SUNDRE — In recognition that town staff did not receive a cost of living adjustment in 2021, the new council agreed an increase was warranted for the coming year.
However, the 4.3 per cent increase proposed by administration during the regularly scheduled Dec. 6 meeting conducted in-person as well as by teleconference, was not unanimously supported and led to a lengthy debate that ultimately ended up with council agreeing to a three per cent bump.
Chris Albert, director of corporate services, told council that administration bases its recommendation on figures outlined by Statistics Canada in the Consumer Price Index (CPI).
“Administration’s recommendation would pretty much always be a recommendation to match that CPI,” said Albert during a preamble prior to council’s debate on the matter.
“Unless there are very unusual circumstances, we would typically always recommend that council match that inflation rate."
Outlining reasons for that, Albert said adopting a rate lower than the CPI puts the town in a position where it will eventually have to play catch up in the future with larger increases upon conducting salary reviews.
“The other reason that we like to stay with that inflation rate, (is) if we choose a rate lower than that, the staff’s wages are then not keeping up with inflation,” he said. “This of course does affect staff morale.”
Additionally, he continued, that creates uncertainty not only for staff but residents as well.
That all being said, he also told council administration is cognizant of the challenging reality faced by a number of residents.
“We do understand that some individuals are in difficult situations in terms of the ratepayers in the community,” he said. “We also understand that nobody wants tax increases.”
To that end, he said administration strives to balance both sides of that equation.
Albert also wanted to differentiate between a cost of living adjustment and council’s budget deliberation.
“Council’s decision on COLA is a separate decision from the budget discussion. So, regardless of council’s decision on COLA, departments are required to work within their budgets,” he said.
Furthermore, over the course of the past three going on four years, Albert said staff have and must continue to work hard to keep all of the department’s budgets in line, regardless of cost of living adjustments.
Responding to a question submitted by Coun. Todd Dalke prior to the meeting, Albert provided clarification on the impact of cost of living adjustments on the town’s salary scale.
“We have a grid system for every single position, and when COLA is approved by council, that COLA percentage is applied to every value in the grid system,” said Albert.
Then, as of Jan. 1, the new grid rates apply to each individual employee, regardless of where they are on the grid. So, if a member of the staff is for example at Step 3, they remain at the same level on the grid, but with the new rate. That isn’t to be confused with a regular raise that bumps an employee up a step on the salary grid based on their experience, knowledge and performance, he said.
Opening the floor to discussion, Coun. Owen Petersen moved the recommended motion to approve the 4.3 per cent increase to the 2022 cost of living adjustment.
Coun. Jaime Marr sought to confirm that about half of the town’s staff have already reached the grid’s maximum level with no further potential for a raise, and that the cost of living adjustment is the only way for those employees to see a difference in their compensation.
“That is correct,” Albert confirmed, adding 17 of 32 members of the staff have reached the grid’s maximum level.
Coun. Chris Vardas asked what the government sets for its cost of living adjustment, which he believed to be around two per cent, and added 4.3 per cent “is the highest I’ve seen seen.”
The roughly two-plus per cent figure typically stems from the Bank of Canada, which strives to keep inflation at a rate of about 2.5 per cent, said Albert.
“That 2.5 per cent assumption is what we build into our budget, knowing that’s where the government tries to keep inflation,” he said, adding that increase includes other applicable items in the budget, not just salaries.
Elaborating on where administration came up with its recommended 4.3 per cent increase, he said Vardas was correct and that such high rates of inflation in Canada have not been experienced in almost 20 years.
“This 4.3 per cent comes directly from Stats Canada,” said Albert, adding the rates are specific to the province and based on an average “basket of goods” a household would typically purchase in their daily lives, including for example fuel, heating costs and food.
Vardas followed up to ask whether staff received a COLA last year.
“There was no increase last year,” said Albert.
Marr commented for the record to say cost of living adjustments are a great way to increase staff morale, and added she was sad to hear employees did not receive one last year.
Coun. Connie Anderson said that while he could support an increase in the range of 2.5 per cent, that the 4.3 per cent recommended by administration was too much.
“I know what’s happening in my shop for wages,” said Anderson, who owns and operates Integra Tire.
Dalke, who owns and operates the local Fountain Tire, agreed with Anderson, and also expressed support for an increase around 2.5 per cent.
Coun. Paul Isaac wanted to know what kind of impact the proposed 4.3 per cent increase would have on the budget when considering that 2.5 per cent is what had been forecast when the four-year budget was developed and approved. The councillor also asked what approach other regional municipalities were taking.
Albert said the originally budgeted 2.5 per cent increase translates to some $70,000, and that this figure would increase to about $125,000 if the 4.3 per cent increase were approved by council, a hike of roughly $55,000.
With regards to what other communities have done, he said Mountain View County approved a 2.5 per cent increase, adding the county had also approved a more than one per cent bump last year, when Sundre’s council at the time decided against any increase.
“There is that to consider,” he said, adding that other townships in the area, to his understanding, had only begun preliminary discussions on the matter but had yet to officially decide.
Isaac and Mayor Richard Warnock, who both served on the last council, told their new colleagues the difficult decision not to provide a cost of living adjustment increase in 2021 stemmed from a desire not to layoff any staff during the height of COVID-19.
The mayor, who based on what he heard spoke in favour of supporting the 4.3 per cent increase, added that staff worked hard and did not abandon the municipality to pursue work elsewhere.
But he also wanted to know if staff would be able to work within the budget without having to consider layoffs if the increase was approved.
“I believe yes, absolutely,” said Albert, adding administration has throughout the course of the four-year budget cycle on average managed to keep costs below the CPI without any major financial fluctuations.
“And we have over the course of the three previous years, due to various reasons, actually seen some surpluses,” he added.
Calling 2021 an “exceptional year,” Petersen said he wasn’t particularly surprised by the 4.3 per cent in light of soaring inflation. Investing in town staff is crucial not only in terms of retention but also ensuring consistent service provision to the community, he said, speaking in favour of approving administration’s recommendation.
“We’ve already budgeted for 2.5 (per cent) of it,” he said. “So, this isn’t a 4.3 (per cent) hit, this is a less than two per cent change.”
Although there was a consensus among council to approve a cost of living adjustment, Petersen’s motion was defeated with Dalke, Anderson, Vardas, Issac and Marr opposed.
Vardas then moved for council to approve a cost of living adjustment of three per cent, which carried with Dalke and Warnock opposed.
