Coun­cil post­pones stipend in­crease de­ci­sion to New Year

Pub­lic pro­vides in­put, sug­ges­tions on stipend in­crease

The Victoria Standard - - Local News - CAROLYN BAR­BER

A 2004 coun­cil mo­tion has forced the mu­nic­i­pal­ity to post­pone its de­ci­sion on whether or not to in­crease coun­cil­lor stipends to make up for changes to the Fed­eral In­come Tax Act.

Ef­fec­tive Jan. 1, 2019, coun­cil­lor stipends be­come fully tax­able. Pre­vi­ously, one-third of a coun­cil­lor’s stipend was tax-free. Coun­cil hoped to make its de­ci­sion at the Dec. 19 spe­cial meet­ing which in­vited pub­lic com­ment on the mat­ter. How­ever, War­den Bruce Mor­ri­son an­nounced the dis­cov­ery of a mo­tion car­ried at the Jan. 5, 2004 coun­cil meet­ing, stat­ing that Coun­cil stipend in­creases are to co­in­cide with in­creases re­ceived dur­ing Union ne­go­ti­a­tions. The War­den in­tro­duced a mo­tion on Dec. 19 to re­scind the 2004 mo­tion so that the in­crease in coun­cil stipend will no longer be tied di­rectly or in­di­rectly with union ne­go­ti­a­tions. Coun­cil will vote on the mo­tion at the Jan. 7, 2019 meet­ing.

In an­tic­i­pa­tion of the up­com­ing stipend de­ci­sion, Chief Fi­nan­cial Of­fi­cer Alix Red­den re­viewed three op­tions for coun­cil­lors to mull over: 1) no change to the gross stipend re­sult­ing in a de­crease in take home amount, 2) in­crease the gross stipend amount by 12% to main­tain cur­rent take home amount, or 3) de­fer the de­ci­sion to bud­get de­lib­er­a­tions for fis­cal 201920.

Cur­rent gross an­nual stipend amounts are as fol­lows (per­cent­age change in take home pay as a re­sult of the tax change fol­low in brack­ets): Coun­cil­lor - $20, 892 (-13% for coun­cil­lors with CPP de­duc­tion, -11.7% for coun­cil­lors w/o CPP de­duc­tion), Deputy War­den $22,440 (-12.7%), War­den - $37,916 (-15%).

In­creas­ing the gross stipend amount by 12% re­sults in the fol­low­ing per­cent­age change to take home pay: Coun­cil­lor - $20, 892 (-0.6% for coun­cil­lors with CPP de­duc­tion, 1.6% for coun­cil­lors w/o CPP de­duc­tion), Deputy War­den - $22,440 (-0.4%), War­den - $37,916 (-3.4%).

A 12% in­crease would cost the county $5,571 for the re­main­der of fis­cal 2018-19 and $22,285 for fis­cal 2019-20 and on­ward.

War­den Bruce Mor­ri­son said he would have pre­ferred the tax changes to come at the be­gin­ning or end of coun­cil­lor term rather than mid-term. Coun­cil­lor Paul Mac­neill sug­gested the tax change would be a good op­por­tu­nity to re­view the re­mu­ner­a­tion of elected of­fi­cials across Canada. Coun­cil­lor Mer­rill Macin­nis ex­pressed con­cern that a de­crease in gross stipend amount might dis­cour­age peo­ple from run­ning for of­fice.

Bad­deck res­i­dent Nor­man Math­e­son ques­tioned a stipend in­crease at a time when so many con­stituents are fac­ing fi­nan­cial hard­ships.

Re­tired char­tered ac­coun­tant Mer­rill Buchanan of Bad­deck spent his ca­reer work­ing for a crown cor­po­ra­tion. He com­mended coun­cil for wel­com­ing pub­lic in­put on the mat­ter. He does not be­lieve a stipend in­crease to ad­dress the in­come tax change should be ac­cept­able to coun­cil­lors, nor does he be­lieve it will it be ac­cept­able to the gen­eral pub­lic. He of­fered a two-pronged ap­proach to ad­dress­ing the cur­rent cir­cum­stances.

The pre­vi­ous non-tax­able por­tion of stipends was pro­vided for “non-ac­count­able” and “non-re­portable” ex­penses, both phrases Buchanan re­ferred to as “red flags” in this day and age. Buchanan be­lieves his ap­proach will “lead to a much more de­fend­able and sup­port­able ba­sis for a fair and ap­pro­pri­ate ad­just­ment to the stipend.”

Firstly, to off­set some or all of the tax im­pact re­sult­ing from the in­come act tax changes, Buchanan pro­posed that ex­penses duly in­curred by coun­cil­lors con­tinue to be re­im­bursed by the mu­nic­i­pal­ity. Qual­i­fy­ing ex­penses should be de­ter­mined with nec­es­sary amend­ments made to ex­pense poli­cies. Trans­par­ent dis­clo­sure of ex­penses should be main­tained.

Se­condly, he pro­posed a thor­ough re­view of stipends paid to coun­cil­lors in the mu­nic­i­pal­ity in­clud­ing re­search by an in­de­pen­dent group to com­pare mu­nic­i­pal stipends across the prov­ince.

The next meet­ing of Vic­to­ria County Mu­nic­i­pal Coun­cil will be held at the Court House, Bad­deck, on Mon­day, Jan. 7, 2019, be­gin­ning at 5:00 p.m. Dis­cus­sion of coun­cil stipends is on the agenda.

Newspapers in English

Newspapers from Canada

© PressReader. All rights reserved.