News Release
Error by Province Forces Rewrite of HRM Budget
(Thursday, March 11, 2004)-- HRM residents may see limited tax rate reductions and changes to planned services, thanks to an error made by the Provincial Assessment Division of the Department of Service Nova Scotia and Municipal Relations. The error resulted in a sudden, unilateral cut by the Province to the assessment of a large commercial property which in turn cuts HRM's anticipated tax revenue by $5.2 million.
"HRM, like municipalities across the province, relies upon the integrity of the assessment roll provided by the Province every December. The integrity of the information on this roll is critical to the accuracy and completeness of financial estimates and our budget," Mayor Peter Kelly said.
HRM staff discovered the error on March 8 in a meeting with one of the municipality's major businesses. The business had requested the meeting to discuss the impact of the Province of Nova Scotia's assessment process for their business.
During the meeting it was discovered the Province had given the business an assessment figure close to $150 million lower than the assessment provided to HRM in December. The discovery of the Province's error may mean it is too late for HRM to appeal the assessment, if it wanted to take that route.
"We certainly don't want to penalize the business in question. Our concern remains that the Province can negotiate commercial assessments, without consideration or input from municipalities who have been paying for the bill for the last four years without input in the process. In short, the Province's current assessment system lacks transparency, consistency and appropriate controls to ensure the assessment information is correct," Mayor Kelly said.
"HRM staff are currently reworking the budget for the upcoming fiscal year to compensate for the $5.2 million shortfall in revenue. Alternatives for how to deal with the drop in revenue will be brought forward to HRM Council. We had planned to table the 2004-05 budget on March 30, but this has forced a delay until April 6, at the earliest," Chief Administrative Officer George McLellan said..
"After the year we have had, dealing with a change of this magnitude is not easy. One way or another the people of HRM will have to deal with the result of this error. We're going to work as hard as possible to minimize the negative impact," Mr. McLellan said.
Council voted to ask for the Province to conduct a forensic audit and document any other changes to the assessment role of more than 10% made since the 2003 assessment roll was filed. Council also voted to request an explanation from the Province for the radical change in assessments provided to HRM and the business in question.
"We are required to pay the Province of Nova Scotia close to $5 million annually to undertake the assessment process. We can't control the process and we have no way to verify the results. Obviously, it's critical that the Province at least be accountable or we all have problems to deal with," Mr. Kelly said.
- 30 -For More Information
Mayor Peter Kelly
490-4010
George McLellan, CAO
490-4026
