Projected Growth of Taxes and Expenses

On October 12, 2016 Ian Boddy submitted an article Owen Sound Hub on his 2nd anniversary as the Mayor of Owen Sound. Reflecting on his first two years as mayor he stated:

“I pledged to change how we were conducting City business, to better explain our decisions, and to build consensuses with council, citizens and neighbours. My goal was to be forward thinking in the long term best interests of Owen Sound. I wanted to review our services to become as efficient as possible, and to develop strategies to attract growth to our tax base to bring our taxes to a competitive level for everyone.”

Unfortunately we are still conducting business as usual and Owen Sound's service delivery is the most inefficient of seven similar municipalities in a study group. Ian Boddy was first elected to Owen Sound Council in 2010. In 2011 Owen Sound expenses were $40,140,392 and taxes were $ 22,044,641. The draft Audit Financial Statements state that revenue from taxation was $33,095,738 and total expenses were $59,753,592 in 2022. In the 11 years, from 2011 to 2022 Taxes grew by 11.0 million at a rate of $1.0 million per year and expenses grew by $19.6 million at a rate of $1.8 million per year.

Figure 1, Projected Growth of Taxes and Expenses

The 2024 budget presented on 01 Dec 2023 contained a total increase in expenses of $2.2 million as shown below in figure 2. If the current rate of growth continues Owen Sound expenses will be $74,012,368 by 2030 and revenue from taxes will be $41,132,530. These are increases of $8.0 million and $14.2 million from 2022 for taxes and expenses respectively. Owen Sound taxpayers cannot afford to allow this to continue much longer. It is up to the current council to take aggressive action remedy this situation by directing major changes at city hall that, first and foremost will include downsizing the city hall administration.

Figure 2, 2024 Expenses as Presented at the 01 Dec 2023 Budget Meeting

If we use the equation for the taxation trend line shown in figure 1, we find that the forecast taxes in 2024 is $35,104,660. As we can see in the highlighted area labeled "NET TAX LEVEY" that based on the 2024 budget as presented the tax levy for 2024 is $35,347,653. This is $242,993 or 0.69% more than the forecast we calculated using the trend line equation.  Since the actual taxes are very close forecast taxes (less than 1% difference) we can say with a great deal of confidence that the forecasts shown in figure 1 will happen unless Council make major changes at city hall.

What is really interesting is that the total net expenses, highlighted in yellow, in figure 2 show us that in 2024 departments will be spending $5,447,390 more than they did in 2023. That's a growth in expenses of 13.2% in a single year. Note that the expense numbers you are seeing are what's left when departmental revenues are included. In 2022 the total expenses before revenues are subtracted was $59,753,592.  Although the budget presentation didn't mention the total expenses we calculate them, using the trend line formula for expenses in figure 1, to be $63,319,260.