Calgary councillors voted almost unanimously to end the practice of paying out bonuses to long-serving City of Calgary employees Tuesday night.
The motion to cancel the bonuses as of Dec. 31, 2021, passed easily, with only Ward 10 Councillor Ray Jones voting against it.
Mayor Naheed Nenshi said council was given legal advice, urging them to grandfather the bonuses until 2021 so as to avoid a lawsuit that could possibly cost the city more than it would save.
“Some councillors just wanted to end it today,” Nenshi said. “But… if you’re going to do something symbolically to save money, don’t do it in a way that will cost you more money. Most of council agreed on that.”
Nenshi said canceling the bonuses will save the city millions of dollars per year, but the exact amount isn’t known.
“The actuarial numbers are up to $7 million a year,” Nenshi said. “We typically pay out $4 million a year. It only goes to people that are eligible for retirement, not anyone who leaves their job.
The mayor said it’s only the longest-serving city employees that would receive the payout.
“You have to have an 85 factor, which is your age plus years of service, so typically, you’re 55 and you’ve had 30 years of service.”
Protecting city employees
Jones was the only councillor who voted to keep the bonus structure in place, and said he thought voting against the motion was the right thing to do.
Jones added he understands why his colleagues voted to cancel the program.
“Everybody’s looking for ways to save money,” Jones said. “With the recent budget we just went through, we had to find $55 million.
Council transition allowance
Council was also set to vote on ending the practice of paying a transition allowance to councillors who leave office, lose their seat or do not seek re-election.
Ward 11 Councillor Jeromy Farkas, who initially asked council to cancel the allowance, withdrew the motion due to a time constraint, and added changes to the allowance have to be passed as changes to bylaws.
Farkas said he plans to reintroduce the issue in early 2020.