REQUEST FOR DECISION
DATE: June 26, 2018 Report No. ADM-18-022
TO: Laurie Hurst, Chief Administrative Officer
FROM: Vicki Gannon, Director of Human Resources
SUBJECT:
Title
Mayor and Council Remuneration Review
End
RECOMMENDATION:
Recommendation
That Council receive Staff Report ADM-18-022 for information and provide staff with direction to revise Council Remuneration Bylaw, 2014, No. 2836, and related Council Policies, effective November 1, 2018.
Body
RELEVANT POLICY:
Council Policy ADMIN-58 Independent Review and Market Analysis of Council Remuneration
Council Policy ADMIN-62 Remuneration for Elected Officials
Council Remuneration Bylaw, 2014, No. 2836
STRATEGIC RELEVANCE:
This Report is not directly related to any specific Council priority.
BACKGROUND:
At a Special Council meeting dated May 22, 2018, a motion was moved to compensate the Mayor, effective November 1, 2018, at the median rate of 10 comparable municipalities: $57,600, and that the Council receive 40% of that rate, based on the current Bylaw.
As a result of the changes to the tax laws being implemented in January, 2019, specifically the elimination of the 1/3 tax free allowance, Council also requested that staff provide information regarding the process for elected officials to deduct employment expenses from his or her income.
In reviewing this information with tax accountants at KPMG, it was confirmed that elected officials are deemed to be employees for tax purposes under the Income Tax Act; therefore, those expenses that are related to an elected official’s position that are not directly reimbursed by the Township could be claimed as a deduction from income on personal tax returns using the T2200 form, Declaration of Conditions of Employment.
If elected officials deduct employment expenses, the employer must complete and sign the T2200 form. The signed forms do not need to be included with the tax returns, but they must be kept in case CRA requests to see it. New T2200 forms are to be completed by the employer annually.
The deductible expenses must be directly related to the duties of an elected official, and the burden of responsibility is on the elected official to maintain supporting documentation of expenses incurred, and the business reason, should a personal CRA audit take place. There are rules regarding the claiming of expenses, as outlined in the attached 2017 CRA Guideline. In order to determine specific allowable expenses, it is recommended that the elected officials get advice from their personal tax accountants.
ISSUES:
1. Rationale for Selected Option
This report is for information and direction from Council on any revisions required to the existing Council Policies and Bylaw regarding Council remuneration.
2. Organizational Implications
There are no organizational implications.
3. Financial Implications
There are no financial implications.
4. Sustainability & Environmental Implications
There are no sustainability or environmental implications.
5. Communication & Engagement
Once Council determines the process to incorporate the elimination of the 1/3 tax free allowance, the Director of Human Resources will update Council Remuneration Bylaw, 2014, No. 2836, and any related Policies accordingly.
ALTERNATIVES:
1. That Council receive Staff Report ADM-18-022 for information and provide staff with direction to revise Council Remuneration Bylaw, 2014, No. 2836, and any related Council Policies, effective November 1, 2018.
2. That Council receive this report for information and provide further direction.