On 'obscene' City salaries

Laurie Charlton
By Laurie Charlton
January 21st, 2013

Rossland’s new CAO, Cecile Arnott, apparently didn’t like the contract she signed only a few short months ago.  At an in-camera meeting on November 26, 2012. Ms. Arnott asked that council amend her contract that took effect on October 1, 2012.  In a memo dated November 22, 2012, Ms. Arnott indicated staff, through consultation with the City auditor, had been reviewing options that would simplify the administration of her contract.  Sounds reasonable.  Or did she have some other reason for asking for the change?

Her original contract called for an annual pensionable salary of $160,000 plus benefits.  She agreed to “donate” up to $15,000 annually to cover part of the cost of her benefits.  The City agreed to pay 100% of the cost of those benefits, just as the City pays 100% of the cost of benefits for all other employees who don’t donate any part of their salary back to the City.

On the surface, this again seems reasonable.  However, information from the BC Municipal Pension Fund (Pension Facts) states that pensionable salary does not include additional pay in lieu of group benefits (such as health and pension) or payment of premiums for those benefits. 

In an earlier commentary I raised this issue.  I also informed the City’s auditor about the artificial inflation of Ms. Arnott’s pensionable salary, and Victor Kumar’s before her, by increasing her salary on one hand then having her “donate” a portion back to the City.  On November 13, 2012, the City’s auditor informed Mayor and Council of my complaint.   Ms. Arnott’s request to amend her contract occurred at the next council meeting.  Coincidence?

Ms. Arnott’s amended contract, approved by council at the November 26 meeting calls for a pensionable salary of $157,600 and she agrees to pay for group benefits, not including contributions to the pension fund, at a cost of $12,411.  This may seem like a saving but the net cost to the City is still $145,000 which is her real salary, not the $157,600 she would like to claim for the Municipal Pension Fund.

How does that change “simplify the administration of her contract”?  Whether she “donates” or “pays” for the amount of the group benefits, it’s still the same thing.  The City still pays for 100% of her benefits.

To me, this still seems to be an unethical, and possibly fraudulent, way to artificially increase her pensionable earnings so that she can enjoy a larger pension in her retirement – at an increased cost to the taxpayer.  Council agreed to the arrangement knowing that the City’s auditor was going to review the arrangement.  I can’t believe that the City auditor, who reports to council not to staff, would provide such advice.

And the issue of suspicious City salaries doesn’t end there.

At a council meeting on November 12, 2012, Ms. Arnott made a presentation to council about her “restructuring” of management and told council she had given Tracey Butler a $20,000 raise.

Ms. Arnott had no authority to give such a raise, but council didn’t object.  The minutes of that meeting show that council adopted no resolution to accept or concur with her presentation.

The Delegation Bylaw would seem to give Ms. Arnott the authority to bestow that obscene raise on Ms. Butler, but all is not as it seems.

Section 150 of the Community Charter says: “In the event of a conflict between terms and conditions of employment established by municipal bylaw, resolution or policy and those established by a contract of employment or collective agreement, the contract or agreement prevails.”

So what does Ms. Arnott’s contract say about giving raises to Ms. Butler who is an Officer of the City appointed by Council?

Her contract says that she can set the terms, conditions, benefits and remuneration for the employment of all Department Heads, Supervisors, Administrative Assistants and all other non-contract City employees.  Ms. Butler is an Officer and is not included in this list.

Ms. Arnott’s contract says that she can recommend to Council the appointment, promotion, demotion, suspension or termination of Officers of the City of Rossland being those employees who are designated Officers by bylaw.  Bylaw #2472 established the position of Corporate Officer as an officer position.  Therefore, only council can set the salary of Ms. Butler.

What should that salary be?  I reviewed the updated salary data provided by the UBCM for 2012.  I looked at the salaries for management positions in communities in BC with populations between 2000 and 5000, including other Resort Municipalities, and local communities with populations less than 5000.  I found that these 29 reporting municipalities provided an average salary for their CAO of only $110,093 and for their Corporate Officer of $78,441.  Both Ms. Arnott and Ms. Butler have salaries that exceed those averages by some $50,000!  I can only classify that as truly obscene!

Council needs to regain control of what happens at City Hall.  They can start by re-establishing Ms. Butler’s salary at the level it was prior to the unauthorized raises provided in 2012 by Ms. Arnott and Mr. Kumar.  They should also establish a repayment scheme to deduct the excess, unauthorized payments from Ms. Butler’s salary for the next year to recover the over-payments.

This is just another example of how willing council members are to stick their heads in the sand, or other dark and deep recesses, and blissfully rubber-stamp whatever staff puts in front of them.  They have to remember that they were elected to think and reason.  They were not elected to become robots.

Laurie Charlton is a retired chemist who was a Rossland city councillor for 17 years between 1975 and 2011.

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