Council Compensation Update

8 December, 2009

Background
A November 1, 2009 increase to the HRM Councillor and Mayor stipends completed a seven-year process set out in the 2004 Report of the Citizen’s Commission on Remuneration for Members of Council for HRM. The culmination of this seven-year process was to result in the stipend being at the “median rate” as outlined in the formula described in the Report.
The “median rate” is described as 50 per cent of the difference between the weighted average of stipends from the eight comparator municipalities and the highest stipend provided in the eight comparator municipalities.

This year was the completion year for the process. A review was conducted to verify that the HRM stipends were now at the “median rate”. This review revealed that an error occurred in the application of the formula at the initial calculation stage in November 2005. It was then replicated each subsequent year. Specifically, due to lack of clarity in the Report, HRM has been prorating 50 per cent of the difference between the weighted average rate and the highest rate instead of prorating the entire difference.

Consequently, the stipends for Council, Deputy Mayor, and Mayor have not been as far above the weighted average as they should have been. For example, in 2006 only 5 per cent of the difference above the weighted average instead of 10 per cent, in 2007, 10 per cent of the difference instead of 20 per cent, 15 per cent in 2008, instead of 30 per cent, 20 per cent in 2009, instead of 40 per cent, and 25 per cent in 2010, instead of 50 per cent of the difference above the weighted average, or what was defined in the Report as the "median rate".

Action
As a result of this error, Councillors’ pay was impacted. They will each receive an amount from HRM to correct the error. Past Councillors who may have been affected if they served on HRM Council during a portion of that time period will also receive payments.

Revised salaries for Mayor and Councillors are as follows:

Mayor: $139,330 (previously revised for this year to $136,550).
Council: $71,206 (previously revised for this year to $67,355).

Total cost for the retroactive payments and salary increases for this year is $246,096.16. Budget for these payments will come from this year’s budget. Specifically, from budget allocated for salary adjustments.