The Comparator Trap

Council gave approval to what might have been considered a routine housekeeping matter – updating a list of municipalities to which Innisfil is compared. These “municipal comparators are used for a variety of research and analysis purposes including best practice reviews, recruitment practices, and compensation” according to the staff report. Comparative municipalities are chosen “based on their size, geographic proximity, similarity in the scope of services delivered. It is also recognized that the Town competes with them for talent in the employment market.”

The ‘outdated’ list consisted of 9 other municipalities ranging in size from 19,241(Collingwood) to the City of Barrie (136,000). The new comparator list approved by Council consists of 14 other municipalities ranging from Collingwood to the City of Vaughan (288,301) plus the County of Simcoe (446,000). This list, prepared by a consulting firm at the request of staff, purportedly “maintains the Town’s “mid-market” positioning” but increases the average population size from 72,011 to 147,750 – an increase of 105%. The staff report claims this is “to capture the current and anticipated growth of the Town, as well as highlighting an expanded attracting and retention focus.”

The over-riding assumption is that we must compete with, i.e. out-bid, other municipalities, and the County, for the best administrative candidates. Let’s face it – this is a mug’s game. It’s the reason Toronto has a billion dollar police force trying to stay competitive with the OPP. It’s the same game with elementary vs. secondary teachers, and various emergency services. We’ve seen this process at work in the private sector too where CEO’s collect millions in compensation plus a ‘golden parachute’ even if they’ve run a company into the ground.

Strangely, the same comparators don’t exist at the lower echelons we inhabit. The compensation ‘comparators’ in our world look something like: China, Korea, Mexico or maybe Georgia, Tennessee and Florida. Being ‘competitive’ means, “accept less”.

We might assume that smaller municipalities have to pay more, possibly much more, to compete with the big time players. Fortunately, we can test this proposition statistically. Ontario’s Municipal Performance Measurement Program (MPMP) includes a comparative measure for “efficiency”, described as, operating costs for governance and corporate management as a % of total municipal operating costs.” A lower percentage equals greater efficiency. We can compare efficiency scores against population sizes to test for statistical correlation. In fact, the ‘comparator’ towns smaller than Innisfil have a strong negative correlation between efficiency and size. In other words, a larger proportion of the budget in these smaller towns is more likely required to support ‘general government’. This process is evident too in Innisfil. It’s ‘efficiency’ score declined from 8% in 2009 to 5.4% in 2014 as ‘general government’ consumed a smaller percentage of the budget, even as dollars spent increase.

But the same is not true for ‘comparator’ municipalities larger than Innisfil. The negative correlation almost disappears. In other words, administrative costs including senior staff, have little or no statistical correlation to population size – the measure apparently used by the consultant to justify Innisfil’s “mid-market” position.

Let’s take a closer look at those efficiency scores. The original 9 comparator municipalities had an average efficiency score of 7.2 in 2014. The new expanded list of 14 comparator municipalities (excluding Innisfil) has an average efficiency score of 7.0 (2014) – up from an average of 6.6% in 2009. Innisfil’s 2014 score is 5.4%. Essentially, our model for ‘competitive’ compensation is a group of municipalities that aren’t able to hold the line on spending as a percentage of total budget. Some of those municipalities spend 10% to 13% of their budget on “general government”.

What could we do differently? Let’s forget about competing solely in dollar terms. I’ve heard some residents express resentment over the years that some senior staff collecting six-figure salaries live outside of Innisfil. This is perceived in some places as being terribly ‘parochial’, but from another point of view, maybe not. If you’ve bought into the ex-urban lifestyle of Aurora, or Richmond Hill and you’re only here for the money, maybe you don’t get it. We’re trying to build a special place here – Our Place. Maybe more of our most senior staff should want to see that place as ‘home’.

So, let’s take a long-view strategy. I would like to see a scholarship program as part of Inspiring Innisfil that enables more of our young people to pursue careers in civic administration, urban planning and design, architecture, economic development … you get the idea. Help them get a world of experience wherever – and then invite them back “home” to be part of Innisfil’s continuing story of success. I bet they won’t be here, or leave us, just for the money.