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HRM Preparing for a Deficit-Free Year-End
(Tuesday, February 11/2003)-- An unusually harsh winter has taken its toll on the Halifax Regional Municipality's current operating budget.
For the first time in four years, HRM may be facing an operating deficit this year.
Near record snowfall so far this winter has driven Snow and Ice removal costs more than $4 million above budget. This figure accounts for most of the overall projected deficit. However, HRM staff is currently identifying specific actions to eliminate the municipality's projected cost overrun.
A staff report being presented to Regional Council today states that current projections forecast an operating deficit of $986,000 this year. This is a significant turnaround, compared to a Second Quarter projected surplus of $462,000.
George McLellan, Chief Administrative Officer, said that despite a deficit in the Snow and Ice Program of $4.3 million, the overall HRM deficit has been contained to less than $1 million.
Mr. McLellan said "Staff are committed to consider all planned expenditures to March 31, 2003 and to ensure that every opportunity to improve HRM results overall is explored."
HRM's Multi-Year Financial Strategy, a comprehensive Budget Review process, and effective management practices have all combined to provide the municipality with financial stability and fiscal predictability. For the past three years, the municipality has recorded an operating surplus each year, and it is anticipated this year will have the same positive result.
The net departmental position is forecast to be a deficit of $4,548,000, compared to a second quarter projected overrun of $877,000. Increased costs are related to the Snow & Ice Program. Based on the number of snow events to date and those anticipated to the end of the year, a deficit of $4.3 million is being projected for this program. However, actual weather conditions will dictate the final year end results.
Overall, the departmental projected deficit is offset by a projected increase in Deed Transfer Tax based on activity year-to-date; an increase in "own source revenue" which reflects higher than anticipated interest rates; and a decrease in the provision for valuation allowance, which is based on a review of actual billings and collections for the year-to-date (primarily related to payments-in-lieu of taxes).
Chief Administrative Officer
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