From the Communications Office
HRM Tables Balanced 1999/2000 Operating/Capital Budget
Not for Release before 6 p.m. Tuesday, February 16/99
(Tuesday, February 16/99)-- Financial stability and fiscal predictability are the hallmarks of the proposed 1999/2000 Operating and Capital Budget tabled before Halifax Regional Council this evening.
The recommended $455.7 million budget, if approved by Council, is a balanced one, with no general property tax increase and no change in the HRM tax structure of urban, suburban and rural rates.
Ken Meech, Chief Administrative Officer, said the proposed budget this year lays the groundwork for HRM to achieve financial stability next year-- 2000/2001-- and beyond."
Mr. Meech said " There is light at the end of the tunnel. This year's budget represents short-term pain, for long-term gain-- with very little impact on the delivery of programs and services."
He said the goal to attain financial stability and predictability as endorsed by Regional Council last fall will remove the "financial albatross" that has burdened HRM since amalgamation.
Mr. Meech said the region's Budget Plan is a realistic one. It calls for greater cost-efficiencies in the delivery of programs and services, without seriously affecting the quality of the program and service.
"This new approach provides us with the ability to focus on future direction, rather than reacting to the past, " he said. "Throughout the Budget review during the past number of months, we have further rationaized services, which has resulted in greater efficiencies and cost-savings."
George McLellan, the Deputy CAO who is leading the Budget Process, said "This proposed Budget, if approved by Council, provides a financial blueprint which could return a $15 million dividend to the municipality next fiscal year. That's $15 million that could be applied against debt, used for Capital projects or directed towards programs and services."
"This money would come from funds used to eliminate the operating deficit this year and from some unique projects that had to be undertaken this year to launch us into the next millennium, " he said.
The proposed Capital Budget of $45.3 million this year is down from previous years. This gross amount will be offset by $2.4 million in cost-sharing on some projects, as well as $9.3 million in reserve withdrawals. In addition, HRM is expecting a Provincial Capital Grant of $4.8 million during this fiscal year.
It is proposed that residential sidewalk snow clearing continue to be covered through an area rate; that HRM implement an aggressive policy to sell surplus municipal land and that Metro Transit fares increase by 5-cents to $1.70 in January, 2000.
The provincial phase-out of the $22 million annual cost of Social Services to HRM over a five-year period will continue. HRM has budgeted to pay out $4.4 million less for this purpose this year. Total pay-out this year is estimated to be approx. $15 million.
Assessment increases were modest this year and did little to offset growing expenditures. Residential assessment grew by only 1.9 per cent, while commercial assessment remained flat.
Combined with other factors, this has produced a modest revenue increase of $1 million or 0.4
per cent in property tax revenues. Total HRM assessment is $15.3 billion.
HRM is projecting an operating deficit of $11.8 million this fiscal year and that amount has been included as an expenditure in the 1999/2000 Budget. In addition, the value of all collective agreements negotiated to date has been included in the Operating budget, along with an estimate for those contracts to be concluded this year.
The impact on staff as a result of the proposed Budget translates into a workforce reduction of 127 positions. Attrition or retirement accounted for some positions, leaving 82 FTE ( Full-Time Equivalent) positions affected.
It is proposed the bulk of the cuts include 66 FTEs ( involving 110 seasonal employees now on lay-off) in Works and Natural Services; and 16 other positions spread throughout the organization. Efforts will be made to place as many of these 16 individuals as possible through the HRM Priority Placement Program.
The municipal cost of education is forecast to increase by $1.3 million this year, to $60 million. Supplementary education costs levied in Halifax and Dartmouth are proposed to remain the same.
HRM's debt charges for the coming fiscal year are forecast at $55 million, an increase of $10.7 million. The major causes of the increase are the new solid waste system ($7 million) and amalgamation costs ($2.4 million). These charges represent 12 per cent of operating expenditures.
The total issued and committed debt of HRM is estimated at $331.3 million, as of March 31, 2000. This figure includes all of the debt transferred by the previous municipal units of Halifax, Dartmouth, Bedford and County of Halifax; transition expenditures; works in progress and the proposed Capital Budget. This is a decline of $16.3 million, or about 5 per cent, over the start of 1999/2000.
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Contact
George McLellan
Deputy Chief Administrative Officer
490-4023
