto/Ontario/Canada vs. Town of Markham economic adjustments)

The Citizen Committee determined that the most relevant comparators were in the York Region environment: Richmond Hill and Vaughan.

Salary

The Citizen Committee has determined that an increase in salary is warranted on the following basis:

Ø To recognize the increasing complexity and demands of a Councillor’s job caused by the growth rate of Markham and related infrastructure changes

Ø To recognize that the job of a Councillor is far in excess of the current part-time commitment

Ø To retain and attract high level candidates with compensation that is in line with similar municipalities in the Region

Ø To establish a consistent and ongoing relationship between the Local Councillor and the Regional Councillor’s compensation, as well as the Deputy Mayor and Mayor

With respect to salary, the Citizen Committee recognized that the Town of Markham, although having input through its regional representation, has no direct control over any salary increases provided to Regional Councillors, Deputy Mayor, and the Mayor by York Region. At the present time, the ratio between a Local Councillor and a Regional Councillor is 57.25%. In reviewing the background material, it was agreed that a fair and reasonable comparison of the Local Councillor to the Regional Councillor would be 60%.

Below is a chart showing the current Local Councillor salaries for Markham, Richmond Hill, and Vaughan.

Local Councillor Salary
Markham	$54,867
Richmond Hill	$56,648
Vaughan	$61,694

Using these three data points, the average Local Councillor salary is: $57,736.

The Citizen Committee used the following process to establish a consistent formula for determining Council salaries in the future.

Ø Increase Local Councillor salary (including the municipal portion of the Regional Councillor salary) to the average of Markham, Richmond Hill, and Vaughan.

Ø Future increases to the Regional Councillor salary will be solely determined by the reimbursed portion from the Region of York.

Ø Adjust the salaries of the Local Councillors, the Deputy Mayor, and the Mayor to reflect the following percentages of the adjusted total salary for the Regional Councillor:

Ø Local Councillor: 60%

Ø Deputy Mayor: 106%

Ø Mayor: 145%

As Council has already approved an increase in 2004, it is recommended that these changes be implemented effective December 1, 2004.

The Citizen Committee has determined that in order to maintain the integrity of the formula, the second source of salary increases should be eliminated. Accordingly, it is proposed that Members of Council no longer receive the yearly increases provided to Non-Union staff (historically those negotiated by CUPE), but rather that the salaries change based on the percentages as indicated above.

In order to ensure appropriate ongoing governance and oversight, the Citizen Committee has determined that no single annual salary increase should exceed 5% without a compensation review.

Severance Pay

Based on the data obtained, it can be concluded that Markham provides less severance pay than the majority of those municipalities and regions offering it. To reflect general labour market conditions, the Citizen Committee has determined that severance pay needs to be increased.

Markham’s severance pay provisions were compared to the following municipalities and regions: Ajax, Aurora, Brampton, Burlington, Durham, Halton, Hamilton, Kingston, Kitchener, London, Mississauga, Newmarket, Niagara, Oakville, Oshawa, Ottawa, Peel, Pickering, Richmond Hill, Toronto, Vaughan, Whitby, Windsor, and York.

Eleven out of the twenty-five (44%) municipalities and regions included offer some sort of severance program to Members of Council. Thirteen out of the twenty-five (52%) do not offer severance pay to Members of Council. The severance program for Vaughan is currently under review.

For those organizations with a severance pay program, the amount varies between twelve and eighteen months. The Town of Markham offers a maximum of six months severance pay. It has been determined that the Regional Municipality of York should be used as a benchmark with respect to severance pay. The Citizen Committee recommends that the current provision be increased from:

One month for every year of service up to a maximum of six months;

TO:

One month for every year of continuous service up to twelve months, prorated for part years of service, and 3/52 of the annual remuneration of the member for every year of continuous service in excess of twelve years, prorated for part years of service to a maximum of eighteen months’ remuneration.

Benefits

The Citizen Committee has determined that the current benefit package is appropriate in the circumstances.

Currently, Town of Markham provides the Members of Council with the same benefits that are received by non-union employees. They include the following:

· Life and Accidental Death and Dismemberment Insurance

· Income replacement plan for short and long term disability

· Group Health Care Plan including semi-private hospitalization, extended health and dental care coverage

· A defined benefit pension plan (OMERS)

· Subsidized membership at the Town’s fitness centres

· Employee Assistance Program

· Wellness Program

In addition to the benefits listed above, Markham Members of Council receive an account for discretionary expenses (Councillors – max. $6,500 per annum, Mayor – max. $26, 536 per annum) for items which may include mileage, gas, advertising, and travel.

The Citizen Committee recommends that the benefits remain unchanged.

Recommendation

THAT effective December 1^st, 2004, the base municipal salary for all Regional Councillors be increased to $57,736 per annum (adjusted total salary is reflective of $57,736 (municipal) and $40,963 (regional) for a total of $98,700 - currently $95,831);

AND THAT effective December 1^st, 2004, the base salary for Local Councillors be increased to 60% of the adjusted total salary of a Regional Councillor to a total of $59,220 (currently $54,867);

AND THAT effective December 1^st, 2004, the base salary for the Deputy Mayor be increased to 106% of the adjusted total salary of a Regional Councillor, to a total of $104,622 (currently $101,323);

AND THAT effective December 1^st, 2004, the base salary for the Mayor be increased to 145% of the adjusted total salary of a Regional Councillor, to a total of $143,115 (currently $138,047);

AND THAT the salaries for Councillors, the Deputy Mayor, and the Mayor be adjusted on an ongoing basis as per the percentages above;

AND THAT all Members of Council no longer receive the yearly increases provided to Non-Union staff (historically those negotiated by CUPE);

AND THAT no single annual salary increase exceed 5% without a compensation review;

AND THAT severance pay for Town of Markham Members of Council be increased to: one month for every year of continuous service up to twelve months, prorated for part years of service, and 3/52 of the annual remuneration of the member for every year of continuous service in excess of twelve years, prorated for part years of service to a maximum of eighteen months’ remuneration;

AND FURTHER THAT all other benefits for Town of Markham Members of Council remain unchanged.

Other Considerations

The Citizen Committee also recommends that the following items be reviewed at a later date:

Ø # of support staff allocated to each Councillor

Ø # of Councillors and wards – a review should be conducted to determine the appropriate number of wards and Councillors required to govern the Town of Markham

Lorne Clodge, Chair	Wilbert Lai
Helen Murray, Vice Chair	Rahul Bhardwaj
Frank Vetere	Drew Gerrard
Deb Weller