Port Phillip councillor takes pay cut to boost community group funds
A $40 million budget shortfall has prompted a Port Phillip councillor to slash his pay in half — but the council’s chief executive won’t be doing the same, despite the mayor not ruling out cutting services or a rate hike.
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Port Phillip Council is expecting to suffer a $40 million budget shortfall as a result of the deadly COVID-19 pandemic, prompting one councillor to slash his pay.
Cr Marcus Pearl will take a 50 per cent cut for the next five months and is urging other councillors to do the same.
“Leaders go first, and all councillors should consider reducing their allowances at this time to help our community,” he said.
Cr Pearl will donate the other half of his pay during that period – about 13,750 – to local community groups, including food banks and sporting clubs.
So far no other councillors or senior staff have opted to take a cut.
Casual staff have had their hours slashed, while other staff have been told to take annual leave, including an extra 10 days of special paid leave.
Mayor Bernadene Voss said chief executive Peter Smith had ruled out taking a pay cut.
“He will continue his longstanding practice of donating a proportion of his salary to charities both within and outside the City of Port Phillip,” she said.
“In addition to this, he will volunteer with a not-for-profit organisation where the time commitment doesn’t impact on his duties and responsibilities as the CEO.”
Cr Pearl’s decision to halve his allowance comes after Cr Voss this month revealed the council was “working on finding additional savings” to help mitigate the projected $40 million revenue loss.
The loss is about 17 per cent of the council’s $230 million yearly operating budget.
Cr Voss said the loss was a result of a $15.7 million drop in parking revenue, as well as a decline in development activities ($8 million), rent and facility hire ($7.1 million) and child care services ($4.6 million).
She did not rule out cutting services but said the council would work to “minimise the impacts”.
“Unfortunately, the financial impact of the pandemic on council is significant, which means council is unable to proceed with the budget it had planned for 20/21,” she said.
The draft budget was due to be handed down early next month but a State Government extension means councils have until the end of August to release the plan.
Cr Voss confirmed the council would not apply to raise the rates cap or increase debt but did not rule out increasing the rates in line with the 2 per cent cap.
Cr Pearl said any rates hike would be “unconscionable” in a year when so many people are losing their incomes.
He called for the council to publicly release its budget plans before the end of August due date.
“People can handle bad news better than they can handle no news,” he said.
Cr Louise Crawford said how people chose to donate their money was a private matter.
“Some people … are in a more precarious financial (position), like myself,” she said.
“I have always held multiple casual jobs — I am an actor and used to work in the hospitality industry. Both sectors have been gutted this pandemic.”
Cr Andrew Bond said all councillors and senior staff should consider taking a 20 per cent pay cut for the next six months.
“I’ve taken a 20 per cent cut in salary in my full-time job, as have many others I know,” he said.
Cr Bond said he would vote in favour of taking a 20 per cent cut to his councillor allowance if the matter came to the council for a decision.
Cr Voss said Cr Pearl’s decision to donate half his allowance should not be taken as a precedent and there were “many ways” to help support those most in need.
“I donate to charities and will continue to do so when I can … I also volunteer in a personal capacity within our city.”
All councillors were contacted regarding possible pay cuts.
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