The Road to Recovery
The Road
To Recovery

We previously learned that Owen Sound taxpayers are one of the highest taxed populations in Ontario. Revenue from taxation increased by $8.4 million, or 38%, between 2011 and 2020. This was twice the rate of inflation during this period which increased by only 18.3%. We discovered that taxes on a $400,000 home in Collingwood were $2,000 per year lower than Owen Sound in 2020, while the average household income in Owen Sound was only $75,861 – one of the lowest in Ontario. These statistics earned us the distinction of being the highest taxed, and at the same time, the community with the lowest household income in Southern Ontario.

We discovered that our high taxes were the result of city expenses growing at a seemingly uncontrolled rate. In 2022 alone we saw budget increase requests presented to council of 71.9% for the city manager’s office, a 52.8% for Transit, 52.5% for HR and a 23.7% for Community Development. This occurred because draft budgets are not at all challenged by Senior Staff as they make their way to the Council table. The current design of the budget process at city hall makes it nearly impossible to produce a budget without increases.

There is no question that the path the city is on is not financially sustainable. The new Council will need to immediately take action to begin the recovery process and reduce spending to a level appropriate for a municipality of only 21,612 residents.

Here are my thoughts on what the new Council can do to put us on the road to recovery.

1.  Develop a five (5) year financial plan with the goal of reducing taxes by 2% per year until Owen Sound's taxes and expenses are relatively equal to similarly sized municipalities. This should include a Change Management Plan and a Communication Plan to ensure city staff remains engaged and focused on restraint.

2.  Budget Vetting:     Modify the job descriptions for the city manager and all senior staff to explicitly include the scrutiny and approval of all budgets submitted by their direct reports with a view to ensuring that the need for any requested increase is well documented and does not exceed the rate of annual inflation.

3.  Change the Budget Process:   Roll out a Zero-Based Budgeting process. Instead of new budgets developed using the past year's budget as baseline. Each new budget is built based on the assigned activities for the year. Each and every expense must be fully justified. You can review this process here:  Zero Based Budgeting (ZBB)

4.  Fully Burdened Cost Centers: Council must introduce Fully Burdened Cost Centers. Council and taxpayers deserve to see all costs associated with each department which includes an allocation of all support services such as IT, HR, Finance, Building Maintenance and most importantly the amortization expense for all capital expenditures for each department or cost center.

5.  Restrict Budget Transfers:    Enforce the concept of Restricted Funds and provide clear rules to eliminate the ability for budget managers to use funds on activities other than the reasons the funds were appropriated. For example, if Transit appropriates funds to cover the bus contract costs, as it did this year, the budget manager cannot use these funds for anything other than the bus contract.

6.  Budget Committee:    Action Scott Greig’s idea for establishing a Budget Committee with the authority to send back draft budgets for reevaluation. Council needs to tap into the community and encourage seasoned business professionals to volunteer for this committee. Ideally membership should consist of two councilors and three Owen Sound residents with knowledge and experience in business and financial management.  

7.  Learning from the Mistakes of Past Councils. Council needs to conduct financial audits of Transportation Services and the Tom Thompson Art Gallery with a view to identify the sources of a 79.9% increase in the transportation budget over 9 years and a 77.3% increase in the Art Gallery budget over four years.  Learning why these extreme increases happened and what the council of the day could have done to prevent them will assist the new council to identify the early signs of similar problems. Study the mistakes of the past so not to repeat them in the future.

8.  Administrative Accountability:     The new council must hold the City Manager Accountable. It is his responsibility to manage city expenditures in a cost-effective and financially responsible manner. It is also his job to ensure that draft budgets are adequately challenged and revised on their way to the council table. He must personally complete a detailed review of each draft budget when they make their way to his desk to ensure that each requested increase is fully supported with documentation and does not exceed the rate of inflation. This Budget Year we saw the City Manager request a 71.9% increase to his budget at a time when city growth has been virtually stagnant for many years. He should be setting an example of “restraint” not “extravagance”.

9.  Transparency is Essential for Recovery: The new council must improve transparency at city hall by including an FTE spreadsheet, and a spreadsheet of current contracts, broken down by department with the annual financial statements. The FTE Spreadsheet should include the previous year’s data so residents can see the changes in the workforce year to year. In addition Council must direct the city’s auditing firm to include statements of operations for each department, in its annual report and include descriptions of all expenses listed under titles of "Contracting" and "Legal and Contracting".

10. Listen to the People: Residents have been very vocal in identifying two major concerns, high taxes and those among us without housing. Therefore council must earmark annual savings for tax reductions and increased support for Owen Sound's homeless.

There is no question that in spite of the best efforts of the current council Owen Sound’s growth and prosperity has been relatively negligible for many years. Given that both Meaford and Georgian Buffs have growing populations, if we continue on this path there will be a time in the distant future that Owen Sound becomes a suburb of one of our neighbouring municipalities.

Return Home


  Add a Comment:


  

Name: 

Email: 


Recovery
2 comments on 1 page
I'm not going to vote for any of the current councilors. I want to see a whole new Council. It's too bad that we didn't get anyone new to run for Mayor or Deputy Mayor.  
Barb Graham

Looks like a really good plan but it's too bad that no one will do anything.  
John Davidson


Page 1 of 1