LAC STE. ANNE COUNTY 2019 TUFF TIMES AHEAD?

LAC STE. ANNE COUNTY 2019 TUFF TIMES AHEAD?

After several years of taxpayer outcry over questionable and what many considered to be out right  irresponsible spending by the County Council elected in October 2013 and the newly appointed Administration we went into the 2017 election hoping for some REAL change. 

While the incumbents defended and even applauded all of their actions, hopeful candidates were far more concerned. Communication, or the lack of, was a major issue everyone felt needed to be addressed.  They also questioned how and why the Budget appeared to have gotten so out of control.  Hefty budget increases directly linked to the highly contested new Administration building were alarming. The number of added  administrative management positions, new office staff and a very significant spike in salary and wages for administration were concerning. 

While the list was long, the exorbitant increase in the CAO salary and extensive employment package was front and center.  Regarding how well our newly elected council has managed to address two of these issues is indeed troubling. 

After several forums, knocking on doors, 'listening ' to ratepayers and making all kinds of promises... this is what they have managed to accomplish.

Chief Administrative Officer - Mike Primeau 

Base Salary 2017 - $146,000   Plus $2,000. per month Travel equaling $170,474 per year  plus Benefits and Allowances  (pension, benefit package etc).

Total -$204,067

Base Salary 2019 - $ 205,000  Plus automatic cost of living TBD (but let's say 1% )- $207,050.Plus Benefits and Allowances which equate to approximately 20% - $41,410. 

Total - $248,460

Since they were elected  October 2017 this Council has adjusted Mr. Primeau's' contract:

• Removed the $2,000. Per month "Travel allowance " ....However they included it directly in his Salary.  
• They removed the automatic salary increase of $5,000 per year and made it $10,000. per year instead. 
• The annual automatic consumer price index increase has remained. 
• The termination clause has effectively remained the same and would require TWO year notice or Severance in lieu.
• Holidays remain at 6 weeks which is what it was started at.

They have managed to give this CAO even more salary increases totaling approximately $36,500. in base pay and an increase of approximately $44,400.00 total salary (including Benefits and Allowances).....21% over 2 years!

It is important to remember that this CAO had absolutely zero years prior experience as a Chief Administrative Officer when he was given the position in October 2012.

Keep in mind that these figures do not include any "expense" claims such as mileage, food, hotel or airfare allowances.

With the help, wisdom and vision of two councils, this CAO, with 6 years experience is now receiving 42% more than when he signed his first contract effective January 2013....six years ago and 68% more than the 37 year veteran who retired before him.

We know approximately what this CAO is being paid or "making".... how much he is "earning"  is still being debated.

This council will tell you how thoroughly the Administration salaries have been reviewed,  investigated and compared to other Counties and that while admittedly a few employees were higher than average, the Administration was on par....if not low.

We ask "According to who"?  Does anyone really believe that the many prior councils,  over the past decades did not do the same comparisons?  Is this Council saying past councils were "underpaying" their employees?  

We need to remind this Council that several of their members have held seats on LSAC Council for terms prior to this and the term before this one. In fact, Reeve Blakeman , Mr. Olsvik and Mr. Giebelhaus all sat on councils that routinely denied requests for salary increases...right up to and including 2012. 

So what has changed??? Could it possibly have to do with who and how this information is being brought to council? How is it the comparisons would be so 'different' from only a few years ago? How did 'certain' employee salaries get out of hand?  Was council not part of establishing other management and senior position salaries? If not.....who was? 

The substantial increases to Mr. Primeau's salary are not the only concerning increases in remuneration.  

After being newly elected in 2017, this council voted themselves an increase in salary almost immediately in 2018. The explanation, or excuse rather, was that there were ever increasing numbers of committees and meetings.  

The previous council had opted for a uniform annual "salary" based format as opposed to the previous "per diem" format.  Which effectively paid all councillors the same wage annually regardless of how many meetings each might attend.  The Reeve and deputy reeve received more to compensate for more obligations. Mileage, meal and hotel allowances remained in place.  This was a decision that did not sit well for certain councillors who were facing what would amount to a pay cut. However for other councillors, who did not to sit on as many committees, for whatever reason... it meant a substantial pay raise without the burden of extra time, responsibility or commitment . 

