BANFF – At least one councillor is suggesting a wage freeze for Town of Banff staff for 2021 as result of the financial fallout of the COVID-19 pandemic on the community, while others suggest a cost of living increase at the very least.
Mayor Karen Sorensen is more in favour of cost of living increase at this point.
“This organization has not stopped working – not for one minute – during COVID,” she said at a recent governance and finance committee meeting.
“A cost of living increase has always been, in my mind, the least we can do in terms of our employees.”
Councillor Peter Poole said he would like to explore a wage cap or wage freeze.
“Let’s freeze it as a general goal, and then we might tweak it up or down a bit,” he said.
“The tweaking up or down would be an amount of a $20,000 change. What I am concerned about is having a $50,000 increase in our wages our benefits.”
Due to the financial impacts of COVID-19 and and the uncertainty going into the budget and service review cycle for 2021, administration sought direction from council on whether they wanted to deviate from any of the standard guidance in the financial plan.
Specifically, they were seeking direction on new service level requests, property tax cap, infrastructure sustainability strategy, the budget calendar and the annual adjustment of employee wages.
The guidance in the financial plan for the base wage adjustment is based on an average of a council-approved formula.
The formula is calculated as an average of Alberta CPI – the average Alberta annual inflation for the period ending June 30 of the previous budget year – and a calculation of Alberta’s annualized average change in average weekly earnings including non-overtime, non-union, local, municipal, and regional public administration from July of the previous year to June of the current year.
“The current forecast based on this formula would result in an annual wage adjustment in 2021 of 3.95 per cent,” said Chris Hughes, the Town of Banff’s director of corporate services.
“This is a lagging indicator as it is based on a historical index. The impact of COVID-19 on wages in the province won’t be felt until next year’s budget cycle.”
If council wants to see a different formula used this year for the preparation of the 2021 operating budget, Hughes said one option would be to drop the average weekly earnings index from the calculation just use just the Alberta CPI index of 1.4 per cent.
“The wage comparison study that was originally scheduled for 2020 was pushed to 2021 and will give council a sense of how Town of Banff wages compare to the market at that time,” he said.
Mayor Sorensen did prefer that idea, saying historically the Town did use Alberta CPI only.
“I have always stood by the fact that we do always try and pay our employees within the 50th percentile,” she said.
“We will be doing a wage review at some point and I get concerned that we fall way behind in future years. That’s why I think doing some increase is important around cost of living.”
At this point, the mayor said she is hesitant to agree with Coun. Poole’s suggestion.
“It doesn’t mean when I see the big picture, depending what our tolerance is for tax increases in future years, it’s certainly worth looking at that option as well,” she said.
The total wages and benefits expenditure approved in the 2020 budget was almost $18 million.
The budget was cut during COVID with temporary layoffs, a hiring freeze, elimination of performance increases and cancellation of previously approved 2020 positions. In addition, some positions saw reduced hours and employees were encouraged to take accrued vacation where possible.
Councillor Corrie DiManno said she leans more towards Mayor Sorensen’s way of thinking.
“I certainly don’t want to see any kind of wage freeze that has been mentioned,” she said.
DiManno said she would prefer to see some of the same tactics used to save money as was done in the reworking of the 2020 budget for COVID-19.
“To me it comes back to service. If we’re providing the service and folks are doing that work, then they need to be paid a meaningful wage for it,” she said.
“If that means an increase, for sure cost of living. The employees of the organization have been impacted personally by COVID as well potentially, and I want to make sure we are being good employers.”
Administration will return with additional information for council's consideration to a governance and finance commitee meeting by the third quarter of this year.