News Release
Harsh Winter Takes Its Toll on HRM Budget
(Monday, February 25/08)-- An exceptionally cold and stormy winter, overtime and rising fuel prices have put the Halifax Regional Municipality's third quarter projections into a $1.9 million deficit position.
The total gross projected deficit is $12 million before adjustments. This includes the cumulative deficit of $6.1 million (which includes $2 million related to the Snow and Ice program) to December 31, 2007; an additional $2.8 million projected over expenditure in the Snow and Ice Control program in January and an adjustment of $3.2 million to record the 2006/07 dividend received by HRM from the Halifax Regional Water Commission.
To partially offset these projections, restraint measures put in place by Chief Administrative Officer Dan English to cutback expenditures was strongly embraced by staff and the business units identified $4.2 million in savings. Also, it is projected that $2 million be withdrawn from the Snow and Ice Reserve, $1.3 million form the Operations Stabilization Reserve and $1.3 million in reductions projected in a variety of other accounts; plus, HRM was able to book as a receivable an additional $1.4 million as part of its White Juan claim to the federal disaster relief program.
Mr. English said the 2rd quarter projection forecast a $2.2 million budget deficit, and despite the considerable spike in the numbers since that time, the projected 3rd quarter deficit projection showed a slight decrease to $1.9 million.
"Unfortunately, we had little control over the weather or the cost drivers associated with it," Mr. English said. "Fortunately, we were able to draw funds from our rainy day accounts (reserves.) With a little more than five weeks remaining in the fiscal year, We are determined to mitigate the deficit and end the year balanced against the budget."
Mr. English said the extremely cold temperatures and the exceptionally high number of winter storms took a heavy toll on the snow and ice budgets, as well as the fuel and heating cost accounts.
"We're not blaming the bad winter for all of the projected operating deficit, but Mother Nature can certainly step forward and take a bow. On our side of the ledger, I want to thank HRM for the tremendous efforts they have made to cut costs, while at the same time continuing to provide a high level of service to our residents."
In Information Report on the third quarter 2007/2008 financial status was included in Regional Council's agenda package this week.
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Dan English
Chief Administrative Officer
490-4026
