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Council Remuneration Review Committee Agenda - 2020/08/11eheTOwNSNIPof HALAMMME A proud tradition, a brightfuture. The Corporation of the Township of Malahide COUNCIL REMUNERATION REVIEW COMMITTEE August 11, 2020 — 10:00 a.m. Springfield & Area Community Services Building 51221 Ron McNeil Line, Springfield** ri' [) a p a w ., .,., 't.y irviEE be heE u;,.l (A) Call to Order (B) Disclosure of Pecuniary Interest (C) Approval of Minutes — July 28, 2020. (Pages 3-5) (D) Business Arising from the Minutes - Report CAO-13-09 — 2014 Municipal Election —Council Composition/Ward Boundaries. (Pages 6-10) - Report FIN-18-27 —Council Remuneration. (Pages 11-17) (E) Discussion — Council Remuneration - Excerpts from Council Meetings of May 9 and May 23, 2019 - Council Remuneration. (Pages 18-21) - Estimated Councillor Base Salaries (if the Council had not decided to freeze their wages). (Pages 22-24) (F) Next Committee Meeting (G) Adjournment RES Note °toit IlMeini-mI,)eirs o°t 'llh e In order to respect the State of Emergency declared by the Province of Ontario and not hold public gatherings, please note that the Council Remuneration Review Committee meeting scheduled to be held on August 11, 2020 will be via videoconference only. Please note that, at this time, there is not an option for the public to participate in to this meeting. However, you may watch the meeting by clicking on the following ZOOM meeting link: httos://us02web.zoom.us/i/81510093358?r)wd= U m hkE pvV1 pqZEtl N3FCSVol QWFvUT09 Written comments regarding the Agenda items are welcome — please forward such to the Clerk at mcasavecchia .malahide.ca QIN The Corporation of the Township of Malahide Council Remuneration Review Committee July 28, 2020 — 10:00 a.m. The Council Remuneration Review Committee met via videoconference at 10.070 a.m. Due to COVID-19 and public health concerns, public attendance was not permitted at this meeting. The Committee Members and Staff participated remotely. Committee Members: Martin Baelde, Kevin Morrell, Susan Morrell, and Richard Robilliard. Municipal Staff: Chief Administrative Officer/Clerk M. Casavecchia-Somers and Deputy Clerk D. Wilson. CALL TO ORDER: Chair Susan Morrell called the meeting to order at 10.07 a.m. and welcomed those in attendance. DISCLOSURE OF PECUNIARY INTEREST and the General Nature thereof: No disclosures of pecuniary interests were declared. MINUTES: Moved by: Richard Robilliard Seconded by: Kevin Morrell THAT the Minutes of the Regular Meeting of the Council Remuneration Review Committee held on July 14, 2020 be adopted, as amended to correct the starting time of the meeting as 10:00 a.m. Carried. BUSINESS ARISING FROM THE MINUTES: - Excerpt from Municipal Act, 2001 — Role of Mayor and Council The Committee received an excerpt from the Municipal Act, 2001 that sets out the roles and responsibilities of the Mayor and Council Members. - Confidentiality Policy The Committee was reminded that each Member needs to sign and return, at their earliest convenience, a copy of the `Confirmation of Understanding of the Township of Malahide Confidentiality Policy'. COMPENSATION REVIEW REPORTS FROM OTHER MUNICIPALITIES: The Committee received Compensation Review Reports from the Town of the Blue Mountains (pop. 7,000), Municipality of Brockton (pop. 9,400), and the Municipality of Port Hope (pop. 16,750). The Committee deferred further consideration of these reports until a future meeting. 41061 Kevin Morrell inquired why the Federal Government decided to remove1/3 tax free allowance for Municipal Council Members. He noted that, in his discussions with several current Council Members, this decision was not supported by the Councillors. The CAO noted that she did not have the specific rationale, and that there was considerable opposition by many Municipal Councils, however, the Federal Government decided to proceed with the removal of the exemption. In response to an inquiry, the CAO advised that the Malahide Council Members saw a reduction in their net compensation as a result of the removal of the 1/3 tax free allowance. In addition, their base salaries had also not increased for several years as the Council had decided to freeze their salaries. The Committee agreed that base salaries should be set at an amount that would continue to attract election candidates while still being financially responsible to the ratepayers. In response to an inquiry, the CAO advised that the current 7 member Council is not legislated and that there is the option