Municipal salaries need limits
Times Colonist Editorial
September 28, 2014
Vancouver’s city manager makes twice what the prime minister of Canada earns. Some Crown corporations in B.C. justify bloated executive salaries by comparing themselves with multinational corporations such as Coca-Cola. Almost half the City of Victoria’s staff are paid $75,000 or more.
Revelations like these appear in an incendiary new report on public-sector compensation. The consulting firm Ernst & Young was hired by the provincial government to conduct the review.
While the company looked at a wide range of public agencies in B.C., including ministries, Crown corporations, universities and health authorities, the area that stands out is local government.
Ernst & Young could find no consistent approach to the setting of pay scales in this sector. Rather than using comparable jobs in other fields as a benchmark, some municipalities are basically taking a shot in the dark. And when benchmarks are used, they’re often cherry-picked to find the highest rate available.
One result is that town councils pay their staff quite a bit more, on average, than the provincial government. For example the city manager in Victoria (budget $209 million), makes more than the top executive in the provincial education ministry (budget $5.3 billion.) This misalignment between pay and responsibilities is visible across all categories of employment, from senior management down to the clerical level.
The absence of a coherent compensation scheme has also led municipalities to hike their pay scales far more than other areas of the B.C. public sector.
Between 2001 and 2012, provincial government employees received salary hikes totalling 19 per cent. But municipal workers got a 38 per cent lift, well above background inflation of 23 per cent.
As a result, the proportion of council employees who make more than $75,000 has escalated in recent years.
It would be unfair to paint the Ernst & Young report as primarily a critique of municipal governance. Plenty of hard questions are asked of Crown corporations and universities. Some of the executive compensation schemes in these organizations are scandalous.
Nevertheless, with 162 municipalities in B.C., this sector demands the most immediate attention. So what can be done?
At a minimum, the province should work with local government to develop a properly benchmarked compensation plan that all would use. But the Ernst & Young report goes further.
As it points out, the small voter base in most municipalities, coupled with low turnouts at elections, creates a significant vulnerability for local politicians. It doesn’t take many disaffected employees to swing a close election.
In effect, the report concludes, expecting mayors and councillors to hold the line on salaries might be asking too much of them.
The company also warns that any attempt to align salaries across the broader public sector would be strongly resisted by municipalities and unions.
For these reasons, the report proposes what are called “enforcement” measures. The auditor-general for local government could be asked to examine municipal compensation.
And if this fails, the province might consider using financial levers to gain compliance. That would mean withholding transfer payments or grant funding if salary guidelines are exceeded.
Whether Premier Christy Clark and her colleagues would employ such strong-arm measures is not known. Yet there does appear to be compelling evidence that inequities in compensation have grown up across the public sector.
Left unchecked, this will eventually bleed talent out of the lower-paid areas. It also hits taxpayers where it hurts — in the wallet.
Fortunately, we have a say in this. There are municipal elections on Nov. 15. No doubt there will be call-in shows and town hall meetings where candidates face the voters.
It might be useful to have this issue raised and properly debated. Readers can Google B.C. Public Sector Compensation Review, and decide whether Ernst & Young made their case.
copywriter Times Colonist
NOTE: The full report is here: BC Public Sector Compensation Review
Times Colonist Editorial
September 28, 2014
Vancouver’s city manager makes twice what the prime minister of Canada earns. Some Crown corporations in B.C. justify bloated executive salaries by comparing themselves with multinational corporations such as Coca-Cola. Almost half the City of Victoria’s staff are paid $75,000 or more.
Revelations like these appear in an incendiary new report on public-sector compensation. The consulting firm Ernst & Young was hired by the provincial government to conduct the review.
While the company looked at a wide range of public agencies in B.C., including ministries, Crown corporations, universities and health authorities, the area that stands out is local government.
Ernst & Young could find no consistent approach to the setting of pay scales in this sector. Rather than using comparable jobs in other fields as a benchmark, some municipalities are basically taking a shot in the dark. And when benchmarks are used, they’re often cherry-picked to find the highest rate available.
One result is that town councils pay their staff quite a bit more, on average, than the provincial government. For example the city manager in Victoria (budget $209 million), makes more than the top executive in the provincial education ministry (budget $5.3 billion.) This misalignment between pay and responsibilities is visible across all categories of employment, from senior management down to the clerical level.
The absence of a coherent compensation scheme has also led municipalities to hike their pay scales far more than other areas of the B.C. public sector.
Between 2001 and 2012, provincial government employees received salary hikes totalling 19 per cent. But municipal workers got a 38 per cent lift, well above background inflation of 23 per cent.
As a result, the proportion of council employees who make more than $75,000 has escalated in recent years.
It would be unfair to paint the Ernst & Young report as primarily a critique of municipal governance. Plenty of hard questions are asked of Crown corporations and universities. Some of the executive compensation schemes in these organizations are scandalous.
Nevertheless, with 162 municipalities in B.C., this sector demands the most immediate attention. So what can be done?
At a minimum, the province should work with local government to develop a properly benchmarked compensation plan that all would use. But the Ernst & Young report goes further.
As it points out, the small voter base in most municipalities, coupled with low turnouts at elections, creates a significant vulnerability for local politicians. It doesn’t take many disaffected employees to swing a close election.
In effect, the report concludes, expecting mayors and councillors to hold the line on salaries might be asking too much of them.
The company also warns that any attempt to align salaries across the broader public sector would be strongly resisted by municipalities and unions.
For these reasons, the report proposes what are called “enforcement” measures. The auditor-general for local government could be asked to examine municipal compensation.
And if this fails, the province might consider using financial levers to gain compliance. That would mean withholding transfer payments or grant funding if salary guidelines are exceeded.
Whether Premier Christy Clark and her colleagues would employ such strong-arm measures is not known. Yet there does appear to be compelling evidence that inequities in compensation have grown up across the public sector.
Left unchecked, this will eventually bleed talent out of the lower-paid areas. It also hits taxpayers where it hurts — in the wallet.
Fortunately, we have a say in this. There are municipal elections on Nov. 15. No doubt there will be call-in shows and town hall meetings where candidates face the voters.
It might be useful to have this issue raised and properly debated. Readers can Google B.C. Public Sector Compensation Review, and decide whether Ernst & Young made their case.
copywriter Times Colonist
NOTE: The full report is here: BC Public Sector Compensation Review