Governance Remuneration Pool
The governance pool provides the total amount that can be paid in remuneration to councillors in each individual council.
Each council’s governance pool is aligned with their ranking of the council on the relevant size index and within the framework of the new local government pay scale.
The governance pool has no relationship to the number of councillors. If a council wishes to change the number of councillors and the Local Government Commission agrees, the size of the governance pool will not change, it will just have to be shared amongst more or fewer councillors.
Each council will need to decide how it wants to allocate its pool according to its own priorities and circumstances. Roles to which additional differential remuneration can be attached may include not just internal council roles such as deputy mayor, committee chair or portfolio holder, but also other jobs representing the council on outside groups.
The governance remuneration pool does not apply to the remuneration for:
- Regional council chairs,
- Community board members, or
- Auckland local board members
Their remuneration will continue to be set separately by the Authority.
Council requirements for the remuneration pool
The whole pool must be used
We understand that in any community there will be pressure to keep rates down by paying councillors less and we feel it is important that councils are protected from such pressure.
A council cannot exceed its assigned governance remuneration pool and the pool is required to be fully allocated. The pool covers the remuneration of base councillors and positions of additional responsibility. The pool also covers additional remuneration paid to community board members who have been delegated significant levels of responsibility by the council.
Although the governance remuneration pool must be fully allocated it may not be fully spent during the term of the current determination (usually 1 July to 30 June). For example, underspends may arise due to a vacancy or a councillor taking a leave of absence. Underspends may also occur following council elections.
The council will need to decide a base remuneration for councillors who have no additional responsibilities.
This could be higher than the minimum allowable remuneration set by the Authority.
Votes for remuneration above the base rate for positions of additional responsibility
For any roles which attract additional remuneration above the base rate, the council will be required to have a formal vote.
The vote must include:
- a title and short description of each role (i.e. what are the requirements for the councillor who undertakes it)
- the proposed annual dollar value of remuneration attached to the role, and
- the name of the councillor elected to fill that role.
Send the proposal to the Authority
Following its formal decision-making, the council will need to forward their proposal for additional remuneration to the Authority for consideration and inclusion in the determination.
Prior to the election the Authority will send to all CEOs an electronic worksheet, forms and instructions to facilitate this process.
Payment for hearing fees and allowances not included in the pool
Councillors undertaking Resource Management Act (RMA) resource consent hearings, Housing Accords and Special Housing Areas Act (HASHA) hearings, and district and regional plan hearings including Regional Policy Statements are entitled to additional fees for that work.
The fees are not drawn from the council’s governance remuneration pool.
The allowances that cover all elected members are not part of the council’s governance remuneration pool. The recompensing of allowances and hearing fees to elected members comes out of the fund set aside by the council for such payments.
Proposals for changes during a council term
The Authority will consider proposals made to it by councils requesting new arrangements and will either issue an amending determination or consult further with these councils.
All proposals must be submitted to the Authority regardless of the additional level of remuneration proposed. The Authority expects councils to consider their full work programme for the triennium when making proposals.
Authority approval for new or removed positions
Councils need the Authority’s approval to establish or disestablish a position. Councils’ proposals must include:
- the name of council
- the number of elected members
- the Governance remuneration pool
- the councillor minimum remuneration
- the (proposed) base councillor remuneration
- the name/title of each (proposed) position of responsibility
The proposal for each position of responsibility must include:
- a brief description of additional responsibilities above those of a base councillor
- the number of members per position
- the (proposed) annual remuneration for the position
- confirmation that the pool is fully allocated, and
- the date when positions and remuneration were confirmed by council
Establishing a New Position of Responsibility
If a council proposes to establish a new position, it will need to review its allocation of its governance remuneration pool. Because the pool will already be fully allocated, the new position, if it is not replacing an existing position, will require a reallocation of the remuneration paid to other positions that were previously approved by the Authority.
Disestablishing a Position of Responsibility
If a council proposes to disestablish a position of responsibility, the council will need to review its allocation of its governance remuneration pool. As the pool is required to be fully allocated, the released amount available from the disestablished position will need to be reallocated amongst the other existing positions covered by the pool.
Criteria for approval
The Authority has traditionally accepted proposals in respect of additional remuneration that are unanimously supported by council.
Where it receives split recommendations, strong supporting documentation concerning the reasoning behind any change in the recognition of positions should be provided.
The Authority will consider proposals for changes as they are received. The process of developing and producing a determination generally takes about three months to complete.
In all cases where there is a change, councils need to wait till an amended determination is gazetted by the Authority before they can make the changes to their elected members remuneration. However, all payments are effective on and from the day after the date on which the Council confirmed the position, and will be backdated in the determination.
A council cannot generally make a request for an increase in the size of its governance remuneration pool if it appears that it is not sufficient to meet their needs. Under extraordinary circumstances (for example following a major natural disaster) the Authority might agree to an increase.
Changes in councillor numbers following a representation review will not affect the council’s governance remuneration pool. However, it will have an impact on councillors’ minimum allowable remuneration and consequently it will impact the remuneration rate set for a base councillor and for positions of responsibility.
The reduction in councillor numbers will see an increase in the funds available from within the governance pool to allocate to the base councillor position and positions of responsibility. Conversely more councillors would mean that the available governance pool would need to be spread among more people.
Council Vacancy or Leave of Absence
If a councillor’s position becomes vacant or a councillor takes leave of absence during a council’s term the council must not reallocate, among the remaining councillors, the amount not being paid during the period of the vacancy or leave of absence. In these cases, the amount allocated is set aside for when the position is filled or the councillor returns after their leave of absence.