of reducing the number of Council Members or even moving from the current ward structure to at -large representation. This information has been provided to the Council previously, however, the Council at that time was not interested in reducing the number of members on Council or changing the ward structure. The CAO agreed to circulate a previous Staff Report that addressed this matter. COUNCIL REMUNERATION COMPARISON: The CAO advised that the Remuneration Comparison included in the Agenda Package did include a comparison of wages from other similar municipalities. She noted that this chart also noted that actions taken by other municipalities regarding the loss of the 1/3 tax free allowance. The Committee noted that those municipalities that have a higher population, also tend to have higher base salaries. The Committee noted that the Malahide Council salaries were less than several other comparable municipalities. Martin Baelde suggested that the any recommended changes to the base compensation should include adjustments for the removal of the 1/3 tax free allowance. The CAO indicated that those calculations had been completed by Staff previously and agreed to circulate that information to the Committee Members. REVIEW OF COUNCIL BENEFITS: - Mileage — monthly allowance vs per km The Committee was advised that all Council Members currently receive a monthly mileage allowance to compensate for travel within the Township. In addition, Council Members also are eligible to receive a per kilometer mileage rate for travel outside of the municipality. The Committee noted that the per kilometer rate is also less than several other comparable municipalities. SURVEY OF INCUMBENT COUNCIL MEMBERS: - Hours spent per week/month for Council business The Committee received a summary of the responses received from the current members of the Malahide Council regarding the approximate number of hours per week/month that they commit to Malahide Council business. The Committee noted that not only did the amount of time that the Council Members spent on Council business vary from week to week, but it also varied by individual Member of Council as well. 41M The Committee also noted that Council business has changed over the years and is more complex than before. The types of issues are broader and may require more research/knowledge. As well, technology has resulted in an increased demand from ratepayers for more instantaneous communication/responses. The Committee agreed that the knowledge required for a Council Member has increased over the years and that means there is also a significant time commitment required in order to do a good job. The Committee agreed that Council compensation should be reflective of the duties of the Council Members and time commitment required. NEXT COUNCIL REMUNERATION REVIEW COMMITTEE MEETING: The next Council Remuneration Review Committee Meeting will be Tuesday, August 11, 2020, at 10.00 a.m. The Committee agreed to strive to have a final report presented to the Council with any recommendations before the end of September. It was noted that this timeline would enable any recommendations to be approved by the Council and also be included in the Draft 2021 Budget. In order to facilitate discussions at the next meeting, the Committee asked the Staff to report back with respect to what the Malahide Council Members estimated base salaries would have been if the Council had not agreed to freeze their wages for several years. ADJOURNMENT: Moved by: Richard Robilliard Seconded by: Martin Baelde THAT the Council Remuneration Review Committee meeting be adjourned at 11:48 a.m. to meet on August 11, 2020 at 10:00 a.m. via teleconference. Carried. Chair — S. Morrell Clerk — M. Casavecchia-Somers I Report No: CAO-13-09 Date: July 5, 2013 Attachment — Ward Boundary Map 2014 MUNICIPAL ELECTION COUNCIL COMPOSITION/WARD BOUNDARIES Recommendation: THAT Report No. CAO-13-09 entitled "2014 Municipal Election — Council Composition/Ward Boundaries" be received; AND THAT the existing Council electoral structure and ward structure be confirmed for the 2014 Municipal Election. Background: There has been some public feedback during the past year regarding increased costs both in terms of Administration and Council. The purpose of this report is to seek Council's direction as to whether it wishes to change either the electoral structure or ward boundary structure for the Township of Malahide in preparation for the 2014 Municipal Election. The current electoral/ward structure was established under the