Art Gallery Incorporation Legacy - Part 5 of 6

Why has Council not Learned from Past Mistakes

Risk of Repeating Past Oversight Failures
It would appear that the same lack of effective oversight that occurred in 2016-17 continues today in regard to the Art Gallery operations. The only difference from 2016 is that they’re increasing the budgets up-front to avoid showing a deficit at the end of the year. The overspending that created the 2017 problem continues today with the full blessing of Council.

On November 20, 2017 the Owen Sound Hub summarized the Council’s ineffective oversight Owen Sound Hub November 20, 2017

On October 31, 2017 Mayor Ian Boddy was interviewed by the Bayshore News Team on the Art Gallery’s $530,000 deficit where he let it be known that this was a surprise.

This statement from the mayor confirms that in anticipation of the Art Gallery’s pending Incorporation, Council had prematurely delegated its fiduciary responsibilities for the Art Gallery. This is also support by the fact that the 2017 budget was presented with no entries for the Art Gallery in the city’s budget.

However, very little has changed since 2017. The Art Gallery Advisory Committee, which replaced the TTAG Board of Management, has had at least four members that had also served on the TTAG Board and the current council has four members that were on Council in 2017. As was the case with the TTAG Board, the current Advisory Committee establishes Gallery’s business goals and sets a budget that is routinely rubber-stamped by Council.

Deceptive Practices
Council has also taken several steps to hide the declining business viability of the Art Gallery. For example, last year they approved the transfer of part of the Director’s salary to the Tourism Department. You will also see in the 2024 budget that the Gallery receiving $43,600 in revenue from internal transfers in 2024 which is up significantly from the $5,495 it received in 2023. As well it was recently announced that that the Tourism and Events is moving from the waterfront to the Art Gallery. Clearly this is an effort to disguise the fact that fewer people are visiting the Art Gallery as shown by the declining sales in the Gift Shop.

The Risk is Not Limited to the Art Gallery
However this practice is not limited to the Art Gallery. As they did with the Art Gallery Board, Council has delegated budget oversight to the Library Board, and routinely rubber-stamps their budget. For example, the Library presented a budget with a significant increase this year and not one member of Council challenged it.

In addition, the Chief Librarian is responsible to the City Manager but responsive to the Library Board and the membership. This is the same three-pronged reporting structure that the Art Gallery Board complained of in 2015 and prompted their desire to incorporate.

But it doesn’t end there. Council has also delegated financial management and oversight to the Police Services Board. The city is required to have a Police Service Board but I have not read any provincial legislation that requires Council to give the Board unfettered access to the city purse. Yet, the Police budget is routinely rubber-stamped every year and like the Art Gallery this budget has been allowed to grow exponentially since the OPP proposal was rejected by Council in 2017.

THE SOLUTION
The solution is simple Council needs to assume full control and oversight over the Art Gallery and all Boards and require quarterly financial reports. Above all Council should review all end-year results in advance of setting the budget for the following year. We elect our city officials to manage all city finances. The Art Gallery Advisory Committee, the Library and Police Services Boards are not elected and should not be delegated financial oversight responsibilities which are the exclusive domain of our City Council.

Budget Committee
To assist Council with its financial oversight responsibilities, Council should establish a budget committee with members from the community with financial education and experience. The Committee should be given the authority to review quarterly financial reports for all city Boards and departments and advise council of concerns as well as send back annual budgets when offsets are not included for budget increases.

____________
Note: establishing such a Budget Committee was a campaign promise made by Deputy Mayor Greig. I wonder when he is going to establish this committee. sgreig@owensound.ca

A Major Risk to Taxpayers
As important as effective oversight is, it is not the most important lesson to be learned from this Art Gallery Incorporation Experiment. By far the biggest lesson to be learned from the failed Art Gallery Incorporation is the exposed risk to the Taxpayers of a Council’s ability to ‘give-away’ city assets or burden future council with millions of dollars of encumbered assets or discretionary debt.

The loaning of assets like the Art Collection, leasing a multi-million dollar building for only $1.00 or building a new or expanded Art Gallery are discretionary decisions. In other words unlike replacing major sewer line or repairing of critical infrastructure, these are not critical decisions that are necessary to maintain existing services. As such, when discretionary decisions involve millions of dollars, they should be put to Owen Sound residents in the form of a referendum. We need a By-Law to this effect to bind future Councils to holding a referendum when discretionary decisions involve millions of dollars.

Conclusion: MAKE YOUR VOTE COUNT
Given this current council’s practice of ignoring and suppressing voices on issues important to taxpayers, (remember the 2024 budget for example), the only way you are going to see a bylaw limiting Council’s ability to make multi-million discretionary decisions is to seek this commitment from the candidates you support in the next election.

As you may have observed there is a group on the current council who are determined to give their supporters in the Art Community a new or expanded Art Gallery. If this Council rushes forward and contracts for a new Art Gallery building without a referendum, then the solution is to only vote for candidates in the next election who commit to putting the contract on hold until it is supported by the majority of residents in a referendum. This would pretty much exclude any member of the current council who votes for building a new or expanded Art Gallery without a referendum.

- - - - - - - - - - * * * * - - - - - - - - - -

Art Gallery Incorporation Legacy Part 6