Problems with Our Budget Process

On December 01, 2023 staff presented the draft 2024 Budget to Owen Sound’s Council. If you watched the video of the meeting or reviewed the PDF of the draft budget, that is available on the city’s website, you will have noticed two characteristics that you won’t see in any other budget presentation for a municipality of our size. First you will see that about 60% of the presentation is composed of marketing or promotional material that informs members of council that ‘all is well’ and Owen Sound is doing great when compared to single tier municipalities with populations 3 or 4 times that of Owen Sound. This is what I’ve referred to as the ‘Infomercial’ portion of the presentation which frankly I believe was a waste of valuable staff time and is an insult to the intelligence of councilors and residents who know that all is not well when it comes to city’s financial health.

The second characteristic that will jump off the page for most is that the departmental budgets presented were at such a high level that it is impossible to critique line-item budget increases. As with the ‘Infomercial’ portion of the presentation Owen Sound is one the few municipalities in the comparator municipalities I used in my research study that doesn’t publish detailed department budgets. Cobourg’s draft budget for example is 313 pages of revenue and expense statements with no marketing material. You can review it at: 2024-Operating-Estimates.pdf (cobourg.ca) Owen Sound needs to abandon the sales and marketing portion of the budget presentation and just focus on the detail – much more detail – line-by-line detail at the budget holder level.

Council Budget Review Time
In December Council received a high level presentation of the city’s budgets and during the day that was set aside for this meeting spent about 3 hours, at the most, discussing the budget items. Our city’s budget deserves much more consideration by devoting much more time to the budget process. The review period should be five full days and the process should include the review of each and every department budget, line-by-line as presented by the budget holder as opposed to the City Treasurer.

To enable this each member of council should be paid a full time salary, at the City Manager’s level, during which will likely be a very intense five day budget review process. This will cost taxpayers in the order of $30,000 to $40,000. However, the return on this investment to taxpayers can be enormous. This would allow members of council to take a short leave of absence from their full time employment. In this process each budget manager would present their budget and have an opportunity to fully justify each and every line item. Ideally, each budget would start from a zero base as opposed to what was spent the previous year.

Budget Committee
One of Council’s handicaps is that not all members of council have the level of financial knowledge to effectively push back on staff requests for budget increases. So alternatively Council could establish a Budget Committee, consisting of two knowledgeable members of council and three members of the community with sufficient financial knowledge and experience to critically assess the appropriateness of each detailed budget.

The Committee should be delegated the authority to send draft budgets back for adjustment and present the details of the recommended budget for Council’s consideration at a special meeting of Council.

If Council were to implement either of the above options Owen Sound will be well positioned to start the turn-around process and end years of chronic budget increases.