Restructuring Order, dated May 15, 1997, for the amalgamation of the Township of South Dorchester, the Township of Malahide and the Village of Springfield in 1998. Attached to this report is a map depicting the current ward boundaries. The existing electoral structure consists of: Mayor (Elected At -Large) Deputy Mayor (Elected At -Large) Councillor Ward One (elected by Ward) Councillor Ward Two (elected by Ward) Councillor Ward Three (elected by Ward) Councillor Ward Four (elected by Ward) Councillor Ward Five (elected by Ward). Applicable Legislation: Council Composition Section 217 of the Municipal Act, 2001, as amended, allows a municipality to pass a by-law to change the composition of its Council; subject to the following rules: 1. There shall be a minimum of five (5) members, one of whom shall be the head of council. 2. The members of council shall be elected in accordance with the Municipal Elections Act, 1996. 3. The head of council shall be elected by general vote. 4. The members, other than the head of council, shall be elected by general vote or wards or by any combination of general vote and wards. 5. The representation of a local municipality on the council of an upper -tier municipality shall not be affected by the by-law of the local municipality under this section. A by-law that is passed pursuant to this section will come into force on the date that the new Council is organized after the first regular election following the passing of the by-law. Ward Boundaries Section 222 of the Municipal Act, 2001, as amended, allows a municipality to pass a by-law to divide or re -divide the municipality into wards or dissolve the existing wards. The Municipal Staff considers the current ward structure to be appropriate for the 2014 Municipal Election; however should the Council wish to alter or dissolve its ward boundaries, the process must be initiated now in order to allow sufficient time to adequately review its boundary options before passing the required by-law. Comments/Analysis: The Council may choose to make changes to or remain status quo with the current electoral and ward structure. The Ministry of Municipal Affairs does not provide legal advice concerning options relating to council composition and indicate that there may be pros and cons to every scenario and that it is up to the Council to determine the best option for its Municipality. Wards vs. At -Large With the enactment of the Municipal Act, 2001, municipalities are no longer required to have wards. Elected -at -large systems are typically brought into effect under the principle that by having all members elected by general vote it will be more likely that representatives will have the interests of the entire municipality at heart. There are also some "cons" to be considered when debating the merits of an elected -at -large system. Often there is a less direct link between the voter and the council member as voters do not have one specific member who directly answers to them. In addition, as the candidates with the most votes would be elected, it is often difficult to predict how the distribution of councillors across the municipality may be affected. Further, as campaign expense limits are relative to the number of electors in each ward the amount each candidate would be able to spend would increase making campaigns more expensive as often elected -at -large campaigns rely more on media advertising and less on neighbourhood "grassroots" work. Ward Variances If a ward system is the preferred option, as much as is practicable, the total population/electors in each ward should not be greater or less than 25% of the average population per ward. It is the desired goal when examining options for dividing the wards that they be relatively equal in population; however, it is common to permit a variation from average ward populations since it is practically impossible to achieve the same population for each ward. The Federal/Provincial ridings were established while permitting a variance of plus or minus 25%. A variance of approximately 25% was upheld as an acceptable deviation by the OMB in its ruling on the 57 City Wards originally established in the City of Toronto and so has also become the municipal standard. The following is the current number of electors under the existing ward structure: Ward 1 1,311 Ward 2 1,106 Ward 3 1,449 Ward 4 1,218 Ward 5 1,555 TOTAL 6,639 In order to determine an appropriate variance of plus or minus 25%, the following calculation is necessary: Total No. of Electors = 6,639 Total No. of Ward Councillors = 5 No. of Electors / No. of Ward Councillors = 1,327.8 25% of 1,327.8 = 332 As a result, there should be approximately 1,328 electors per ward with an acceptable variance plus or minus of 332 electors. 