2023 Service Review

Summary of the Facts

It’s abundantly obvious that when compared to seven similar municipalities Owen Sound does not look good. The other municipalities are doing much better. In doing so they provide Owen Sound with a blueprint for improving municipal performance. This study exposed a number of areas that Owen Sound could explore to improve its financial outlook.

The most reliable data sources I used for this study were Statistics Canada, the municipal Audited Financial Statements, the municipal Financial Information Returns and the annual BMA Municipal Studies. I routinely found staff generated financial and workforce numbers didn’t always agree with these official documents.. Therefore, although I reviewed municipal generated data I placed more weight on the official documents.

I am confident that the comparator municipalities I selected for this study are the best possible, lower tier, municipalities to compare and contrast to Owen Sound. The top three comparators have characteristics that are very close to Owen Sound in the areas of Population, Population-Density, and Occupied-Dwellings and one of them, Cobourg, is nearly identical to Owen Sound. .

Here is a short summary of the facts that were established using; Audited Financial Statements, Financial Information Returns and BMA Reports. These are all easily verifiable using the references provided.

Owen Sound taxes are $10.6 million higher than the average of the three primary municipal comparators and $6.5 million higher than the nearly identical municipality of Cobourg.

Cobourg’s revenue from taxation is only 43.9% of their total revenue while Owen Sound revenue from taxation is 50.5% of its total revenue. This is the result of Owen Sound’s revenue from other sources underperforming and the fact that Owen Sound does not have one Profit Center to offset taxes.

Owen Sound’s residents are the poorest residents in all of the municipalities in the study group with a median household, after-tax income is only $57,600. This is $11,900 less than Cobourg’s median household, after-tax income which is $69,500.

Owen Sound expenses are $11.0 million higher the average of the three primary comparators and $3.8 million higher that Cobourg’s.

Owen Sound spends $3.9 million more on, non-protective services, Salaries & Benefits than the average of the three primary comparators
and spends $1.5 million more than Cobourg - a nearly identical municipality to Owen Sound.

Owen Sound has 8 more employees, almost all managers, not including Protective Services, on the Sunshine List than the average of the three primary comparators and 8 more than Cobourg. This is costing Owen Sound $882,573 more in salaries & benefits expense than Cobourg.

Owen Sound employs 31 more, non-protective services, employees than the average of the three primary comparators and 25 more employees than Cobourg.

In 2006 Owen Sound employed 111 full time, non-protective services, employees. This number grew to 133 by 2021. During this period Owen Sound’s population contracted by 76 residents.

There was a noticeable migration of the workforce from part-time & seasonal to full-time.

There was a noticeable migration of the workforce from Operations to administration.

Owen Sound spent $12 million on Economic Development between 2012 and 2021 and taxpayers did not receive any measureable benefit for these tax dollars.

Owen Sound is providing Recreational and Cultural Services to a population of 44,197 and only charging 21,612 residents for a preponderance of the cost of these services. Residents of Meaford and Georgian Bluffs pay only their user fees to use these services which represent only a small portion of the total cost. Owen Sound needs to publically announce that effective January 2025 only Owen Sound residents will be able to use these facilities. this will drive Meaford and Georgian Bluffs to the negotiations table.

Owen Sound is not maximizing the use of shared services with other municipalities to reduce expenses.

The Facts are the Facts! They should not be discounted just because they don’t support the notion that Owen Sound is a financially healthy community managed by a fiscal responsible Administration. The truth is that Owen Sound has not been well managed for many years as compared to other Ontario municipalities.

Do the Results Make Sense?
One way we can verify the accuracy of the Salaries & Benefits expense is to see if there is any correlation between the Salaries & Benefits difference and the difference in the number of employees. Based on Audited Financial Statements, Owen Sound spends $1,537,486 more on Salaries & Benefits than Cobourg. Based on the Financial Information Returns , Owen Sound employs 24 more employees than Cobourg. If we divide the Salaries & Benefits difference by the employee difference we get an average Salary & Benefits. This works out to be $64,062. This seems to be a reasonable value for the average Salary & Benefits per employee.

Given that Cobourg is nearly identical to Owen Sound and is delivering very similar services we can say, with a high level of confidence, that Owen Sound is indeed overstaffed by a minimum of 24 employees

As well as the 2021 FTE and Salaries and Benefits gap between Owen Sound and Cobourg we can also use the workforce growth data. We saw that Owen Sound’s Salary and Benefits Expense grew at a rate of $210,368 per year between 2015 and 2021 in figure 23 based on the Audited Financial Statements. During this period we saw that the full time workforce grew by at a rate of 3.4 employees per year based on the Financial Information Returns . If we divide Salary and Benefits Expense growth by the full time employee growth rate we can estimate the average salary & benefits per employee. This works out to be an annual salary of $61,872 which is not only reasonable but very close to the $64,062 figure we calculated above.

The importance of these checks cannot overstated. We not only used two separate data sources, but two different data sets to test the reasonableness of the results. This gives us a very high level of confidence in the results that show both an excessive rate of growth in the workforce between 2015 and 2021 and the size of the gap between Owen Sound and Cobourg in 2021 that shows that the Owen Sound workforce is overstaff by at least 24 employees.

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	Owen Sound taxes are $10.6 million higher than the average of the three primary municipal comparators and $6.5 million higher than the nearly identical municipality of Cobourg.
	Cobourg’s revenue from taxation is only 43.9% of their total revenue while Owen Sound revenue from taxation is 50.5% of its total revenue. This is the result of Owen Sound’s revenue from other sources underperforming and the fact that Owen Sound does not have one Profit Center to offset taxes.
	Owen Sound’s residents are the poorest residents in all of the municipalities in the study group with a median household, after-tax income is only $57,600. This is $11,900 less than Cobourg’s median household, after-tax income which is $69,500.
	Owen Sound expenses are $11.0 million higher the average of the three primary comparators and $3.8 million higher that Cobourg’s.
	Owen Sound spends $3.9 million more on, non-protective services, Salaries & Benefits than the average of the three primary comparators and spends $1.5 million more than Cobourg - a nearly identical municipality to Owen Sound.
	Owen Sound has 8 more employees, almost all managers, not including Protective Services, on the Sunshine List than the average of the three primary comparators and 8 more than Cobourg. This is costing Owen Sound $882,573 more in salaries & benefits expense than Cobourg.
	Owen Sound employs 31 more, non-protective services, employees than the average of the three primary comparators and 25 more employees than Cobourg.
	In 2006 Owen Sound employed 111 full time, non-protective services, employees. This number grew to 133 by 2021. During this period Owen Sound’s population contracted by 76 residents.
	There was a noticeable migration of the workforce from part-time & seasonal to full-time.
	There was a noticeable migration of the workforce from Operations to administration.
	Owen Sound spent $12 million on Economic Development between 2012 and 2021 and taxpayers did not receive any measureable benefit for these tax dollars.
	Owen Sound is providing Recreational and Cultural Services to a population of 44,197 and only charging 21,612 residents for a preponderance of the cost of these services. Residents of Meaford and Georgian Bluffs pay only their user fees to use these services which represent only a small portion of the total cost. Owen Sound needs to publically announce that effective January 2025 only Owen Sound residents will be able to use these facilities. this will drive Meaford and Georgian Bluffs to the negotiations table.
	Owen Sound is not maximizing the use of shared services with other municipalities to reduce expenses.