Red Deerians, thank you for sharing your questions and concerns related to compensation of Red Deer’s City Manager. City Council and I have heard you and hope this post provides clarity into why compensation for 2018 is significantly higher than previous years.
- When Council received notice that the long-term City Manager intended to retire, Council was made aware that there would be increased, one-time costs due to retirement, especially given the length of his service. Where possible, Council made every effort to reduce the costs associated with his retirement.
- The former City Manager had a previously negotiated contract that bound City Council to legally meet certain financial obligations upon retirement or exit from the position, and not doing so could have resulted in other potential financial impacts.
- The former City Manager gave notice for formal retirement for July 31, 2018 and, as the recruitment of a new City Manager would likely take up to one year to fill the position, Council renegotiated a temporary six month contract effective September 1, 2018. With this new contract, Council took the opportunity to reduce the salary and other associated benefits historically associated with the position, which better positioned City Council to negotiate future City Manager contracts more cost effectively.
- To manage the impact on both the 2018 and 2019 budgets, the retirement and other related costs (such as vacation payout, pension etc.) for the outgoing City Manager are spread over two years. In 2018 the one-time costs related to the outgoing City Manager are $193,000 and in 2019 it will be $220,000. The taxpayer will see the full correction to the City Manager's position ongoing compensation in the 2020 Financial Statements, due to a renegotiated salary for the new City Manager to be in step with other public sector positions of this nature.
- The new City Manager’s salary is $235,000 (with other reduced benefits), a reduction from previous years to reflect the challenging economic reality our community is facing.
Council understands how the numbers in the 2018 financials related to City Manager compensation would cause concern for our citizens. Please know City Council takes our financial responsibility and stewardship seriously. We hope this helps to answer your questions. As always, please feel free to contact us if you have any further questions.
Mayor Tara Veer
The City of Red Deer