Mayor and Council

February 05, 2023

Good Afternoon,

Tomorrow you will have your first opportunity to change the direction that Owen Sound is headed as a result of years of excessive tax increases. The BMA slides show the impact of the failure of successive councils to address our growing expenses.  This situation has developed over the past 20 years and you will not be able to fix it in a single budget year. However you can put on the brakes and begin the process of closing the gap with our surrounding municipalities. Our closest neighbour, Georgian Bluffs taxes a detached bungalow at $1,806 which is only 42% of the taxes on the same property in Owen Sound of $4,210.  It's time to begin to close this gap.

First it's important to acknowledge that this year staff have clearly made a noteworthy effort to hold the line on expenses and have implemented reductions.  These efforts should be recognized and staff should be commended on their efforts. However, as important as these reductions are they do not begin to undo the damage that was inflicted by past budgets.

My thoughts on how you can start the process of change:

1. Set a target of a 2% tax reduction and begin to address the process of staff reductions which will be necessary in the future.

2. There are some budget increases that you have little or no control of such as fuel costs and insurance increases. However as a general rule all increases that are within your control should not be approved. 

3. Salaries and benefits - all increases in salaries and benefits must be offset by reductions in FTEs.  The Owen Sound city workforce has grown well beyond what is necessary to operate a municipality of our size. You will have to address staffing at some time so you can start by offsetting the current increases with reductions in FTEs.  This rule of thumb should be equally applied to civilian staffing in police services.

4. The section of the presentation on Service Level increases must be denied across the board. We simply cannot afford these increases. Although initiatives like Public Art, EAB remediation and grants to third parties are normally worthy of serious consideration, we simply cannot afford these increases at this time.

5. Transit - We are now looking at a transit budget of $1,303,000 which is a 33% increase from the pre Covid budget of $982,500. Staff have estimated  that 2023 revenue from ridership will be only $264,000 which is only 81% of the pre Covid revenue of $325,000.   The bottom line is that costs are up by 33% and ridership is down by 20%.  This is clearly not sustainable. You will need to address Transit sometime this year. You will either have to significantly reduce its burden on the taxpayer or cancel the service. You can start this process by rejecting all non-contract increases and recover the $125,000 in Safe Restart funds.

There is no question that you are facing an enormous challenge to begin the process of turning things around. Staff have begun the process and demonstrated that they recognize the need for change. It's now up to you to take the steps that are beyond their control such as capping the "Salaries and Benefits" line item and only approving those increases that are beyond your control. To refresh your memory of the gravity of the situation we are facing I've attached some of the budget analysis work I've done in the past.
 

Jim Hutton