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