The current remuneration for the office of CAO in Peace River is a point of significant contention for many voters in town so warrants study.
It was also a question at the mayoral forum, in response to which justification was given by the current mayor.
Let’s examine that.
First off, what does that pay look like? The contract states $250,000 annually with a yearly “general economic increase”, plus $11,184 as a vehicle allowance. A performance bonus of up to 5% of the base rate may also be given.
Total annual remuneration=$261,184
Before considering whether this is justifiable locally, it needs some context. How does this compare to the salaries for other complex leadership positions in Alberta?
It is higher than:
1. Premier Alison Redford: $215000
2. The superintendents of 56 of the 64 school districts in Alberta.
3. The CAO/city manager for all but 6 cities in Alberta (7 if you remove the bonus; Leduc jumps just over in that case).
But they are not in similar positions so only provide perspective. They can’t be used to determine an appropriate salary for a CAO of a mid-sized town.
To figure that out, you need to conduct a comparative analysis of what other towns are paying for this position and what factors seem to influence that pay. If the position itself were the only determinant, there would be no variance between towns. But there is.
So this becomes an important facet of compensation determination (see the links here also). We can see if market metrics correlate with the differences in salaries between towns with 5000 to 10000 people.
After some number crunching, population, revenue, expenses, and equalized assessment are all shown to correlate strongly with CAO total remuneration. These relationships are poignantly represented visually.
Each dot represents the figures for one of the towns in the group. The salary for Peace River (the black arrow) is well outside of the expected range.
From the data you can also use statistical methods to determine a reasonable salary based on the metrics specific to Peace River. This produces a range of $178,000 to $183,000, which seems reasonable to me. Of course, to this could be added a premium for individual candidate strength and experience.
But why $274,000? What is the rationale?
Mayor Mann argued in the mayoral forum that as council hired a contractor, the salary needs to be higher to pay for the contractor’s employee benefits, taxation, and the like.
This changes the amount the contractor is able to take home. And, it could be argued, changes the amount one would consider is reflective of the candidate’s experience and qualifications which could bring that figure into line in that regards. Some have argued though that no matter the strength of the candidate, this level of compensation is not warranted for our town.
What it does NOT change is the total bill to the Town of Peace River and taxpayers.
Therefore, the total dollar figure under contention is still $261,184 without bonus, $273 ,684 with.
Furthermore, there is nothing mandating the hiring of a contractor instead of an employee.
Therefore, if it cost the town more money, why was it done this way?
Some suggest that no suitably qualified individuals expressed interest at a lower salary so this salary is what the market dictates. Was this the case? Were all suitably qualified individuals considered for the position?
These are all questions that should have been discussed prior to finalizing the contract.
But were they? By ALL members of Council? Did each Councillor voting on the motion to accept this contract have input into the salary and contract and were they given an opportunity to review the contract, in writing, prior to voting?
By all means, we may look back in nine years time and conclude that this was an eminently justifiable decision. And based on two meetings I’ve attended with him, I believe the current CAO will do everything he can to earn his keep and focus on achievement and excellence.
But with consternation around this issue so persistently pervasive it appears the rationale put forth thus far for this salary was not satisfactory to the electorate.
Maybe it never will be.
But understanding the reasons behind a decision is very different from agreeing with them.
We can hope for agreement.
As voters though, we expect understanding.