1,328 + 332 = 1,660 1,328 — 332 = 996 The current ward boundaries are consistent with the applied variance of plus or minus 25%. Public Consultation Previously, there was a requirement in the Municipal Act, 2001, to give notice of the Council's intention to pass a by-law to change the council composition and to hold at least one public meeting to consider the matter before the by-law could be passed. However, these requirements have been removed. Therefore, the Council is no longer obligated to undertake a public process relating to these matters. Should the Council choose to solicit feedback from the public concerning the council composition and ward structure, the Municipal Staff recommend that a public meeting be held in conjunction with a regular Council meeting; and that notice of such meeting be advertised in the local newspaper and on the municipal website. Financial Implications to Budget: The budget for Council Members would be affected should the Council choose to adjust its current composition. I Submitted by: Michelle Casavecchia, Chief Administrative Officer/Clerk ,,Ih,'Ues Centre Al I 1-wr c WARD #4 j I 1 1 1 TOWNSHIP OF MALAHIDE WARD BOUNDARIES REPORT NO.: DATE: ATTACHMENT: SUBJECT: Recommendation: MAiAnmz A proad vadibo , a b6thr fia , Report to Council FIN-18-27 November 27, 2018 By-law No. 17-105 Council Remuneration Comparison Council Remuneration THAT Report No. FIN 18-27 entitled "Council Remuneration" be received. AND THAT the Council provide direction to the Municipal Staff with respect the following: 1. Any changes that may be desired to the provisions of By -Law No. 17-105 to establish the rate of remuneration for the Members of Council for the upcoming term; and 2. Any changes that may be desired to compensation levels for Council Members due to legislative changes. Backqround: Councillor remuneration is established by by-law. This by-law must be reviewed at least once during the term of council. Generally, Malahide Council reviews the council remuneration by-law at the beginning of each term of council. Current rates of pay are: Mayor $20,697.96 Deputy Mayor $15,924.12 Councillor $11,150.52 While the by-law contains provisions to index the rates of pay, these rates have not changed since first established for the 2012 fiscal year. Previously, the Councils chose to waive the provision to index the compensation rates. Please see the attached by-law regarding other provisions. Legislative Changes: Previously, the Council's remuneration consisted of a two-thirds taxable portion and one-third non-taxable portion. The non-taxable portion represented an allowance for council -related expenses that may have been incurred by Members of Council. Councillors were not required to submit any form of receipt or justification for the expense allowance. In March 2017, the Federal Government passed Bill C-44, eliminating the one-third exemption for elected officials, effective January 1, 2019. This change applies to all elected provincial and municipal officials in Canada and will result in substantive changes to their after-tax compensation. The Government justified this change on the basis that it "provides an advantage that other Canadians do not enjoy." Reimbursements for specific expenses, accompanied by receipts, are not taxable —and this will remain so. In the Government's view, however, a special allowance that does not require receipt accounting, substitutes for salary, and is therefore, a taxable benefit. In accordance with the legislation, as of January 1, 2019, all Council compensation will be taxed as full income and be subject to deductions for Canada Pension Plan (CPP) contributions. This will decrease the amount of after-tax compensation for elected municipal officials. Comments/Analvsis: With the 2018 budget year, in anticipation of the legislative changes, the Council approved the elimination of the one-third exemption from the Council's pay structure. This resulted in an overall decrease to Council Members' net pay for 2018. Throughout 2018, most municipalities have been discussing potential options for mitigating this decrease to individual Councillors' net pay. As we enter a new budget year and a new term of Council, consideration should be given to how, or if, Malahide should adjust the Council's pay in recognition of this legislative change. There