Looking closely at the long list of committees in the winter edition  of 2018 Year in Review... most of these committees have in fact existed for many years. It is important to note that many only meet a few times a year. We might assume the move to a flat rate salary was to offset the inclination of some councillors to jump on every committee possible in order to collect as many per diem as possible. 

The base rate of $40,000. per year that was determined by the Council less than one year prior was apparently insufficient for the new council.

Fast forward one year, on January 25, 2019 council moved to increase their salary....yet again.

This time our council tells us it is because of the federal changes to the tax exemption law which had allowed for "one-third tax-free exemption for Elected Municipal Officials across Canada".  Although it was announced last year this benefit remained in effect until January 2019.  Perhaps this played into part of the self serving raise council prescribed themselves in 2018.

A bit of history - Bill C-44 was introduced by the Federal Government under the Federal Income Tax Act in 1946.  It was implemented to compensate in lieu of claiming 'out of pocket' expenses related to carrying out their duties (such as mileage ).  This was a time when many provinces set the remuneration of Municipal Councillors.  It was also a time when $5.00 per diems were not uncommon.  It was intended as a compensation INSTEAD of expense claims and allowances.... ONE OR THE OTHER! 

Suffice to say...this is an obsolete law that clearly has been bent, misinterpreted and misused for decades!  It took years but eventually provincial Municipal Acts allowed municipalities the option to choose.  Many municipalities across Canada declined the exemption and one could guess possibly because expenses allowances exceeded the tax allowance or because for very high paying positions such as the Mayor large city, the tax exemption exceeded....by far,  what actual expenses amounted to.  The point being Bill C-44 no longer served its original purpose.  It clearly gave an unfair benefit to elected officials that was never extended to 'regular' taxpayers.  It was eliminated...and rightfully so.

Our council, along with a long list of other Municipal and School elected officials across Canada, chose to raise their Base Salary in order to 'compensate' for the difference they will now pay in "extra" taxes. It can be argued that our elected official will now pay the same tax as the rest of us!

In the case of LSAC, our elected officials have in actuality been "double dipping" for years. They have for a least 40 years (if not always) received fair compensation for expenses for mileage, meals, hotel rooms, airfare etc.  Our council ALSO received a tax exemption on one third of their wage.

Expenses have never been taxable because it is assumed to be "reimbursement" for out of pocket expenses.  However when expenses are not supported with 'receipts' but are distributed at a predetermined set "rate" we end up with Councillors and Administration or anyone getting expense allowances receiving what could amount to unwarranted payments......TAX FREE!  Food allowances and hotel allowances are handed out whether or not that person even checks into the hotel or rather, chooses to stay and eat at Aunt Emma's.  In fact they don't need to attend ANY session besides the hospitality room. Rarely will a "report" of any kind be presented at council. This is common and prevalent and not exclusive to this council.

The truth is....the necessity of having ALL of the Council attend meetings or even conventions is rare.   

All of this being said, this council has managed to:

• Increase their base salary of $232,774. (2017 Total) plus Benefits and allowances of approximately 20% to 378,000. (2019 Total) plus Benefits and Allowances.

• Expense allowances for mileage, food, hotel, airfare etc. are paid over and above. An increase of $145,226.00 or 62% over 2 years remember that a respective increase in the Benefits and Allowances like pension contributions would also be incurred by the taxpayer. 

Are all these salary increases warranted or are there "other" reasons for this comfortable collaboration between this council and upper management? 

All these salary increases come during what has proven to be one of the worst economic downturns many of us can remember.  Our LSAC 2019 Budget will prove to be a most interesting Budget and one LSARA is looking forward to review.

This information was determined from public documents such as LSAC Audited Financial Reports, information supplied to and published by news papers and public information pertaining to LSAC, and the CAO contract and salary provided by LSAC.  To the best of our ability it is as accurate as possible. The 2018 LSAC Financial Statement was not available at the time of publishing.

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