Remuneration for councillors

Current Approach (till 2019 local government election)

For the 2018/19 Determination taking effect on July 1 2018, the Authority has used the new size index and local government pay scale to adjust base councillor remuneration and remuneration for all positions of responsibility on all councils. Auckland and the Chatham Islands Council are outside of the pay scale because of their extreme sizes but remuneration for all elected members on these councils, including Auckland Local Board members, has been adjusted.

Current Fund for Additional Positions of Responsibilities

The Authority currently provides for each council to have a capped fund for extra remuneration for those who take on additional positions of responsibility.

The fund for each council is equivalent to twice the base remuneration (i.e. 200%) of one councillor’s remuneration. For example, if the base remuneration for a councillor is $40,000, then the total fund that council could use for additional remuneration will be capped at $80,000.

Where a councillor is also formally appointed as a member or chair of a community board, she or he is not entitled to remuneration as a councillor as well as remuneration as a community board member. However, a council may apply to the Authority to pay some extra remuneration to that councillor from its capped fund for additional responsibilities associated with the councillor’s appointment to the community board. There may also be additional positions such as membership of specialist panels, working parties and external bodies. These will vary from council to council.

Before approving any additional remuneration, the Authority expects there to be significant extra workload and/or responsibility required on an ongoing basis for the positon. This could include the need to attend regular additional meetings or to gain a technical knowledge base for a particular field of expertise.

An example of how the extra remuneration might work:

  1. Council A has 10 councillors, each starting with a base remuneration of $40,000.
  2. The Council has a total fund of up to $80,000 (i.e. 2.0 times the base councillor remuneration) to allocate to some or all of its 10 councillors for positions with extra responsibility.
  3. The Council wishes to pay its Deputy Mayor an additional $16,000 for carrying out the responsibilities of that role. That is 40% of the base councillor remuneration of $40,000.
  4. The Council has up to $64,000 remaining to allocate to its councillors for any positions of additional responsibility.
  5. The Council wishes to pay three of its councillors an extra $10,000 each to undertake additional responsibilities as chair of a standing committee.

A council does not have to set extra remuneration for all additional areas of responsibility if it chooses to operate with a flat structure. For example, it may set only one additional payment for the deputy mayor.

All councils will have reviewed their governance structure following the 2016 election and any remuneration changes proposed to the Authority will have been included in the determination following the election. Should any further changes to the structure be required by councils prior to the 2019 election, they are able to apply to the Authority to do this.

Process for approving additional remuneration.

RMA and District/Regional Plan Hearings

Councillors undertaking RMA resource consent hearings and district and regional plan hearings (including Regional Policy Statement) are entitled to additional fees for that work, but those fees are not drawn from the council’s capped fund for positions of additional responsibility.

Plan, RMA and HASHA Hearings

New approach following the 2019 local government elections

Following the 2019 election we will be implementing a “governance pool” allocated to each council and aligned with the ranking of the council on our size index and within the framework of the new local government pay scale. The governance pool will provide the total amount that can be paid in remuneration to councillors in each individual council (aside from the mayor or regional council chair). The governance pool will not have any relationship to the number of councillors. Thus, 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 people.

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.

There will be four requirements for each council:

  • The whole pool must be utilised.  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.
  • The council will need to decide a “base remuneration” for councillors who have no additional responsibilities.  This could be higher than the base amount set out by the Authority.
  • For any roles which attract additional remuneration above the base rate, the council will be required to have a formal vote which must include the following: 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, course, the name of the councillor elected to fill that role.
  • Following its formal decision-making, the council will need to forward its adopted resolutions to the Authority for consideration for inclusion in the determination.

Unfortunately, this and the current uncertainty about the change of delegations has not assisted us in our conclusions about remuneration. Thus for Auckland Boards for the 2018 determination we will apply an increase of 1.5% and will engage in a detailed discussion with them and the Auckland Council when the new delegations are implemented during the year, with a view to adjusting remuneration on July 1 2019.

Timing of implementation

All of the changes to the remuneration outlined above will be phased in over the next two determinations – 2018/19 and 2019/20 - not necessarily in equal tranches.

For further detail see Timetable for local government remuneration setting.