Compensation for Local Government Politicians

Compensation for Local Government Politicians

 

At time of writing, several Provincial MLA’s are retiring or are ‘being retired’ and the value of their pensions and severance pay is being reported.  This tends to increase the comments to me when I’m out in the community such as ‘how’s the retirement going, are you enjoying your pension?’

I tend to lightheartedly reply that I’m not very good at retiring and maybe that this is because I don’t have a pension.  This shocks almost everyone – they assume that my 28 years on Saanich Council - 18 of them as a fulltime Mayor - created a pension benefit.  So let’s get this out of the way: the only municipal council in BC which is part of the Municipal Pension Plan is the City of Vancouver.

Every local government has annual compensation for elected officials and many have some benefits such as extended health and dental.  Some in Metro Vancouver have a contribution to a RRSP plan and a very few have a ‘transition pay’ upon leaving office.  Put this discussion on a Council agenda and controversy usually follows – so that is one of the reasons for the ‘hodge-podge’ around BC.  Discussing how much you pay yourself can be very unpopular.

In this blog post, I will dare to discuss components of compensation for local government politicians and offer some opinions.  Be warned!

1.    Compensation

When I ran for Alderman in 1986 I did not know how much the pay was.  I had a good income from our family tire business and it would not change if I was elected. 

This was not true for many others.  Many who worked in the private and public sector ended up with reduced pay or used up vacation time.  I recall an accountant telling me he was not running again because he couldn’t afford to keep losing so many billable hours.

So this time and service, in my opinion, should be compensated – but by how much?

The vast majority of local government elected positions are part-time ‘jobs’ and should have part-time pay.  Those positions that require full-time hours – at the expense of any other employment – should get full-time pay.  I also believe though that those who get elected to a part-time position but make it their full-time passion should still only get part-time pay.  I make this point since there are many who devote long hours to their community over and above what is ‘required’.

The actual amount of pay varies dramatically within BC based on population, the size of the annual budget or just historical practice – but it really is the ‘hodge-podge’ that I referred to earlier.  Some small communities pay a pittance – some large centres pay their Mayors more than a MLA.  The Union of BC Municipalities recently issued a guide for local governments on compensation but it just suggested the means by which decisions are made; that is, hiring a consultant or appointing a citizens’ review.  I would have preferred having a guide based on population and a percentage of MLA salary to help Councils choose from within a ‘pay schedule.’

2.    Benefits

I appreciated having health and dental coverage while I was a full-time Mayor and had no other employment.  I even think that the part-time Mayor and Councillor positions should be able to join the plan offered to employees.  I’d go so far as to advocate that the premiums should be part of the compensation package but I believe having access to the plan is becoming more commonplace.

3.    Pensions

This is a hard one to be objective about.  Certainly it was difficult to face having no pay, no benefits and no pension two weeks after my last election but I knew that was the circumstance going in – I knew that each and every time I put my name on a ballot.

I’m not an advocate for politics being a career.  I always urge candidates to have a career outside of politics so that you have something when the politics comes to a close – no matter whose choice that is.  I am also not an advocate for term limits but do believe healthy turnover is appropriate and would be concerned that adding a pension to local government compensation may be an incentive for some to stay in office in order to increase their pension benefit.

However, I’ve spoken with those whose employment includes a pension and struggle with how many years they can afford to be out of their plan in order to serve full-time in local government office.  Getting elected Mayor literally reduces their income for the rest of their life.

I do think those communities that include a RRSP contribution as part of their compensation package are on the right track though.  It seems to be an ad-hoc decision at some Metro Vancouver municipalities and I think it is a practice that could be formalized with a best practice guide.

4.    Transition Payments

This was an incredibly controversial topic recently at the Metro Vancouver Regional District – however, I think it was as much about the lack of transparency as it was about the subject itself.  Notwithstanding this political reality, I will repeat my own circumstance: after 28 years in office and at 60 years of age my entire income and benefits disappeared two weeks after my last election. 

I promised my wife on election night that I would be back on my feet after 3 months but it actually took 6 – it takes time to find opportunities, go through interviews and screening, let alone be successful – all the more so when you are older.  So, for example, one week of compensation for every year served up to a maximum of 12 weeks would have helped me and certainly would not have been a significant item in the municipal budget.  Obviously, this is a fraction of the package that is provided at the provincial and federal governments.

Summary

So there you have it – a biased view of a topic that no one likes to see on a Council Agenda.  Yet I believe we should not shy away from these issues.  Left neglected, low compensation leaves elected office as a hobby for those who can afford it; too high and taxpayers rightfully revolt.  And, as naïve as this sounds, a healthy discussion on these financial realities might lead to a menu for local governments on pay, benefits, RRSP contributions and transition payments.


 Check out my website at http://frankleonard.ca/ for information on Local Government and Consulting

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