From taxpayers’ standpoint the mayor’s request to conduct a third-party review of salaries of non-union staff (Gazette, April 24, 2010) is a step in the right direction, but much more needs to be done.
In November 2009 the Canadian Federation of Independent Business (CFIB) produced a report titled “Alberta Municipal Spending Watch, Trends in Fiscal Sustainability, 2000-2007” in which the authors concluded that “municipal operating expenditures in Alberta continue to increase at an unsustainably high rate.” Based on data to the end of 2007, the report’s authors ranked the City of St. Albert among the worst performing municipalities in the province with a fiscal sustainability gap of 2.24. In other words, St. Albert’s spending increased at a rate greater than twice that warranted by increases in the city’s population plus increases due to inflation.
With 45 per cent of the city’s total operating costs attributed to salaries and benefits, there is a need to conduct a complete examination of compensation policies including how salary levels are set and public disclosure policy.
As indicated by city manager Bill Holtby, city staff compensation levels are set at levels higher than comparator mean or average. Furthermore, the city's current pay scales are compared only to other mid-size Alberta municipalities and salaries for comparable positions with the provincial government and University of Alberta. The policy of setting non-union staff wages at above-average levels is justified on the basis of promoting retention and recruitment of employees.
Over the past two years, during a period of low inflation, St. Albert’s non-union staff received a combined average 8.4 per cent increase in salaries. Given this city’s steadily increasing payroll cost, the time has come to use a much broader comparator that includes salaries and benefits paid in the private sector.
Authors of the CFIB report compared public and private sector wages and benefits, and found that as of 2007, on average “municipal workers in Alberta earn 7.2% more than their private sector counterparts in the same job.” With benefits, the premium soars to 31 per cent. While workers in the private sector are losing jobs and pensions, civic government positions offer job security, lucrative pay and generous benefits. In this context, the argument that the city has to offer above-average salaries to keep and attract employees is no longer applicable.
On the other hand, if lower pay increases induce some of St. Albert’s current non-union staff to seek greener pastures elsewhere, that could be a good thing. According to the city’s financial results, from 2002 to 2008 city staff levels increased by 52 per cent and total salary cost increased by almost 85 per cent to $45.9 million.
The fact that administration produced the report recommending its own salary increases and the information was reviewed by council in camera, shielded from public view and discussion, also warrants criticism. Given St. Albert’s status as having the highest property taxes in the province, taxpayers can be excused for wanting to have input into how their tax dollars are spent.
In terms of timing, the mayor and council should have initiated the salary review earlier, preferably before approving the announced increases. I don’t suppose the timing of the mayor’s decision to request the review has anything to do with the upcoming election?
Keller, St. Albert
