News Release
HRM RECEIVES FIRST BOND RATING
(Tuesday, July 2/2002)-- It's Multi-Year Financial Strategy, the local economy's strong performance and steady assessment growth since the mid-1990s has resulted in Halifax Regional Municipality receiving an "A /Stable" rating from Standard and Poor's.
The international rating agency recently completed an independent assessment of credit quality for HRM and has released the "A /Stable" rating and report.
George McLellan, Chief Administrative Officer, said "This solid rating is particularly important, given the Province of Nova Scotia's recent approval to allow HRM to borrow directly on the international money market to help finance its portion of the Harbour Solutions Project." HRM is committed to funding two-thirds of the total project cost, and has asked for federal/provincial cost-sharing on the remaining one-third.
The Report states "The ratings incorporate the local economy's strong performances in recent years; a solid population base and taxable assessment growth, as well as an above average level of fiscal flexibility that comes from low tax rates and property tax burdens. In addition, there are good per capita personal incomes within HRM."
Mr. McLellan said this solid credit rating-- HRM's first-- confirms the efforts of Regional Council and staff over the past six years to build a strong financial base for the municipality.
He said "The benefit of HRM's Multi-Year Financial Strategy and the need to consider the long-term impact of the decisions we make every day, is clear in this rating. HRM has created a framework and a foundation which serves the citizens well. We cannot lose our focus on strengthening this base as we go forward."
Mr. McLellan stressed that the municipality must ensure that its debt continues to decline, and its reserves continue to grow.
The CAO added "Council and staff have shown that they can manage successfully in an environment that is financially prudent, and we are all committed to ensuring we act for the long-term benefit of the entire HRM community."
However, Standard & Poor's report cautioned that HRM's debt and debt service burden is high by Canadian and international peer standards. It stated the municipality has made "some noteworthy progress recently" in moving fully to pay-as-you-go funding for Capital Projects. Operating contributions to the Capital Budget have been increasing over the last two fiscal years and are expected to continue to increase going forward.
The report stated "A greater reliance on capital revenues and internal pay-as-you-go funding should enhance HRM's credit strength to the extent new debt issuance can be reduced and reserves grow larger."
Dale MacLennan, HRM's Director of Financial Services, said "This report shows that HRM is on the right path. We know we have more work to do. We also know what needs to be done to build on our strength.
The following are some excerpts from the Standard & Poor's Report:
"Thanks to moderate property tax rates and reasonable housing prices, HRM's property tax burdens are low to intermediate in comparison with peers in Canada."
"The Halifax (Regional) economy represents the single most important segment of the provincial economy, as the region's output, comprised roughly half of the provincial total at the end of 1999."
"The city's prospects are favorable in the middle term and beyond."
"HRM benefits from a prudent Regional Council and an experienced senior management team. A hierarchical framework of goals, principles, policies and practices guides HRM's financial activities as part of their Multi-Year Financial Strategy."
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George McLellan
Chief Administrative Officer
(902) 490- 4026
Dale MacLennan
Director, Financial Services
(902) 490-6308
Stephen Ogilvie
Standard and Poor's
(416) 507-2524
