South Dundas Council will be seeking additional input from administration before deciding how to deal with the effect of the increase in the Consumer Price Index (CPI) on employee salary levels.
The issue is currently being explored by other municipalities as they try to balance fiscal responsibility with staff retention. When the CPI was less than one per cent, it wasn’t much of an issue, but with it currently at 5.2 per cent, the impact could be substantial. At the county level the decision was to adopt a policy where if the CPI was less than one per cent, the increase awarded would be one per cent. If it was greater than three per cent, the resultant increase would be three per cent.
To put the issue in context, Mayor Justin Broad read into the record the municipality’s personnel policy, specifically policy 3-11.
“In order to eliminate adverse effects on employees by fluctuations in the cost of living, the municipal salary grid will be adjusted annually by the Consumer Price Index for Ontario. The adjustment will be effective Jan. 1 each year and will be based on the annual Consumer Price Index for Ontario as of Dec. 31 of the previous year, subject to council approval.”
For 2021 the CPI was at 0.7, and it remained there for 2022. “If we look at where it will come in for 2023, it would be at 5.2, which is the number that was noted in the water budget,” said Mayor Broad.
Deputy Mayor Marc St. Pierre brought the issue forward for discussion, stating that he preferred to have a formula in place prior to the start of budget deliberations. “It’s a hot topic of discussion on a couple different fronts as Mayor Broad said. We’ve been introduced to the CPI increase through our water and wastewater budget and obviously as Mayor Broad reported, we’ve been dealing with this on a county level as well in terms of an annual increase.
“I guess what bothers me a bit is this notion that, you know, I think this policy is a little open-ended, to be quite honest with you. I think that saying this increase is on the Consumer Price Index, the CPI, but it’s also subject to a council approval, although we do have approval authority, I think we should be setting what the parameters are, based on some fixed numbers versus just having it as a CPI, yet when we come to budget we discuss and debate whether we want to give staff a one per cent, a two per cent or whatever per cent increase. I think there’s better formulas out there.”
St. Pierre indicated that he wanted to accomplish this prior to budget deliberations. He wanted to know if there was an interest in reviewing the policy and have staff come back with a couple of different options other than what is currently in their personnel policy.
Councillor Cole Veinotte expressed his willingness to look at different options. “It would be beneficial for staff for their personal and household budgeting if they had a better idea. I totally agree with that, so I’m open for discussion and to ask staff to come back with some ideas.”
Councillor Tom Smyth asked St. Pierre for clarification on whether he (St. Pierre) saw a new formula being implemented in 2023. St. Pierre said he did, to which Smyth explained he expected that this might cause a problem.
“I’m in favour of changing it for next year,” said Smyth. “I think there’s a lot of people who are already expecting or thinking that they know what their increase is going to be, or they think they know what their increase will be for this year, and I think they are going to be very disappointed if they don’t get what they are expecting. That’s my personal opinion. I like the one to three per cent range of the four options you guys were presented at County Council, I don’t think we should start it right now.”
Councillor Danielle Ward stated that she was interested in learning about what other options might be available, stating that staff retention had to be considered as well.
“I know I was in support of the 5.2 per cent for water and the reason I’m in support of it is because I want to make sure that we’re retaining staff. There’s a lot of competitors out there that are giving CPI increases, specifically municipalities. They might not necessarily be in SDG but there are more municipalities out there that are giving the CPI increase.
“I would like to give staff some sort of formula; I think it’s fair for them to ask that of us. I really don’t want to discuss CPI increase every single year, I think it should be based on a formula and it should be that’s the end of it and it will just be put into the budget.”
According to Mayor Broad, giving the 5.2 per cent increase would carry a cost of $175,000 which is a 2.2 per cent taxation rate. Not doing this, however, carries other costs.
“If we look at what our neighbours have been doing over the last few years, we are significantly behind, to coun. Ward’s point, on retention. We also have launched an org review where we are looking at all of our positions and pays and pay equity which we’re going to have data from,” said Mayor Broad.
Staff were directed to investigate and come back with several options, looking at what others are doing and the adding of some new options as well.