The growth in the number of city employees whose salaries and benefits were $100,000.00 or more in 2008 is unprecedented. The total number of these city employees more than doubled between 2007 and 2008 from 102 employees to 236 employees. The cost to taxpayers in salaries and benefits also more than doubled from $12,706,541.o4 to $27,556,945.86. The nearly $15 million dollar growth in cost in one year is a rate of growth approaching 120 percent. Consider this question as you continue to read this summary report. "Is the growth in $100K Club sustainable?"
Below is a table summarizing the growth in London's $100K Club between 1996 and 2008.
If you look at the numbers in the columns labelled "No. in Club", "Cost to Taxpayers" and "Inc. from Prior Year" you will get a feel for the rate of growth in the number of employees and the rate of growth in the cost to taxpayers that has occurred since the Ministry of Finance began publishing the figures. In 1996 salaries at or over $100,000.00 were reserved for the executive level of management. Then there were only 7 members in London's $100K Club. By 2000 the number had grown to 12. By 2004 the number had grown to 44. By 2007 the number had grown to 102. By 2008 the number had reached 236.
Over the last 13 years the salaries and benefits of employees earning $100,000.00 or more have filtered down from the executive level to general managers, to directors, to senior managers, to middle management and finally to non-management level employees. The trend in growth in the number of $100,000.00 plus salaries is what is alarming. You might have expected the growth to be relatively steady at a rate of 5 or 10 people per year. That kind of linear growth would be normal. But, the actual rate of growth is increasing each year by a larger and larger number. That kind of growth is exponential in nature and it is what is alarming.
Below is a bar chart summarizing the growth in London's $100K Club between 1996 and 2008.
What stands out about the bar chat above is that the lion's share of the growth in employees earning $100,000.00 or more in salaries and benefits has taken place since the municipal elections of 2003 and 2006. What you can infer from this is that any effort by the Mayor, Board of Control, City Councillors or City Administrators to restrain the growth in the $100K Club has had no effect. Their efforts have either failed completely. Or what might be even worse, their efforts to restrain growth might be non-existent.
Below are two tables that show the breakdown in $100K Club growth by major Service Sector. They are City Hall Services, Police Services and Fire Services. (Please note that for the purpose of this breakdown that City Hall Services also include salary and benefits paid to $100K Club personnel at London Transit Services, Library Services and Dearness Services.)
What stands out about these two tables are the double and triple digit percent increases in growth over the last year and the multi-million dollar increases in cost from the previous year for each major service sector.
Between 2007 and 2008 City Hall's $100K Club members grew from 53 to 92. Police Services $100K Club members grew from 25 to 53. Fire Services $100K Club members grew from 24 to 91. All toll the number of $100K Club members grew by 134. That is more than the entire membership of the $100K Club only one year earlier.
Between 2007 and 2008 City Hall's $100K Club costs grew by about 4½ million dollars, Police Services $100K Club costs grew by about 3 million dollars and Fire Services $100K Club costs grew by nearly $7¼ million dollars. All toll the $100K Club costs grew by more than 14¾ million dollars. That is more than the entire cost of the $100K Club only one year earlier.
(Please note that a report in the London Free Press on March 3, 2009 stated that a portion of the surge in Fire Services $100K Club members "was due to retro-pay after an arbitrated contract settlement last year and a calendar oddity -- there were 27 pay periods last year at city hall, not the usual 26.") Notwithstanding this report the growth in the Fire Services $100K Club is a concern.
Below is another bar chart that shows the breakdown in the growth for the $100K Club by Service Sector for the past three years, 2006, 2007 and 2008.
What stands out is that City Hall Services is the largest cost centre for $100K Club salaries and has been for the last three years. Police Services was the second largest cost centre in 2006 and 2007 but their growth in $100K Club fell off in 2008 compared to both Fire Services and City Hall Services. Fire Services was the third largest cost centre in 2006 and 2007 but it shot up dramatically in 2008. The Fires Services $100K Club total cost of nearly 10 million dollars in 2008 is close to rivaling the 11½ million dollar cost of City Hall Services.
The pie charts below show a breakdown by percentage of the total cost to taxpayers for the $100K Club for 2008 and 2007. Again the percentages are shown by major Service Sector, City Hall Services, Police Services and Fire Services.
Up to and including 2005 City Hall Services and Police Services were the $100K Club's primary and secondary cost centres. Fire Services to that point had had only one representative in the $100K Club.
City Hall Services continues to have the largest $100K Club membership and expend the most dollars on salaries of the three service sectors. In 2006 City Hall Services $100K Club salary costs accounted for about 60% of total salary cost. In 2007 they accounted for about 55% of $100K Club total salary costs. In 2008 they accounted for about 42% of $100K Club salary costs.
Up until 2005 Police Services had the second largest percentage of the $100K Club total salary costs. But their percentage of costs has fallen off. In 2006 the Police Services $100K Club salary costs consumed about 28% of total salary costs. In 2007 that percentage had fallen to about 24% of total salary costs. In 2008 their percentage of total salary costs had declined again to about 22%.
From 2006 to 2008 Fire Services $100K Club salary costs have been steadily growing. In 2006 the Fire Services $100K Club accounted for about 12% of the total salary costs. In 2007 that percentage had grown to about 22% of total salary costs. By 2008 that percentage had jumped again to about 36% of total salary costs.
By 2008 the Fire Services $100K Club was consuming about three times the percentage of total salary costs that it had consumed in 2006. Fire Services accounted for about 36% of total salary costs in 2008 compared to just over 12% of total salary costs in 2006.
The current rate of growth in the $100K Club is unsustainable.
It is a rate that, if left unchecked, can lead to reductions in program spending or to increases in taxes and user fees or both. If that were to happen all Londoners would suffer. A failure to reverse the trend in $100K Club growth is something taxpayers can ill afford. Londoners should be concerned.
The Mayor, Board of Control and City Councillors need to provide taxpayers with more than just an explanation. They need to outline their plan to reverse the growth.
Email, phone, or write the Mayor, Board of Control and City Council. I urge you to ask them tough questions about the $100K Club's growth. Voice your concerns. What you have to say is important and it needs to be heard. Their contact information is at the top in the right hand column. It is labelled "Contact List".
