1 City of Kitchener Analysis of Compensation Expenses January 7, 2013

2 Truth in Numbers Truth in Numbers Present information that informs and motivates citizens to increase involvement in municipal affairs Identify ways to create sustainable and fair government

3 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

4 Consumer Price Index (CPI) CPI has increased by 19.9% ◦100% in 2002 to 119.9% in % / year

5 Population and Number of Households City’s population increased by 18.4% ◦197,900 in 2002 to 234,300 in % / year City’s households increased by 19.0% ◦74,220 in 2002 to 88,350 in % / year

6 Number of City Employees

7 Number of employees 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

8 Compensation Expenses

9 Compensation Spending 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

10 Compensation Expenses

11 Compensation Expenses

12 Compensation Expenses

13 Compensation 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

14 Compensation Costs per Citizen

15 General Government Compensation

16 General Government Compensation General Government compensation costs have increased by 124.0% $11.8MM in 2002 to $26.5MM in % / Year

17 Fire Services Compensation

18 Fire Services Compensation Fire Services compensation costs have increased by 62.8% $16.7MM in 2005 to $27.3MM in % / Year

19 Public Sector Salary Disclosure 108 names for Kitchener in 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

20 Conclusions 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

21 Possible Solutions Pension plan going forward converted from defined-benefit to defined- contribution Re-deploy employees to highest priorities Require retirees to pay 50% of their medical benefits Approve expenses based on efficiencies and service levels