are four options for Council to consider. Option 1: Compensating salary increase (full) Municipalities could adjust pre-tax compensation for 2019 to maintain elected officials' after-tax compensation at 2018 levels. Many area municipalities have already taken this action. The benefits of this approach are significant. It recognizes the increasing time commitments of complex and varied municipal duties. In doing so, it helps attract a diversity of candidates to municipal level participation (a growing concern). The costs of this approach are also significant, requiring offsetting cost -savings and/or increases in property taxes. Option 2: Compensatinq salary increase (partial) Municipalities could increase salaries for 2019 to ease, but not negate, the decrease in the Elected Officials' after-tax compensation. As an alternative to a fully -compensating increase, this means fewer benefits but also decreases the financial costs. The reality here is that Elected Officials will face some personal loss of after-tax income. For municipalities, this will also compound the challenge of attracting many and diverse candidates for elected office. However, if a municipality decides it cannot find savings or revenues to support a fully -compensating salary increase, a partial increase can deliver some of the benefits. Option 3: Expanded expense policies As an alternative —or supplement —to increasing pre-tax salaries, municipalities can develop more comprehensive reimbursement plans for expenses incurred. This could include both the types of expenses and the total amounts of reimbursement available. Before changing expense policies, municipalities should determine which expenses Council Members can claim as non-taxable through the Canada Revenue Agency and that could be addressed as an expense to be reimbursed by administrative policy. Option 4: No action Taking no action effectively decreases take-home compensation for affected Elected Officials, with no immediate effect on municipal budgets. This option avoids the immediate need to find cost -savings, contemplate property tax increases, or communicate changes to the public. However, Elected Officials will face a loss of income. This may discourage future participation in municipal governance, especially amongst the youth. Financial Implications to Budget: Referring to the Council Remuneration Comparison chart, attached, the 2018 Budget included an increase of $2,500 to accommodate the increase in CPP, EHT, etc. for Council's fully taxable compensation. Option 1 (above) requires an additional $5,000 to be added to the 2019 and future years' budgets. Options 2 and 3 would also require an increase, dependent on the extent of increasing either remuneration or reimbursable expenses (or a combination of the two). Option 4, obviously, does not have any further impact on the budget. Relationship to Cultivating Malahide: The Cultivating Malahide Integrated Community Sustainability Plan (ICSP) is based upon four pillars of sustainability: Our Land, Our Economy, Our Community, and Our Government. The outcomes of this report meet the goal Our Local Government: Embody Financial Efficiency Throughout Decision -making. Submitted by: Approved by: THE CORPORATION OF THE TOWNSHIP OF MALAHIDE BY-LAW NO. 17-105 Being a By-law to establish the rate of remuneration for the Members of Council and to establish an indexing provision to account for inflationary factors. WHEREAS Section 5(3) of the Municipal Act, 2001, c. 25, as amended, authorizes a municipality to pass by-laws to exercise its municipal powers; AND WHEREAS Section 283 of the Municipal Act, 2001, c. 25, as amended, authorizes a municipality to pay remuneration and expenses to the members of its council; AND WHEREAS the Council of The Corporation of the Township of Malahide deems it appropriate to pass a by-law for paying remuneration to its members of council; AND WHEREAS the Council of The Corporation of the Township of Malahide wishes to incorporate provisions that allow for indexing to offset inflationary factors as well as to provide for reimbursement of expenses for attending council meetings; NOW THEREFORE the Council of The Corporation of the Township of Malahide HEREBY ENACTS AS FOLLOWS: THAT an annual salary for the year 2018, for all Members of the Council be hereby established as follows: Mayor $20,697.96 Deputy Mayor $15,924.12 Councillor $11,150.52 2. THAT the preceding remuneration shall cover all regular Council and the Committee of the Whole Meetings conducted within the boundaries of the Township. 