How much do local governments spend on salaries?
The West Kootenay Advertiser looked at the payrolls of local cities and regional districts as well as school districts — although direct comparisons are difficult because not all bodies provide the same services. The data comes from annual statements of financial information each organization is required to file, which is usually available on their websites.
From those documents, we extracted the total payrolls including expenses, the number of employees making over $75,000 and $100,000, and the division of the payroll above or below the $75,000 mark. We then compared the figures to the populations served and also came up with lists of each body’s top five earners, and rounded it out with figures for other organizations in the Kootenays and BC.
Nelson had highest payroll, per capita costs
The City of Nelson had the highest payroll among West Kootenay’s four largest cities in 2013 as well as the largest number of high earners, but its mayor insists there was good value for the money.
The city’s salaries totalled $9.6 million, a per capita rate of $942 that was also higher than Castlegar, Trail, or Grand Forks. It had 37 employees making over $75,000 and 16 making over $100,000, more than twice as many as neighbouring cities.
The difference can largely be attributed to Nelson Hydro and the city’s professional fire department. Nelson is the only municipality in BC that both generates and distributes its own electricity, which requires a high outlay of capital and staffing — four of the city’s top five earners last year worked for the electrical utility, with wages of up to $158,632, much of it paid in overtime.
But Mayor John Dooley (pictured below) said Nelson Hydro is still a net benefit to the city. “It’s a major revenue generator,” he said. “Plus they’re involved in other initiatives such as broadband.”
The utility produces about half the power used by customers in its service area, which stretches beyond city limits, and buys the rest from FortisBC. It’s expected to put about $3.1 million into city coffers this year.
Dooley also said a professional fire department is an asset considering the community’s condensed downtown core and many older buildings.
“It’s important to have that kind of protection. It’s also been real asset over the last number of years for the FireSmart program, cleaning up the perimeter of the community to protect it from wildfires.”
The department consists of a chief, assistant chief, fire prevention officer, two shift captains, six firefighters, and secretary-dispatcher, plus 21 on-call auxiliaries.
Wages for the 11 unionized members under their last contract, which expired in 2011, started at $53,600 for a probationary firefighter while the assistant chief last year made $101,719 and the chief, who is not in the union, earned $107,357.
Lorne West, vice-president of the International Association of Firefighters Local 1343, said Nelson’s firefighters are the lowest paid in BC, earning about six per cent less than their counterparts — even after an arbitrator granted them a 24.5 per cent increase retroactive to the start of 2008.
He also said Nelson has “disproportionately” funded its fire service as a percentage of the city budget. (This year it accounts for nine per cent.)
“Our view is the department should be a little larger, closer to Trail,” he said. “My expectation is the city is going to do something to correct that imbalance, but we’ll see to what degree it gets corrected.”
Nelson isn’t unique in having a professional fire department — Dawson Creek, Kitimat, and Revelstoke are just some of the smaller BC centres that also have them — but by historical quirk, Nelson is the only interior municipality with its own police force.
Municipal police salaries are kept separate on civic payrolls, but in 2011, the average cost per officer was $177,000, a per capita rate of $328. In 2012, wages ranged from $62,000 for a probationary officer to $102,467 for a sergeant. In 2013, staffing was budgeted at $2.78 million, including salary and benefits.
Police chief Wayne Holland has said the department’s proportional share of the city budget is lower than other similar-sized BC communities while the case-load burden per officer is higher.
Dooley said the primary advantage of a municipal police department is that it lets the city set priorities and police the community as it sees fit.
As for hiring practices generally, he said there is a “competitive environment for qualified people” and they try to keep salaries in line with the rest of the province.
“It’s important to pay fair compensation to any person who works for the municipality and critical at the senior management level that we have experienced, innovative people looking to generate revenue and save taxpayer money.”
Dooley also said his preference is to promote from within — both the fire chief and city manager moved up to their current positions — although the city has sometimes hired from outside, such as the police chief, who came from Vancouver, and its new director of public works, who is from Saskatchewan.
Like Nelson, Grand Forks has its own electrical utility. The city buys power wholesale from FortisBC, allowing it to both make a profit and give a two per cent rate advantage to residents. Two of the city’s top five earners last year worked in the electrical department.
“Our electrical system is staffed by our own trained professionals and maintenance and replacement reserves are heathy,” Mayor Brian Taylor (pictured at left) said.
“Having control of our own poles and wires has allowed us to piggy-back fibre optics on our poles and earned revenue that has allowed the city to keep reserves robust and contribute a portion of electrical revenue to other city expenses.”
Taylor said the city has been asked repeatedly to consider selling its system — as Kelowna recently did to FortisBC — but community control “is working very well for the city now and as we struggle with sustainability it may be even more important in the future.”
