A better way

Trends tell a story

Numbers are meaningless unless they tell a story. A single number, or numbers without context—or presented in a blizzard of numbers—can’t do that. It takes a defined series of numbers to identify trends, reveal patterns and measure relative performance…to tell a story.

Milford resident Steve Sykes pulled apart the County’s financial statements in search of a clearer way to present this information. His method has landed on eight general buckets (six are arrayed on these pages).

They are salaries, wages, and benefits; contracted services to consultants and such; materials and supplies needed to provide municipal services; interest on long-term debt; and external transfers to agencies with cross-jurisdictional responsibilities.

From this presentation of municipal finances, Sykes has posed a list of questions and concerns (below)

It is not a complete picture—it does not reveal, for example, the municipality’s hazardous net debt position— but it does give readers a better sense of the broader trends of spending increases inside the core functions of the municipality.

Shire Hall is embarking on a review of its budget processes this summer—in anticipation of a massive increase in 2025. Residents may want to urge their representatives to consider improvements to its financial reporting. Only by knowing where you’ve been can you make good decisions about where you are going.

Revealing

Issues and concerns

The salaries, wages, and benefits trend line seems inappropriately high, given modest population growth, limited service demand, and inflation.

The materials and supplies line has grown significantly, and even without a decrease in 2021, the 2022 value is still almost $4 million more than 2016 levels (38.3 per cent more). What explains this rise?

The Contracted Services line took a big jump in 2021, and the increase in 2022 put that total at over $3.7 million more than 2016 levels (27.8 per cent more). What explains the uninterrupted trend of rising costs for consultants and advisors?

Interest on long-term debt, predictably enough, spiked in 2022. However, it’s not clear to what extent the spike was due to more borrowing or interest rate hikes. Shouldn’t this be broken out?
External transfers, payments to agencies with share jurisdictional responsibilities, took a rather large jump in 2022 and are 17.4 per cent higher than 2016. Why?

Overall operating expenses are up $19.4 million in 2022 compared to 2016, or 33.2 per cent. Operating expenses are budgeted to be $75.2 million in 2024. Shouldn’t the municipality have experienced some post- Covid relief in spending? Is this a permanent, structural change?

According to Stats Canada, the 2016 population of the County was 24,735, and the 2021 population was 25,704. That’s a compound annual growth rate of 0.77 per cent from 2016 through 2021, nowhere near the growth of this spending.

The bloat of the spending here is significantly higher than the rate of inflation.