3. THAT, in addition to the regularly scheduled Council and committee meetings, a per diem of $165.00 per day rate shall be paid to Members of Council for participation in work -related conferences and workshops as approved by Council Resolution. 4. THAT, as an inflationary safeguard, the Council's annual salary will be automatically adjusted annually, commencing January 1, 2019. The amounts will be adjusted by the percentage increase granted to the Municipal Staff Salary Grid once determined. 5. THAT the Director of Finance/Treasurer is hereby authorized to automatically make these annual adjustments, when known, without the need of the Council confirming or debating the adjustment of. 6. THAT the payments of Council remuneration will be made monthly in twelve equal installments. 7. THAT, in recognition of the large geographical area of the municipality, and to ensure Council Members are not negatively impacted due to residential location, all members shall be paid mileage to reimburse members for attendance at all Council meetings, regular or special. The annual mileage allowance be hereby established as follows: Mayor $849.96 Deputy Mayor $849.96 Councillor $570.00 8. That mileage for attendance at conferences and workshops will be paid in addition to the annual mileage allowance. The mileage rate for attendance at conferences and workshops shall be the rate established by the Council to compensate the Municipal Staff for their use of personal vehicles for municipal purposes. 9. THAT the Director of Finance/Treasurer is hereby authorized to make these mileage and/or expense payments on a semi-annual basis, or as he/she determines as appropriate. 10. THAT By-law No. 15-29, as adopted on the 19th day of March, 2015, is hereby repealed in its entirety. READ a FIRST and SECOND time this 215t day of December, 2017. READ a THIRD time and FINALLY PASSED this 21st day of December, 2017. 4vor, D. ,Mennill Clerk, M. Casavecchia-Somers Council Remuneration Comparison One -Third Exemption Category One -Third Exempt Fully Taxable Fully Taxable & Grossed Up Mayor Deputy Councilor Mayor Deputy Councilor Mayor Deputy Councilor Annual Remuneration $ 20,697.96 $ 15,924.12 $ 11,150.52 $ 20,697.96 $ 15,924.12 $ 11,150.52 $ 20,697.96 $ 15,924.12 $ 11,150.52 Additional Salary $ 2,600.00 $ 1,100.00 $ 200.00 Total Remuneration $ 23,297.96 $ 17,024.12 $ 11,350.52 Taxable Earnings $ 13,798.64 $ 10,616.08 $ 7,433.68 $ 20,697.96 $ 15,924.12 $ 11,150.52 $ 23,297.96 $ 17,024.12 $ 11,350.52 Non-taxable Earnings $ 6,899.32 $ 5,308.04 $ 3,716.84 Income Tax $ 42.96 $ 1,548.24 $ 368.16 $ 2,197.56 $ 631.56 CPP $ 509.88 $ 352.44 $ 194.40 $ 851.40 $ 615.00 $ 378.60 $ 979.68 $ 669.60 $ 388.68 Net Pay Additional Employer Cost Category Remuneration CPP EHT Lost HST rebate Total Cost Number of Officials Total Annual Cost $ 20,145.12 $ 15,571.68 $ 10,956.12 $ 18,298.32 $ 14,940.96 $ 10,771.92 $ 20,120.72 $ 15,722.96 $ 10,961.84 One -Third Exempt Fully Taxable Gross Up Mayor Deputy Councilor Mayor Deputy Councilor Mayor Deputy Councilor $ 2,600.00 $ 1,100.00 $ 200.00 $ 341.52 $ 262.56 $ 184.20 $ 469.80 $ 317.16 $ 194.28 $ 134.54 $ 103.51 $ 72.48 $ 185.24 $ 124.96 $ 76.38 $ 89.21 $ 68.64 $ 48.06 $ 89.21 $ 68.64 $ 48.06 $ 565.27 $ 434.70 $ 304.74 $ 3,344.25 $ 1,610.75 $ 518.72 1 1 5 1 1 5 $2,523.68 $7,548.61 Included in 2018 budget Potential for 2019 budget The Corporation of the Township of Malahide Excerpts from Council Meeting held on May 9, 2019 — 7:30 p.m. The Malahide Township Council met in the Council Chambers located in the Springfield & Area Community Service Building, at 51221 Ron McNeil Line, Springfield, at 7.00 p.m. with the following present: Council: Mayor D. Mennill, Deputy Mayor D. Giguere, Councillor M. Widner, Councillor M. Moore, Councillor R. Cerna, Councillor S. Lewis, and Councillor C. Glinski. OTHER BUSINESS: - Mavor Mennill - Councillor Remuneration Mayor Mennill suggested that the base remuneration for Council Members should be adjusted to maintain their after-tax compensation at the 2017 level before the 1/3 tax- free exemption was removed through the passage of By-law No. 17-105. In response to an inquiry from Councillor Cerna, the Chief Administrative Officer/Clerk advised that mileage payments are non-taxable as they are considered a reimbursement of expenses. Councillor Cerna suggested that the mileage amount be increased to cover the lost 1/3 tax-free allowance in 2018. It was noted that records of mileage should be maintained by all Council members for possible Revenue Canada audits. Deputy