The illusion of Expense Reductions

On January 29, 2024 City Treasurer updated us on the budget and informed us that recent changes had reduced the current tax increase to only $914,784. However some of these changes are a cause for concern. Some examples are;

1. 100% of the Grey Sable Conservation Levy of $304,808 was transferred to water rates this year.
This is not reducing expenses it’s just moving them from taxation and hiding them in the water rates to give the illusion of reductions. This should not happen!

More importantly they decided to charge based on assessment so if your assessment is high you will pay more to this agency which will be added to your water bill.
If you examine the draft budget present on 01 Dec you will see that $1,597,593 in expenses was already charged to Water and Wastewater. Burdening cost centers with the cost of services they receive from other departments is not uncommon. However this seems to be a one-way street and this practice appears to be selective. The city should either fully burden all cost centers or none.

I think we need to re-examine our relationship with Grey Sable. Why are we contributing to this agency when they spend most of their resources working in the watershed in other municipalities? Grey Sable does little or no work within the Owen Sound boundaries so we need to end this relationship. We need to end this relationship – we just can’t afford it!

2. staff are recommending that the Art Gallery’s $50,000 debt payment be moved to the 2023 operating surplus. First the fact that there is a operating surplus from 2023 means that they charged us more taxes than they needed. All of this surplus should be used to reduce this year’s taxes. The recommendation states:
“Staff recommends funding the balance owing to the Art Gallery deficit from the 2023 operating surplus and the annual payment of $50,000 be removed from the 2024 operating budget and all future years.”

For those that don’t remember the Art Gallery debt occurred during the time the Art Gallery a Not-for-Profit. The Directors of this Not-for-Profit found they couldn’t continue operating it and asked to come back to the city. However they had run up some $700,000 in debt. This debt was the responsibility of the Directors of this Not-for-Profit as per the case law that existed at the time. However Mayor Ian Boddy told us that it was appropriate for the city to assume this debt because the Art Gallery would pay the city back which it has been doing at a rate of $50,000 per year. The Mayor made a promise to us at that time and he will be reneging on that promise if the remaining debt, which is likely in the order of $400,000 is paid from the 2024 budget and all future budgets until it’s paid.

If we do this it will give the illusion that the Art Gallery is doing better. They have already moved some of the Director’s Salaries & Benefits to Tourism which already has the affect of reducing the Art Gallery’s expenses. The facts are that the Art Gallery’s is failing. The Membership line item in the 2024 budget shows a revenue of $7,500 down from $9.500 in 2023 and $15,500 in 2022. As well the revenue from the Gift Shop is budgeted to be only $3,650 in 2024 down from $9,650 in 2023. The Gift Shop had budgeted for over $20,000 in revenues in 2021 and 2022 now we are looking at revenues of only $3,650. This is a clear indication that traffic is down significantly. The Art Gallery is failing. It's time has come to Discuss the Future of the Art Gallery – we just can’t afford it!

3. Parks is adding a full time position and eliminating seasonal and student time for a net savings of $20,000. This is clear a migration of work from seasonal to full time which will cost taxpayers in all future budgets. This should not happen!

We need to do real expense reductions and not just move expenses around to give the illusion of reductions. Here is what should happen if the city operated as an efficient business:

1. End the relationship with Grey Sauble Conservation, and save taxpayers $304,808

2. Hold the Art Gallery to its commitment to pay its debt – the Mayor promise.

3. Do not add another full-time Parks position – stop growing the workforce!

4. Donate the Art Gallery to the County and if they don’t want it, do what we did to the Airport, which was also a service catering to a small group, shut it down.
    

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