– by Jim Hutton

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, 52.8% for transit, 52.5% for human resources and 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. Recovery Plan: Develop a five year recovery 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 Scrutiny: Modify the job descriptions for the city manager and all senior staff to explicitly include the vetting and approval of all budgets submitted by their direct reports with a view to ensuring that any increase requests are accompanied with detailed documentation justifying the increase and the requested increase does not exceed the annual rate of inflation.
3. Change the Budget Process: Roll out a zero-based budgeting process. Instead of new budgets being developed using the past year's budget as a baseline, they start with a blank page. Each new budget is built based on the assigned activities for the next year and 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 pay for the bus contract, as it did this year, the budget manager cannot use these funds for anything other than the bus contract.
6. Budget Committee: Implement Councillor 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 councillors 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 a full-time equivilant (FTE) spreadsheet, and 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.

Additional information on my analysis of Owen Sound’s position relative to other similarly sized municipalities can be found on my website at www.OwenSoundTaxes.com.

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. 

We can change this by electing councillors who are prepared to take on risk and make decisions in order to restore Owen Sound to the thriving, prosperous city that it was many years ago. Based on their voting patterns during this term there are only two people running for reelection that have earned my vote: Carol Merton and Brock Hamley.  

When you’re considering who to vote for this election ask questions of the candidates to get a sense on how they will vote when presented with large budget increase requests. As well, try to separate the true results-focused leaders, who are capable of turning things around at city hall, from institutional bureaucrats who will accelerate Owen Sound’s downhill slide with their endless thirst for staff studies and consultant reports.  

We need five new councillors to join Carol and Brock. Fortunately we have a strong slate of new candidates to choose from. Two that show promise as decisive, business focused leaders are Melanie Middlebro' and Meghan Robertson. Also worthy of your consideration is Jon Farmer, who demonstrated good potential in building consensus and ensuring that all voices are heard. As well, Alan Douglas and Jeff Caldwell are both offering their services as full-time councillors. The value of being a full-time councillor is significant and should not be underestimated. Essentially they are offering to work a 40 hour week on top of their after-hours council and committee work. In addition to being available to you to answer your questions during the day, their capacity to do research and build relationships with city staff can be very valuable. Also, as anyone will tell you, there is a volume of reading material to review to be fully prepared for each council and committee meeting. So having the capacity to study material and investigate the options during the day will allow them both to make significant contributions to the team.

You will need to decide for yourself, which new candidates you think are best suited to put Owen Sound on the road to recovery. I encourage you to take a good look at all of the new faces that have stepped forward with an offer to serve you as a new member of council at the links below.

1. All Candidates Introductory Speeches will show you how they introduced themselves at the beginning of the campaign.
2. Chamber of Commerce All Candidates Meeting will show you how they responded to written questions presented to them by a moderator.
3. Rebound All Candidates Meeting  will show you how the candidates responded to live questions from the audience at the microphone.