Mayor Giguere advised that she was not opposed to an adjustment of the Council remuneration, however, she did not want it to be tied to the loss of the 1/3 tax- free allowance. She indicated that her preference was to discuss any possible adjustments during upcoming budget deliberations. Moved by: Max Moore Seconded by: Scott Lewis THAT an adjustment to the pre-tax Councillor remuneration for 2019 to maintain elected officials' after-tax compensation at 2017 levels be supported; AND THAT the Municipal Staff be requested to prepare the necessary by-law to implement such an adjustment to the Councillor remuneration for 2019; AND THAT, pursuant to section 283(7) of the Municipal Act, 2001 and the Township's Public Notice By-law, a public meeting be scheduled to be held to consider such Council Remuneration By-law. Carried. The Corporation of the Township of Malahide Excerpts from Council Meeting held on May 23, 2019 — 7:30 p.m. The Malahide Township Council met in the Council Chambers located in the Springfield & Area Community Service Building, at 51221 Ron McNeil Line, Springfield, at 7.00 p.m. with the following present: Council: Mayor D. Mennill, Deputy Mayor D. Giguere, Councillor M. Widner, Councillor M. Moore, Councillor R. Cerna, Councillor S. Lewis, and Councillor C. Glinski. PRESENTATIONS/DELEGATIONS/PETITIONS: Public Meeting - Council Remuneration The Mayor welcomed those in attendance and advised that the Township is proposing to pass a By-law to consider increasing remuneration for Members of Council. The increase is intended to adjust Council compensation to make up for the loss of the 1/3 tax exemption that was previously granted to Council Members. The purpose of this public meeting is to hear comments or concerns from anyone either in support of or in opposition to the proposed by-law. The Mayor asked the CAO/Clerk to provide an overview of the process to date. The CAO advised that section 283(7) of the Municipal Act requires that a Council review its remuneration at a public meeting at least once during its term of office. Generally, Malahide Council reviews the council remuneration by-law at the beginning of each term of Council. Tonight's public meeting will serve to satisfy that legislative requirement. The proposed by-law establishes base compensation amounts and contains provisions to index the rates of pay annually. While prior remuneration by-laws also included similar provisions, the council remuneration has not changed since the 2012 fiscal year. In previous years, the Councils chose to waive the provision to index the annual compensation rates. There has been no increases to the base remuneration amounts during the past 8 years. In addition, prior to 2018, the Council's remuneration consisted of a two-thirds taxable portion and one-third non-taxable portion. The non-taxable portion represented an allowance for council -related expenses that may have been incurred by Members of Council. However, that exemption was eliminated in 2018. This change resulted in a decrease to the amount of after-tax compensation for elected municipal officials. Recently, the Council has been discussing potential options for mitigating this decrease to individual Councillors' net pay. As we have begun a new term of Council, consideration should be given to how, or if, Malahide should adjust the Council's pay in recognition of the loss of the previous 1/3 tax-free exemption. Many municipalities have chosen to adjust the pre-tax compensation to maintain the elected officials' after-tax compensation when the 1/3 tax free exemption was in place. The benefits of this approach are significant. It recognizes the increasing time commitments of complex and varied municipal duties. In doing so, it helps attract a diversity of candidates to municipal level participation. There are costs to this approach, requiring offsetting cost -savings and/or increases in property taxes. The estimated increased cost for 2019 is about $7,550. The Mayor inquired if any persons wish to comment or ask questions concerning the proposed increase in Council Remuneration. Martin Baelde indicated that he does not believe that the Council should arbitrarily make adjustments to their remuneration based on tax changes. He suggested that a review be undertaken to ensure that the Council remuneration is set at a fair rate. The Mayor advised that the proposed By-law to increase Council Remuneration will be considered later in the meeting under the By-law section of the Agenda. BY-LAWS: - By-law No. 19-49 - Establish Council