Sin Die

Procedurally, the Mayor asked for a motion to adopt resolution number 18-3268 amending resolution number 93-874, fixing the monthly compensation of the Mayor and City Councilmembers.

When the motion was made, it did not receive a second. As such, the motion does not rise to debate, it falls off the table sin die, meaning there will be no reconsideration at a future date. The matter is closed.

For background, the mover and two other members would not receive an increase through said resolution.

The Mayor should take home more than a council member if these positions are, in fact, to be paid. There are more demands on the Mayor's time due to very extensive public appearances and meetings. Every group wants the Mayor to visit with them. It is an exceptionally rare day when a group or some public entity would call up City Hall to ask for some council member to appear. That just doesn't happen. Let's face it, many people wouldn't even recognize most of their council, but they sure do know their Mayor. It's the Mayor who everybody wants to see!

During the conversation, the incumbent Mayor of the last 12 years expressed his concerns this matter would be kicked down the road indefinitely. Estimates of hourly earning would be impacted by a number of things; back of the napkin calculations arrive at these:

Mayor = $4.74 per hour

Council = $2.17 per hour

There is variation in these calculations because they vary depending on how many events a council member goes to and how much work they put in at home researching, reading, and preparing. From the expense side, as an example, a member might have to pay for a $25 or $50 meal. In addition, there are usually in-event fundraisers to donate to. These expenses are not reimbursed.

Sometimes members are given a courtesy meal if they are speaking or presenting at an event, but a lot of the time the council member reaches into their pocketbook to pay. Some members go to several such events on a monthly basis, which would heavily discount their effective rate. During very busy months, it can produce negative cash flow. And for clarity, there is an option for elected officials to participate in a statewide retirement system, but Lake Havasu does not participate.

I was asked if I am using the city's health care plan. I don't know which members of the council avail themselves of the city's health care plan and at what level, nor would I ask them or in any way represent their response pursuant to the Patient Protection and Affordable Care Act. It's just not my business.

When I was a healthcare CEO with oversight of a large regional employer, healthcare was the largest component of our employee-related expenses. When we look at remuneration, it is natural for healthcare benefits to be considered part of the overall "total rewards" package we offer to employees. Healthcare, dental, vision, life insurance, disability, paid time off, sick days, paid family leave, and maternity leave are all considered part of the overall basket of benefits. These benefits are usually inclusive of a matching 401k plan or, possibly, a retirement plan synchronized by larger groups, such as a state organization.

There are assumptions that require normalization if we are to leverage them to understand overall compensation packages. The development of a model for this with input fields applicable to public officials does require the removal of commonly leveraged fields. For instance, in some municipalities, the Mayor and Council have no retirement plan nor do they receive IRA and/or 401k funds. We are not involved with any retirement plans so this data field would be removed. Things like foregone revenue, however, would need to be added. For example, if a council member takes two work days off for the city's budget deliberations, they cannot earn income from their job for those two days nor will they be paid by the city for this time. These budget deliberations shape the future of the city and account for hundreds of millions of dollars and directly impact some 450 plus employees and their families. This category of time is referred to as foregone revenue and should be calculated at the rate of the private employer, but then we ask if that would be net or inclusive of any benefits accrued separately. Then we have to ask if this might be calculated based on benefitted positions or if consulting rates may be applied. After normalizing many different unique circumstances, we can test various assumptions to evaluate the impact on the ratepayers.

According to some citizens, there should be no pay at all. Unfortunately, such a policy would probably act as a deterrent to a cross-section of people currently in the workforce. Many who need income from multiple streams would be grateful to serve, but they might not be able to reasonably afford a campaign. If elected, they could face the prospect of giving up income.

Offering a net effective rate below minimum wage is likely to discourage low-income people from engaging in elected office. In my opinion, the government is enhanced by diversity. Structuring ways to stifle socioeconomic diversity in a democracy is counterproductive to the intent of the institution itself.

I suspect it would be safer, from a legal standpoint, to either have the office be entirely free and removed from employment status with the city or paid at the level of Arizona's minimum wage. Either direction, it seems, would remove the implications of contravening legislation like the U.S. Fair Labor Standards Act and Arizona's Fair Wages and Healthy Families Act. Of the two options, I think it prudent to choose minimum wage. The question would remain, however, as to how the wages would be tallied up and what the formulas would look like.