- by Jim Hutton
In Part I we saw that Owen Sound residents had to use a much larger percentage of their income to pay their property taxes than Collingwood residents. It’s important to note that if you rent an apartment you don’t escape our high taxes. It’s unlikely that your landlord absorbs the city’s tax increases. These increases are normally just passed on to the tenants in the form of rent increases. So, you can be sure that all Owen Sound residents equally share the pain of the city’s annual tax increases.
Figure 5; Comparing the Value of Average Homes source: BMA Municipal Studies
The graph above, figure 5, compares the average value of homes in Owen Sound with those in Collingwood. The first thing you notice is that the average home value in Collingwood is much greater than Owen Sound. Also note how the dwelling values change over time. Collingwood values increased by $78,818 or 31.3%, between 2014 and 2021. During the same period values in Owen Sound changed by only $17,786 or 9.0%
This is just another impact of 20 years of annual high tax increases. When you combine the fact that we have the lowest household incomes in the area, with high property taxes and high rents taking a bigger chunk out of our pay cheques, we just can’t afford expensive houses.
Figure 6; Assessment Comparison source: BMA Municipal Studies
As we saw in figure 5, the value of Owen Sound homes are significantly less than those in Collingwood. Now the above graph, figure 6, shows how Owen Sound’s entire assessment compares to Collingwood’s. As we expected Collingwood’s total assessment is significantly higher than Owen Sound’s. However the most noteworthy feature of this graph is how each assessment has changed between 2014 and 2021. Owen Sound’s assessment has grown by only 8.95% while Collingwood’s assessment grew by a whopping 41.63%.
Why is this important? Well, the city doesn’t tax people; it taxes properties in the municipality. So, the more property there is to share the tax burden, the lower the taxes on any individual property owner. Therefore it’s important for a municipality to grow its assessment as opposed to its population, i.e. we need developers to build buildings so those new buildings can share our tax burden. This is why Council decided a few years ago to temporarily suspend Development Cost Charges to create an attractive development environment aimed at stimulating new construction. I will be examining the data to determine whether or not there was a good business case to support this development charge holiday and compiling my findings in a future post.
Comparing Expenses
So why are Owen Sound taxpayers carrying an increasingly heavier load each year. Those who read my previous studies know that the primary cause of Owen Sound’s rapidly increasing taxes, is its rapidly growing expenses. However, some may say; Don’t all municipalities have rapidly increasing expenses? Well we are about to find out.
Figure 7; Salaries, Wages and Benefits Comparison source: Owen Sound’s Financials and Collingwood’s Financials
The graph above, figure 7, shows the total Salaries and Benefits expense for both municipalities. You can easily review the total salaries and benefits for both municipalities by going to the financial notes at the end of the audited financials where you will also see the salary expense for each reported department.
It’s glaringly obvious that Owen Sound’s expense is significantly higher than Collingwood’s. What’s most interesting is that in 2020 Owen Sound and Collingwood had populations of 21,612 and 24,811 respectively as measured in the 2021 census. Yet, Owen Sound spent $3,922,227 more in salaries and benefits than the larger Town of Collingwood. So, what does this mean in terms of employees? Let’s assume the average city employee salary and benefits is $70,000, which is high, given that our average household income is only $75,861. In this case $3,922,227 will pay for a total of 56 employees. Ask yourself; Is it reasonable that a municipality with 3,199 fewer residents would need 56 more employees to run the city?
We know from our previous work that Protective Services is one of the more costly departments in the city. So, let’s take a look at Protective Services Salaries and Benefits.
Figure 8; Protective Services Salaries and Benefits source: Owen Sound’s Financia
As expected, figure 8 shows that the cost of Protective Services has been growing steadily since 2011 and is now taking a larger bite out of the Salary-Wage envelope than any other department at $14,244,712.
In 2011 Protective Services represented 49.6% of all salaries and this grew steadily to 55% in 2020. If the growth continues at this rate, Protective Services will be responsible for 57.9% of all Salaries and Benefits expenses in 2025.
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In Part III we will zero in on what’s driving the Protective Services increases and compare Owen Sound’s to Collingwood’s records on the Sunshine List