Remuneration. No. 19-246 Moved by: Rick Cerna Seconded by: Scott Lewis THAT By-law No. 19-49, being a By-law to establish Council Remuneration, be given first, second and third readings, and be properly signed and sealed. Carried. Councillor Compensation - Estimated Salary if Annual Increases Had been Applied to Base Salary 2011 2012 2013 2014 2015 2016 2017 2018 2019* 2020 % increase 2.00% o rolled back to 0 0 0 0 0 0 0 3.00% 1.00% 1.65/0 1.75/0 2.00% 1.50% 1.50% 1.50% 2011 rate Mayor actual salary $20,697.96 $20,697.96 $20,697.96 $20,697.96 $20,697.96 $20,697.96 $20,697.96 $20,697.96 $23,297.96 $23,647.431 salary if annual increase applied $21,111.92 $21,745.28 $21,111.92 $21,323.04 $21,674.87 $22,054.18 $22,495.26 $22,832.69 $25,732.69 $26,118.681 I Deputy Mayor actual salary $15,924.12 $15,924.12 $15,924.12 $15,924.12 $15,924.12 $15,924.12 $15,924.12 $15,924.12 $17,024.12 $17,279.481 salary if annual increase applied $16,242.60 $16,729.88 $16,242.60 $16,405.03 $16,675.71 $16,967.54 $17,306.89 $17,566.49 $18,601.49 $18,880.511 I Councillor I actual salary $11,150.52 $11,150.52 $11,150.52 $11,150.52 $11,150.52 $11,150.52 $11,150.52 $11,150.52 $11,350.52 $11,520.781 salary if annual increase applied $11,373.53 $11,714.74 $11,373.53 $11,487.27 $11,676.81 $11,881.15 $12,118.77 $12,300.55 $12,520.55 $12,708.361 Pay rates remained unchanged from 2012 as per By -Laws 12-109 and 15-29. By -Law 17-105 added annual increase starting 2019, matching given to staff. * Base salary adjusted By -Law 19-49 to maintain same net pay following removal of 1/3 tax free allowance, as detailed in report FIN 18-20 * Explanation of Base pay gross up in 2019 for one third portion no longer exempt Previous Status - One Third Exempt 2018 Pay Rates ** Mayor Deputy Mayor Councillor Annual Remuneration $20,697.96 $15,924.12 $11,150.52 Additional Pay Total $20,697.96 $15,924.12 $11,150.52 $20,697.96 Taxable Earnings $13,798.64 $10,616.08 $7,433.68 $20,697.96 Non Taxable Earnings $6,899.32 $5,308.04 $3,716.84 0 Income Tax $42.96 $0.00 $0.00 $1,548.24 CPP $509.88 $352.44 $194.40 $851.40 Net Take Home Pay $20,145.12 $15,571.68 $10,956.12 $18,298.32 Budget Impact to the Township Status Quo - Fully Taxable 2019 Revision - Taxable with Gross up Mayor Deputy Mayor Councillor Mayor Deputy Mayor Councillor $20,697.96 $15,924.12 $11,150.52 $20,697.96 $15,924.12 $11,150.52 $2,600.00 $1,100.00 $200.00 $15,924.12 $11,150.52 $23,297.96 $17,024.12 $11,350.52 $15,924.12 $11,150.52 $23,297.96 $17,024.12 $11,350.52 0 0 0 0 0 $368.16 $0.00 $2,197.56 $631.56 $0.00 $615.00 $378.60 $979.68 $669.60 $388.68 $14,940.96 $10,771.92 $20,120.72 $15,722.96 $10,961.84 Fully Taxable & Grossed Up Mayor Deputy Mayor Councillor Mayor Deputy Mayor Councillor Additional Pay $2,600.00 $1,100.00 $200.00 CPP $469.80 $317.15 $194.28 EHT 185.24 124.96 76.38 Lost HST Rebate $89.21 $68.64 $48.06 Subtotal $3,344.25 $1,610.75 $518.72 Number of Individuals 1 1 5 Total Annual Impact $3,344.25 $1,610.75 $2,593.60 $7,548.60 Explanation of Base pay gross up in 2019 should have been (with the annual increases), for one third portion no longer exempt Previous Status - One Third Exempt Status Quo - Fully Taxable 2019 - Fully Taxable with Gross up 2018 Pay Rates WITH ANNUAL INCREASE Mayor Deputy Mayor Councillor Mayor Deputy Mayor Councillor Mayor Deputy Mayor Councillor Annual Remuneration $22,832.69 $17,566.49 $12,300.55 $22,832.69 $17,566.49 $12,300.55 $22,832.69 $17,566.49 $12,300.55 Additional Pay $2,900.00 $1,035.00 $220.00 Total $22,832.69 $17,566.49 $12,300.55 $22,832.69 $17,566.49 $12,300.55 $25,732.69 $18,601.49 $12,520.55 Taxable Earnings $15,221.79 $11,710.99 $8,200.37 $22,832.69 $17,566.49 $12,300.55 $25,732.69 $18,601.49 $12,520.55 Non Taxable Earnings $7,610.90 $5,855.50 $4,100.18 0 0 0 0 0 0 Income Tax $47.39 $0.00 $0.00 $1,707.92 $406.13 $0.00 $2,427.21 $690.08 $0.00 CPP $562.47 $388.79 $214.45 $939.21 $678.43 $417.65 $1,082.06 $731.64 $428.75 Net Take Home Pay $22,222.83 $17,177.70 $12,086.10 $20,185.56 $16,481.93 $11,882.91 $22,223.42 $17,179.77 $12,091.81 Budget Impact to the Township 2019 would have been Status Quo - Fully Taxable Fully Taxable & Grossed Up Mayor Deputy Mayor Councillor Mayor Deputy Mayor Councillor Additional Pay $2,900.00 $1,035.00 $220.00 CPP $524.01 $298.41 $213.71 EHT $206.61 $117.58 $84.02 Lost HST Rebate $99.50 $64.58 $52.87 Subtotal $3,730.13 $1,515.57 $570.59 Number of Individuals 1 1 5 Total Annual Impact $3,730.13 $1,515.57 $2,852.96 $8,098.66 The 2020 Budget includes $12,000 as a placeholder for increases to Council Remuneration.