Media Room

Highlights---2002/2003 Proposed Operating & Capital Budget

(Tuesday, February 12, 2002)

• The Approved Operating Budget is based on a reduction in the General Property tax rate of 1.1% which is in compliance with the HRM policy of not taking the tax lift for market value increases over and above the Consumer Price Index (CPI). Total General Property Tax revenues will still increase by $18 million due to new properties and CPI.

• As part of its taxation strategy, HRM intends to keep the average tax burden neutral (after inflation). Nearly 40% of the increase in residential assessment comes from new or renovated homes. The remaining 60% is due to re-assessments with an average increase of 3.7%. Inflation accounts for 2.6% of the 3.7% total. The proposed Budget contemplates a 1.1% decline in residential tax rates. Commercial tax rates will also decline by 1.1%.

• With the approval of the Capital Budget, total reliance on debt will decrease $7.9 million or 2.5%. This is the 3^rd year in row, total debt has declined.

• An Operating Surplus of $750,000 has been forecast for 2001-2002 the benefit of which has been included in the 2002-2003 Operating Budget.



• Included within the Operating Budget are sufficient funds to maintain service levels across HRM. The focus of the Budget is on fiscal health and stability, regional planning and customer service.

• The gross amount of the Operating Budget is recommended at $493.5 million. This includes a decrease in fiscal services items of $12.7 million, which is nearly offset by a $12.2 million increase in business unit costs. In the Operating Budget, there are business unit revenues of $108.8million. Non-departmental revenues are equal to $384.8 million.

• The gross amount of the proposed Capital Budget is $119.8 million, including commencement of the Harbour Solutions Project. Of this total, $31.4 million is proposed to be funded from debt. At the same time, HRM's total debt has decreased by over 12%. The increased use of Reserves and Capital from Operating is responsible for this decreased reliance on debt.

Included within the Capital Budget are:

• provisions for a new recreation facility in North Preston

• funding for a new arena in St. Margaret's Bay
• provisions for two new artificial soccer fields at the Mainland Commons and on the Dartmouth side of the Harbour. (The latter is dependent upon infrastructure funding from the Federal and Provincial governments.)
• The Capital Budget also provides for maintaining our investment levels in roads, streets and sidewalks. Also included in the Budget is funding for a new radio/paging system and a computer-aided dispatch system. Both are intended for emergency services (Fire, police and 9-1-1-. Funding is also available for data infrastructure linked to these communication tools for quicker and more accurate responses.
• Council will consider options for other services and initiatives during Committee of the Whole debate (beginning next week) that may amend these recommendations

The following are the proposed general rates of taxation for Residential and Resource Assessment:

Residential Tax Rates (per $100)

	Current Tax Rates	Proposed Tax Rates	Change per $100	Percent Decline
Urban	1.331	1.316	-0.015	-1.1%
Suburban	1.222	1.209	-0.013	-1.1%
Rural	1.016	1.005	-0.011	-1.1%

The following are the proposed general rates of taxation for Commercial, Business Occupancy and Machinery and Equipment Assessment:

Commercial Tax Rates (per $100)

	Current Tax Rates	Proposed Tax Rates	Change per $100	Percent Decline
Urban	3.395	3.358	-0.037	-1.1%
Suburban	3.395	3.358	-0.037	-1.1%
Rural	2.82	2.789	-0.031	-1.1%

Dale MacLennan, Director, Financial Services
(902) 490-6308

Bruce Fisher, Manager, Financial Planning
(902) 490-4493