Spotlight on Local Councils and How Much they Pay their General Managers

The General Manager of a local council is an important position. They are the interface between the councillors who set the strategy and monitor performance and the council’s operational arm, which implements the council’s decisions.

General managers are responsible for the day-to-day operations of the council, the implementation of the council’s strategic plans and objectives, the delivery of services and infrastructure to the community, the management of council staff, and the council’s financial management.

General managers have a unique employer/ employee relationship with high levels of accountability to their employer, the governing body of the council, who are in turn accountable to the community for the council’s performance through the electoral process.

The Local Government Act (section 338) requires that general managers be employed under the fixed term, performance-based contracts for a duration of one to five years, based on the standard contract for general managers approved by the Departmental Chief Executive. General managers’ employment contracts may be renewed.

How do you Determine a General Manager’s Remuneration?

The Local Government Act 1993 (‘the Act’), Local Government (General) Regulation 2005 (‘the Regulation’) and the Standard Contract of Employment for General Managers of Local Councils in NSW approved by the Departmental Chief Executive of the Office of Local Government provide councils with flexibility in determining general managers’ remuneration.

Remuneration packages for general managers generally include the following components:

• total salary
• total employer superannuation contributions payable
• the total value of any non-cash benefits, and
• total fringe benefits tax payable for any non-cash benefits.

They are entitled to receive an annual increase in their salary package equivalent to the latest percentage increase in remuneration for NSW public sector senior executive officeholders.

Unlike the NSW public sector, however, they can also receive discretionary increases to their total remuneration package from the council under the provisions of the standard contract as a performance incentive.

General managers’ remuneration is determined by negotiation between general managers and councils. A range informs it of factors, including the skills and experiences the individual will bring to the role, the size and operational complexity of the council, the strategic goals and objectives of the council, the particular needs of the council, market conditions and industry benchmarks.

The NSW Government launched a consultation paper on General Manager’s remuneration.

The NSW Government is considering changes to legislation to require an independent body to set the remuneration of local council General Managers.

In a statement, the Office of Local Government said the move followed community concern that some in the role were getting paid more than the Prime Minister, Premier of NSW and President of the United States.

Minister for Local Government Shelley Hancock said:

“The comprehensive consultation paper examines general manager salaries to address community concerns they are too high with a large disparity across the state, an increasing gap compared to salaries of other workers, and financial pressures facing some NSW councils.”

“Currently, individual councils determine the remuneration package whilst independent arbitrators set the remuneration of NSW senior public servants, ministers and members of parliament, as well as mayors and councillors.

“Therefore, the NSW Government is strongly considering mandating that salaries of general managers are set by an independent body, not by elected councillors.”

“These managers should receive remuneration not only in line with their duties, skills and experience but in accordance with community expectations,” Mrs Hancock said.

Comments have now closed on the consultation paper, and the Office of Local Government is tasked with the mission of determining the fairest way to set a General Manager’s remuneration.

How Much Does Lane Cove Council’s General Manager Get Paid?

The average remuneration received by a general manager in 2019-2020 for each council category was (per annum):

• Principal CBD $511,954
• Major CBD $633,852
• Metropolitan Large $457,180
• Metropolitan Medium $414,427
• Metropolitan Small $334,108
• Major Regional City $439,467
• Major Strategic Area $495,849
• Regional Strategic Area $397,668
• Regional Centre $350,420
• Regional Rural $310,377
• Rural $267,119
• County council $143,270

The total average remuneration received by an NSW general manager in 2019-2020 was $328,287 per annum (not including county councils).

Lane Cove Council is a Metropolitan Small Council.  Craig Wrightson, Lane Cove General Manager, was the highest-paid General Manager in this classification.

Reporting Requirements

Councils are publicly accountable for the remuneration they pay to their general managers. The Regulation (clause 217) requires councils to publish the remuneration paid to their general manager each financial year in their annual report.  This is the same for directors of publically listed companies and senior staff.

Lane Cove Council has failed to comply with this regulation by not including specific General Manager’s remuneration package details.  See below and then compare with neighbouring councils Willoughby City Council and Ryde Council.

In addition, the Office of Local Government’s Guidelines states:

“It is important that any decision by the governing body of council to renew a contract for the general manager and the term of that contract be reported back to an open meeting of council, together with the total amount of any salary package agreed to.”

The same guidelines provide that all discretionary increases in remuneration received by general managers must be reported to an open meeting of the council, together with the reasons for the increase.  See below the Lane Cove Council’s reporting of the General Manager’s pay increase?   Does this meet the guidelines?

It will be interesting to see the outcomes of the remuneration review.  In the meantime, it is up to our councillors to ask the hard questions and for the General Manager to justify any pay increase.

Lane Cove Council Election Survey