Our Council is not being presented with clear, fully transparent, budgets for review and approval. Instead our councillors are presented with high level, somewhat confusing, budget sheets which don’t show the whole picture. Unlike many other municipalities our budget sheets do not provide our decision makers with sufficient detail to make informed decisions. In addition councillors are bombarded with what is seen by many as a sales and marketing pitch, touting how great Owen Sound is performing while mentioning municipalities like Vancouver and Chicago.

Present All City Budgets
When we do get to the budget sheets we find they are lacking so much detail that they really are not all that useful for informed decision making. The presentation does not show council the entire business. Water and Wastewater for example is only shown on the department summary sheet and then only some of the department’s revenues and expenses are shown. We see expenses of $1,597,593 which is offset by revenue of the same amount. However when we examine the Water and Wastewater budget forecast, which was presented last June, we see the total projected expenses for 2024 are $6,479,194 with projected revenue from water billing of $6,419,194.  Water and Wastewater is a city department and as such all of this department’s revenue and expenses should be included with the other departments during the annual budget briefing. In the interest of transparency, council and taxpayers should see the full picture including Grants and Transfers.

Detail All Internal and External Transfers
When we examine the budget sheets we see a number of opaque, generic line Items such as: “Internal Cost Allocation”, “Transferred to Other Departments”, “External Transfer” and “Legal and Contract”. Some are obvious cost transfers to other departments which is understandable. For example, if Engineering performs work at the Art Gallery that is outside its scope, it is reasonable that the Art Gallery transfer funds to Engineering to cover the cost of that work. However, why are we only doing this for some departments and not others. We don’t see a line item showing the Art Gallery transferring funds to Water and Wastewater to cover the cost of their water and sewer. Why Not!  In any event all transfers should be fully identified to show what funds are transferred and why they were transferred. Line items such as “Legal and Contract” should be broken down to identify exactly what the cost was “Legal?” or “Contract?”

Fully Burden All Cost Centers
Instead of just burdening some of the cost centers with the cost of some of the services they receive from some of the other departments, all Cost Centers should be fully burden with all of their costs involved in providing their services. For example, most of the operating costs for the Library are identified and shared with our partner municipalities. However there are other costs in operating the Library that are not shared. The Library consumes resources from the city’s Finance, Accounting, Payroll, and Human Resources departments but 100% these costs are covered only by Owen Sound Taxpayers. That doesn’t seem fair!

However, if all cost centers were fully burdened with all administrative support costs and all Water and Wastewater costs etc., we would have a more balanced relationship with our partner municipalities.

This is particularly important when it comes to Water and Wastewater since we pay for its cost of operations through our water bills. If city departments, like the Library, are not paying for their Water and Wastewater costs, then this cost is inappropriately transferred our water bills.

Amortization Expense
Fully Burdening all costs centers should also include showing their annual Amortization Expense. Currently we only see a global figure for amortization expense in the financial statements. This needs to be shown as an expense in each departments operating statement.
Amortization Example:

Stop the Sales Pitches
This portion of the presentation makes use of big yellow stars to draw attention to successes. However when you take a closer look you see that what is being touted as a success is really not a success at all. For example on page 7 we see tax comparisons on Detached Bungalows for Grey-Bruce showing Owen Sound with the highest taxes of the 12 municipalities at $4,268 which is $1,275 above the average. This is not good news! However, in spite of this unflattering comparison, the slide is dominated by two huge yellow stars with the words “THIS IS A HUGE SHIFT”.  This is clearly designed to condition our councillors into believing that having the highest taxes in all of Grey and Bruce counties is really not all that bad.

The Solution –– To Improve Transparency and Fairness

1.   Provide a simple, transparent, budget presentation that fully identifies the source of all revenue, (taxation, Grants, Water Billing, Fees and Other Revenue etc) and all expenses for all departments including Water and Wastewater.

2.   Fully burden all of our cost centers with all of the costs involved in delivering their services, including Amortization Expense and the cost of the Water and Wastewater they consume. This will result in a distribution of costs among partners that is fair to Owen Sound Taxpayers.

3.   We need all of the city’s business units to be briefed at budget time including Water and Wastewater. Leaving out this important department inappropriately hides its operation at budget time.

4.   The budget needs to fully detail all Internal and External Transfers.

5.   Stop the Sales Pitches and only deliver the detail. Members of Council and residents are quite capable of understanding the impact of the detail. See how Meaford and most other present their budgets.

A Good Example

Use this Link to View the Meaford Budget:
https://www.meaford.ca/en/our-government/resources/Documents/2024-Budgets/2024-Capital-and-Operating-Budget-Book-February-12-2024.pdf

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