The net take-home pay for members of Estevan city council will remain the same for the rest of this term, but for that to happen, council’s pre-tax wages are going to increase.
Council decided at its meeting on Monday night to increase its gross annual wages. It means Mayor Roy Ludwig’s pre-tax salary for this year will increase from $45,844 to $52,730, or $6,886, but his take-home pay of $36,484 will remain the same.
Councillors’ pre-tax wages will increase from $15,281 to $17,375, or $2,094 for this year, and their net take-home pay will be $13,109.
Councillors Shelly Veroba and Greg Hoffort voted against the motion.
Council has been discussing the issue after the federal government decided to eliminate the non-accountable allowances tax exemption that municipal elected officials, school board trustees and others have enjoyed for decades. Council members’ entire salary is now taxable, and the loss of the exemptions has reduced their wages by more than 10 per cent.
“They thought that their pay should be kept whole, which … when they got elected, is … what they’re getting,” said Ludwig.
Elected officials in other communities have been tasked with similar decisions. While the South East Cornerstone Public School Division’s board and some councils have opted not to make their wages whole, many councils, particularly those in markets similar to Estevan, decided to increase their pre-tax wages to keep their net pay the same.
Weyburn, Warman and Yorkton decided to make their wages whole this year, while North Battleford opted to spread it out over 2019 and 2020. Swift Current decided to keep their pre-tax salary the same and take a hit on net wages, but their mayor and council make more than other municipalities.
Ludwig said he’s not concerned with a public backlash with their decision.
“We’ll wait and see how our public, how our community receives this. We did speak to the other cities, and they had commented that they had very little backlash by keeping it whole.”
A local remuneration committee, comprised of Monica Kovach, Kevin Smith and Bernadette Wright, suggested council should receive an increase in pre-tax wages, but it would only represent half of the money necessary to make their wages whole.
It would have pushed Ludwig’s annual income up $3,443 per year, and a councillor’s salary by $1,047 annually.
The recommendation was made at council’s meeting on March 25. Each council member present asked questions of the committee, with Veroba being the one council member opposed to a gross wage increase.
Council tabled the committee’s recommendation to the April 22 meeting, since Hoffort wasn’t in attendance for the March session.
The mayor recognizes it could be difficult to get people to serve on the remuneration committee in the future, but he also pointed out that the committee wasn’t unanimous in their recognition.
It could also be the final time that council has a remuneration committee. In a report to council, city manager Jeff Ward released figures on tying council’s wages to a MLA’s base salary, which is $98,395.
The report suggested paying the mayor half of the MLA, which would be $49,197 in 2019, while the councillors would each make one-third of the mayor, or $16,399.
Those stipends would be less than what council would make this year after council’s vote on Monday night.
It was noted that this is a growing trend in municipalities, and would eliminate the need for a remuneration committee.
Ludwig said he prefers connecting his wage to that of the MLA, but he also respects council’s decision to not select that route.
“Take that percentage of MLA. If they get an increase, we get one. If they don’t, we don’t. If they get a decrease we take a decrease.”
He pointed out the issue of non-allocated allowances has taken up a lot of their time.
“It’s gone back and forth, with different suggestions. It has definitely been discussed a lot, and with council members, with members of the public, with differing opinions, as you can expect.”