Trail has region’s top earner
By far the highest paid civic employee in West Kootenay last year was Trail city manager David Perehudoff at nearly $226,000, including about $6,500 in expenses.
Perehudoff, who is both a certified general and certified public accountant, doubles as the city’s financial administrator, and at 17 years has been in his role longer than any of his local contemporaries.
Mayor Dieter Bogs (pictured below) explained Perehudoff’s base salary is $180,000 per year and council has stipulated that it won’t pay out more than a year’s worth of vacation if he leaves at the end of his contract or retires.
Bogs said Perehudoff’s workload has been “significant” for several years due to a number of projects, including downtown revitalization, a proposed boundary expansion, acquisition of the airport, and planned utility and pedestrian bridge.
Consequently, he hasn’t been able to take most of his holidays and has been paid out annually.
Bogs said nearly all communities Trail’s size have two people doing the jobs of administrator and treasurer, and Perehudoff’s ability to wear both hats saves the city an estimated $150,000 per year.
“Many communities have been after David during the last six to seven years as he is one of the most experienced and capable [administrators] in the business and Trail council unanimously did not want to lose him and particularly at this time.”
Trail’s overall payroll of $5.57 million in 2013 was about $1.8 million higher than Castlegar’s, even though it has a slightly smaller population.
Bogs said that’s because Trail is responsible for its own recreation facilities, whereas Castlegar’s are operated through the regional district.
Trail’s status as a commercial, recreational and service hub for Greater Trail’s population of just under 20,000 represents an additional cost to the city, he said.
Facilities such as the Memorial Centre and aquatic centre serve a much larger population and require additional staff.
Some of Trail’s neighbouring communities help pay for the city’s recreation facilities, allowing citizens to access services at the same rates. However, residents of Rossland and the Beaver Valley, where such agreements no longer exist, pay higher user fees at Trail’s facilities.
Bogs said Trail’s recreation department represents almost $1 million in salaries, about half of which is recouped from its neighbours.
“Trail is also a more challenging community — and particularly the West Trail side — from a utility servicing perspective,” Bogs said.
“The public works department is significantly larger than the one in our neighbouring community.”
Per capita, Castlegar’s costs were among the lowest in the region at $484 last year. “We’re on the thin side,” Mayor Lawrence Chernoff (seen at left) said of administrative salaries. “We operate a lean machine and it seems to work well.”
Although Nelson’s salary costs were the highest in the region, they paled in comparison to Kitimat (population 8,335) which had a payroll of over $10 million and per capita costs of $1,204. The district had 48 employees earning $75,000 per year or more and 22 making $100,000 or more, including two over $200,000.
While larger municipalities such as Langley and Abbotsford had much higher overall payrolls, their per capita costs were lower, both falling in the $360 range.
— With files from Guy Bertrand, Jim Sinclair, and Craig Lindsay
Recreation plumps RDCK payroll
The Regional District of Central Kootenay’s payroll in 2013 was larger than three of its neighbours, but Regional District of Kootenay Boundary residents paid the most per capita.
And while their populations are very similar, Central Kootenay’s $9.3 million wage tab was more than twice that of the Regional District of East Kootenay’s because they provide many more services — about 160 in all, including parks, water systems, fire departments, and building inspection — compared to East Kootenay’s 90.
The largest single expense is recreation: the RDCK operates rec complexes in Nelson, Castlegar, and Creston, whereas in East Kootenay, municipalities provide most of those services.
“We have a few recreation services but don’t end up with a lot of salaries in them,” RDEK chief financial officer Shawn Tomlin said. The regional district contracts management of the arena in Invermere to a society, “so any salaries or wages associated with its operation don’t show up on our [financial statement].”
However, the City of Cranbrook has asked the East Kootenay regional district to consider establishing a joint recreation commission. Tomlin said those talks are still in the preliminary stages. Presently Cranbrook taxpayers pay $3.9 million of the $5 million annual operating cost of the city’s recreation facilities. The rest comes from user fees.
On the waste side, most of East Kootenay’s landfill and transfer station operations are contracted out, with only a few in-house staff involved.
RDCK chair John Kettle (pictured at left) also noted the East Kootenay is home to many more part-time residents. Although that presents certain challenges, he called non-resident taxation a “huge benefit. Many residents only use facilities three months a year, but pay for 12.”
Kettle said his board works with senior managers to determine staffing.
“Directors are responsible for making sure we don’t load [employees] up with an incredible amount of work. But I don’t think there’s any desire to continue to expand staffing,” he said.
Although the board has created some new positions in recent years, it has declined others, such as a deputy regional fire chief.
