NEWS RELEASE

Regional Council approves revised debt-servicing plan

(Tuesday, November 17, 2009) - Halifax Regional Council this evening approved a revised five year debt policy that would see debt decline by three per cent per year.

This is a new approach to debt repayment that better reflects the current economic and fiscal environment. HRM will continue to see debt decline every year yet not to the detriment of growth.

“We have been aggressive in reducing debt and have succeeded in reducing it significantly but now it is time to position our community to grow over the coming years,"” said Mayor Peter Kelly.

The Municipality wants to reduce reliance on debt and increase capital from operating or reserves. With this new debt policy, a major piece of the Municipality’s review of the Multi-Year Financial Strategy will be in place. The new approach ensures the Municipality remains on the right path towards continued debt repayment, but also includes a modest economic growth factor providing more flexibility.

The former debt policy set HRM’s maximum borrowing at 80% of the amount of debt paid in any given year. That debt reduction policy was ambitious and appropriate for improving finances in the post amalgamation days and saw the debt fall by 82.5 million over nine years.

Chief Financial Officer Cathie O’Toole explained that while the debt reduction strategy has been successful it no longer suits HRM’s growth needs.

“HRM has grown at a rate greater than anticipated when this strategy was originally put in place. For example, there were 20 per cent more homes in the municipality in 2007/08 than there were in 1995/96,” she said.

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Contact:

Mayor Peter Kelly
(902) 490-4010

Cathie O’Toole
Chief Financial Officer
(902) 490-6308

Bruce Fisher
Manager, Fiscal and Tax Policy
(902) 490-4493

Shaune MacKinlay
Manager, Public Affairs
Halifax Regional Municipality
(902) 490-6531