The main function of local government is to set policy that provides direction and outlines parameters for the city administration that actually runs the programs and services delivered to residents. When policy is flawed or isn’t properly acted upon, it’s city council’s job to sort out why and, if necessary, provided further direction to ensure the problem is fixed. It appears council has several policy wrinkles to smooth over in the new year affecting the city’s largest spending category — staff wages.
Commissioned over the summer after the previous council had concerns about existing staff compensation strategies, a consultant’s report endorsed Monday outlines 11 recommendations to improve policy and practices for city wages and benefits. The Hay Group report offers rare public insight into city compensation practices, and raises a few troubling questions about existing council-approved policy.
When city wages account for about 48 per cent of overall operational spending, there can be a profound impact on St. Albert taxpayers when policy needs work. Take the rules outlining compensation for non-union staffers. Council has approved guidelines that ensure those employees are paid at the 60th percentile of comparable positions at other municipal governments and organizations in the region (that is St. Albert wages lie somewhere in the middle, with local salaries higher than 60 per cent of the comparables).
While non-union salaries do indeed fall at the 60th percentile, the Hay Report notes the sample employer group — seven municipalities, plus the province and University of Alberta — is so small it’s “not robust enough to provide confidence in the data.” When compared to a broader range of public sector salaries, as the consultant did for the report, St. Albert salaries fall above the 60th percentile in 11 of 12 pay levels. In some cases the variance is very small, 1.9 per cent for the entry-level salary, but in other areas can reach double digits, including 15.7 per cent for mid-level managers.
That kind of discrepancy on its own would not be cause to sound alarms but as the Hay Group advises, the flaws in methodology do not stop there. For starters, the city needs to look outside the Capital region for comparators and put more effort into ensuring market surveys include apples to apples comparisons. That means ensuring Job X in St. Albert is the same job as the one it’s being compared to in Strathcona County, Edmonton, Red Deer and down through the list. Without that apples to apples match, the data city administration is collecting cannot be considered accurate.
Another troubling finding is the value given to job performance when handing out raises at city hall. During discussions with council and city staff, many indicated “there was very little to link compensation with level of performance.” The report does note bonus plans are harder to implement in the public sector and city manager Bill Holtby later confirmed his staff is working on fixing the problem. It’s a fix that needs to happen soon since any perceived gap between pay and performance is a knock on the city’s credibility for providing top value for municipal property tax dollars that, it begs reminding, are on the high end for Canadian municipalities.
Value for tax dollars is the essence of what this report and its recommendations are all about. The most important change could be the last recommendation — to look at the potential for a standing committee on compensation to review remuneration practices. That would go a long way to overcoming the skepticism the previous council encountered last term when handing out wage hikes during an economic recession. A new committee with public representation would help fix a process that will always be flawed and open to conflict of interest criticisms when administration is in charge of doing all the legwork to recommend raises for itself. There’s no question city hall needs top-quality, motivated employees, but council needs to put the public back in the public sector for the public good.
