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Pay band adjustment will cost city $1.8 million a year

A controversial pay band adjustment for senior staff will cost the City of Thunder Bay $1.8 million a year, much higher than figures discussed publicly by city council.
Rally Thunder Bay city hall management pay 1
Around 100 city workers picketed Thunder Bay's city hall in protest before city council approved a pay band adjustment for senior staff on Monday. (Ian Kaufman, TBnewswatch)

THUNDER BAY – A controversial pay band adjustment for senior staff will cost the City of Thunder Bay just shy of $1.8 million a year once fully implemented in 2025.

That paints a very different picture than numbers discussed publicly before city council voted 8-4 to approve the increase for management and other administrative staff on Monday.

Mayor Bill Mauro and others on council had defended the move in part by pointing to an estimate it would cost the city well under $100,000 in 2022.

City staff said at the time they didn't have figures available on the cost in future years, an answer accepted by a majority of councillors despite objections from others.

The idea the adjustment could have a multi-million dollar impact was dismissed as hyperbole during that debate.

The pay band adjustment comes on top of a general increase of 4 per cent council approved for senior staff earlier this year, which will cost the city $1.1 million in 2022.

All told, that means council has authorized a hike of nearly $3 million a year for the city's management and non-union employee group by 2025, pointed out Coun. Mark Bentz, who has been critical of the increases.

The group includes 329 high-level staff including general managers, directors, managers, supervisors, coordinators, analysts, administrators, clerks, and assistants, the city said.

Coun. Brian Hamilton was among those on Monday who pointed to a cost estimate below $100,000 in 2022 to defend the adjustment as reasonable.

“This came into the media a couple of weeks ago talking about 12 per cent raises, and the people were pulling out their pitchforks like it was going to cost multi-millions of dollars," he said at the time. "We find out here tonight it’s going to cost [$84,111] and it’s going to allow our most effective managers to stay in their positions."

In an interview, Hamilton said he remained comfortable with the adjustment and didn't regret the comment.

He noted progression through the pay bands is based on performance metrics, and said the adjustment is necessary as the city works to retain key staff in a competitive labour market.

"Of course I'm aware of the impact, but the fact is, this is where we are," he said. "We have a major issue with retention and recruitment – we cannot fill managerial roles, full stop."

Over 60 per cent of employees in the group had reached the top of their pay bands, he noted, and those bands had not been adjusted since they were approved in 2007.

"Now you've got places for managers to go [within the pay bands], and you have an incentive for managers to stay and do their best."

"The labour costs for the City of Thunder Bay rise to the tune of millions every year, so to look in detail at one particular sector's wages I think is unfair to the process," he added.

The city confirmed Tuesday that 18 staff in the management and non-union group will receive total increases approaching 12 per cent in 2022, though none are senior executives.

Bentz and Coun. Trevor Giertuga had asked administration about the cost of the adjustment in future years on Monday, warning it could rise substantially.

The information was not immediately available, they were told.

In response to a TBnewswatch inquiry, the city shared estimates the adjustment will add over $600,000 in costs in 2023, a similar amount in 2024, and around $430,000 more in 2025.

In total, that will add $1.76 million a year to the city’s payroll by 2025, on top of the 4 per cent general increase that will cost $1.1 million in 2022.

The city had refused to share details on the adjustment prior to council’s ratifying vote Monday, calling that standard practice for human resources matters.

The issue drew substantial protests from unionized city workers Monday, who called it an affront that would be remembered heading into collective bargaining in 2023.

In an interview, Bentz expressed disappointment council approved the adjustment without seeing all the details. He believes the decision is well out of step with public sentiment.

Coun. Rebecca Johnson agreed the full financial impact of the adjustment wasn’t made clear during Monday’s council meeting.

“Administration should have been prepared for the question and should have had an answer,” she said. “There’s no question about that.”

She said she remains comfortable with the decision, however, saying the larger increases are adjustments for positions where compensation had fallen behind, not simply raises.

She also echoed comments from Hamilton that the public debate around the adjustment is something other city employees don’t have to contend with.

“When we negotiate with CUPE, if we’re going to discuss the contract, it’s all done in closed session,” with details announced after the fact, she said.

Defenders of the pay band adjustment have noted it's meant to achieve a target set by council in 2007, which aims to keep compensation for the management group at the midpoint of what's paid by a list of comparable municipalities for similar positions.

The group is falling short of that target by 9.1 per cent, the city says.

Bentz and Coun. Albert Aiello questioned the inclusion of Southern Ontario municipalities on that list Monday, saying they experience vastly different economic realities like strong growth and more varied tax bases, while Thunder Bay offers greater affordability and purchasing power for its staff.

According to the city, the comparator list includes the following municipalities: Barrie, Burlington, Chatham-Kent, Kingston, North Bay, Oshawa, Sault Ste. Marie, St. Catharines, and Sudbury.

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