Change to how city councillors get paid will cost taxpayers $434K

It caused a lot of debate, and five people voted against it, but Hamilton city councillors have voted to change how they get paid.

Move will mean they make the same amount of money, but earn larger pensions

Hamilton city councillors have changed the way they get paid, meaning they'll make more but also pay more in taxes. (Terry Asma/CBC)

It caused a lot of debate, and five people voted against it, but Hamilton city councillors are changing how they get paid.

Right now, city councillors earn a salary, but one-third of it is tax free. The general issues committee voted on Monday to scrap the tax exemption and boost their salaries by roughly one-third.

That means councillors will earn $90,385 per year, up from $72,640.80, but will pay full taxes.

The mayor will earn $171,441, up from $127,284.86.

This is all about enhanced pensions.- Coun. Lloyd Ferguson

The end result is basically the same for the councillors, said finance head Mike Zegarac. But it will mean they will collect a higher pension to the tune of $1,453 per councillor and $3,074 for the mayor for each year of service on council.

The new plan will also cost city taxpayers $434,245 per year, since councillors will have a higher base salary.

That was the main reason five councillors argued against the change on Monday, losing the vote 8-5.

"Why would we approve something that's going to cost a half a million dollars for the taxpayer?" said Coun. Doug Conley of Ward 9. 

Taxpayers have criticized the city for spending far less on matters such as the Canada Post court appeal, Conley said.

The only people who benefit from this change, he said, will be councillors when they retire.

Coun. Lloyd Ferguson of Ancaster agreed.

"This is all about enhanced pensions," he said. "Now that one-third is pensionable income. For long-serving members of council, that's a pretty significant pension for them."

The present system is really a phantom number.- Coun. Sam Merulla

Coun. Sam Merulla of Ward 4 argued that the change makes the city more transparent. It not only makes it easier for people to understand, but Merulla said the one-third system stems back to a time when councillors didn't get reimbursed for expenses.

"The present system is really a phantom number," said Merulla, adding that "I want to be just like my neighbour and pay full taxes."

Don McLean, Long time activist and city hall watchdog, says the objectives to the move are "unclear."

McLean said the move would bring greater transparency to remuneration for Hamilton's elected officials, but at a significant cost to taxpayers who will pay their councillors more now, and in the long run through pension increases.

"It looks like a wash that we no longer give them a tax-free section," McLean said. "But it does have an impact on their pension."

Who voted in favour of the change:

Aidan Johnson, Jason Farr, Sam Merulla, Tom Jackson, Scott Duvall, Terry Whitehead, Mayor Fred Eisenberger, Maria Pearson

Who was opposed:

Doug Conley, Lloyd Ferguson, Robert Pasuta, Judi Partridge, Brenda Johnson

With files from Jeff Green


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