Kettle suggested pay scales are “due for a review” and that in setting them, a community’s “prevailing wage” should be a factor.
“My argument is we’re leaving out one common denominator,” he said. “We never look at the communities where the taxation is derived. In Creston the prevailing wage is $15.50 an hour.
“There is a sense that if you work with government you get paid more. Your benefits package is huge compared to the private sector. At some point that has to balance out with people paying. I don’t think we can continue unabated with increases.”
Kettle said there has been some discussion of an overall review of salaries, including those paid to directors, which he will recommend be brought forward at year’s end.
While the RDCK’s payroll was bigger than East Kootenay’s overall, the two had a similar number of high-end earners.
Meanwhile, the Regional District of Kootenay Boundary’s payroll of $7.1 million was smaller than the RDCK’s, but its per capita costs were higher at $228 versus $159. It also had more than twice the number of employees earning over $75,000, at 29, and more than three times as many earning over $100,000, at 17.
That was largely due to the fact Kootenay Boundary Fire Rescue, which serves all of Greater Trail, is a regional district service. Its headquarters is staffed by 14 career firefighters, a secretary/dispatcher and up to ten paid on-call firefighters. Four of the regional district’s top five earners last year were firefighters, with salaries ranging from $114,500 to $127,500.
RDKB chair Grace McGregor (pictured at left) said comparing regional districts directly is difficult.
“You’d have to pick services that are identical and that’s virtually impossible,” she said. “It depends on the area, the assessment, and how big it is. It’s hard to do a true comparison.”
Generally, however, she said the greater the number of services, the greater the number of staff.
The neighbouring Regional District of Columbia Shuswap had lower payroll and per capita costs at $3.3 million and $65 than any of the three Kootenay regional districts.
— With files from Craig Lindsay and Arne Petryshen
Little control over salaries
School districts have little leeway in controlling salaries, the chairs of two local boards say.
Financial reporting for 2012-13, the most recent available, showed the Kootenay Lake district had the highest payroll at $38 million, followed by Kootenay Columbia at $27.5 million, and Boundary at $11.4 million.
Expressed per student, the sequence is reversed with Boundary the highest at $8,683 for each of its pupils, followed by Kootenay Columbia at $7,113 and Kootenay Lake at $6,612.
The Ministry of Education’s funding formula includes a base amount for each student plus supplementary grants to address things like declining enrolment and salary differentials in districts with higher-than-average teacher salaries. Overall, per-pupil provincial funding was about $8,500.
Kootenay Columbia chair Darrel Ganzert (pictured at left) said teacher and support staff numbers are largely dictated by enrolment and provincial contracts, limiting trustees’ ability to keep staffing costs down.
“The more years experience you have, the more expensive you are,” Ganzert said. “We will occasionally hire people with a lot of experience, but most teachers [hired] are beginning teachers at lower wages.”
As for senior administrators, Ganzert said wages have been frozen provincially for the last two years and when they hire someone, there is no dickering. “Typically if a position comes up, we would set the wage and people would apply or not. The wage would be pre-set on the job posting,” he said.
Prior to the freeze, increases corresponded to teachers’ raises.
Boundary district chair Teresa Rezansoff (pictured below), who is also president of the BC School Trustees Association, said their budget process emphasizes student choices in secondary schools, keeping all schools open, and meeting student needs in areas like special education, learning assistance, and counselling.
She also said they are “very lean” administratively, with several principals responsible for more than one school or teaching part-time.
“Our senior staff is very small. The board regularly examines its administration numbers, just as it does all staffing levels, especially when retirements happen.”
Rezansoff said administrative salaries are determined by enrolment and in comparison with other similar-sized district.
In each district, the superintendent was the highest-paid employee, but after that a variety of positions were in the top five, including secretary-treasurer and director of instruction.
Kootenay Lake school district chair Rebecca Huscroft couldn’t be reached for comment.
The Southeast Kootenay district, headquartered in Cranbrook, has enrolment and payroll numbers very similar to Kootenay Lake’s, but almost 30 more employees earning over $75,000 a year and five more earning over $100,000.
The Kootenay Lake district had 5,755 students in 2012-13 attending 21 schools and distance and alternate programs in Nelson, Creston, Salmo, Kaslo, Meadow Creek, Crawford Bay, the Slocan Valley, Blewett, Longbeach, Erickson, and Yahk.
Kootenay Columbia had 3,870 students at its 10 schools and alternate programs in Castlegar, Trail, Rossland, Fruitvale, Warfield, and Robson.
Boundary had 1,318 students in 10 schools and an alternate program in Grand Forks, Greenwood, Midway, Rock Creek, Christina Lake, Beaverdell, and Big White.
— With files from Craig Lindsay and Jim Sinclair