City of Kitchener compensation expenses REV Jan 4

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City of Kitchener
Analysis of Compensation Expenses
January 7, 2013
1
Truth in Numbers

Present information that informs and
motivates citizens to increase involvement
in municipal affairs

Identify ways to create sustainable and
fair government
2
Methodology

Obtained data from the Ministry of Municipal Affairs and
Housing website for Financial Information Reporting (FIR)
and Municipal Performance Measuring Program (MPMP)

Used data from reports for 2002 to 2011

Obtained data from the Public Sector Salary Disclosure for
2011

Looked at data for
◦ Salaries, wages and benefits
◦ Number of employees
◦ Number of citizens and households
◦ Fire services
3

CPI has increased by 19.9%
◦ 100% in 2002 to 119.9% in 2011
2.2% / year
Consumer Price Index (CPI)
4

City’s population increased by 18.4%
◦ 197,900 in 2002 to 234,300 in 2011
2.0% / year

City’s households increased by 19.0%
◦ 74,220 in 2002 to 88,350 in 2011
2.1% / year
Population and Number of
Households
5
Number of City Employees
1,800
Full-time funded positions (Sched 80A)
1,600
1,549
Part-time funded positions (Sched 80A)
Seasonal employees (Sched 80A)
1,400
1,349
1,196
1,200
1,109
1,104
1,000
960
800
711
600
400
200
91
48
0
2002
2006
2011
6

City’s full-time funded employees have
increased 8.3%
◦ 1,104 in 2002 to 1,196 in 2011

City’s part-time funded employees have
decreased by 40.5%
◦ 960 in 2002 to 1,349 in 2011

City’s seasonal employees have decreased
by 87.2%
◦ from 711 in 2002 to 91 in 2011
Number of employees
7
Compensation Expenses
$140,000,000
Total Salaries, wages and benefits (Sched 40)
Salary and wages (Sched 42)
Benefits (Sched 42)
$120,000,000
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
$0
2002
2006
2011
8

Total salaries, wages and employee benefits has
increased by 83.1%
◦
◦

$67.6MM in 2002 to $123.7MM in 2011
9.2% / year
Salaries and wages have increased by 85.2%
◦ $49.0MM in 2002 to $90.8MM in 2011
◦ 9.5% / year

Benefits have increased by 77.3%
◦ From $18.5MM in 2002 to $32.9MM in 2011
◦ 8.6% / year
Compensation Spending
9
Compensation Expenses
Actual annual compensation
$140,000,000
$120,000,000
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
$0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
10
Compensation Expenses
Actual annual compensation and CPI-inflated compensation
$140,000,000
Actual annual compensation
CPI-inflated compensation
$120,000,000
$100,000,000
$80,000,000
$60,000,000
$40,000,000
$20,000,000
$0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
11
Compensation Expenses
Cummulative premium of actual verses CPI-inflated compensation
$250,000,000
Actual annual compensation
CPI-inflated compensation
$200,000,000
Cummulative difference
$150,000,000
$100,000,000
$50,000,000
$0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
12

If compensation had grown at the same
annual rate as the CPI, spending on
compensation would be 33% less than it
is today

For 2011, this equates to $41.5M

Totaling the annual differences from 2002
to 2011, actual compared to CPI growth,
the City has “over compensated” by
$198.9M
Compensation
13
Compensation Costs per Citizen
$600
$500
$400
$300
$200
$100
$0
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
14
General Government Compensation
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
2002
2006
2011
15

General Government compensation costs have
increased
by 124.0%

$11.8MM in 2002 to $26.5MM in 2011
13.8% / Year
General Government Compensation
16
Fire Services Compensation
$30,000,000
$25,000,000
$20,000,000
$15,000,000
$10,000,000
$5,000,000
$0
2002
2006
2011
17

Fire Services compensation costs have increased
by 62.8%

$16.7MM in 2005 to $27.3MM in 2011
6.9% / Year
Fire Services Compensation
18
Public Sector Salary Disclosure

108 names for Kitchener in 2011

53 names for Kitchener Fire Services employees
◦
◦
◦
◦
◦
◦
◦
◦
1 Fire Chief
2 Deputy Fire Chiefs
4 Fire Prevention Officers
1 Assistant Chief Fire Prevention Officer
35 Captains
4 Platoon Chiefs
4 Assistant Platoon Chiefs
2 First Class Firefighters
19

High salaries, wages and employee benefits costs
make the City increasingly dependent upon
higher taxes, higher user fees and funding from
federal and provincial sources

City of Kitchener needs to improve efficiency

City of Kitchener elected officials need to fully
understand the cost drivers
Conclusions
20

Pension plan going forward converted
from defined-benefit to definedcontribution

Re-deploy employees to highest priorities

Require retirees to pay 50% of their
medical benefits

Approve expenses based on efficiencies
and service levels
Possible Solutions
21
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