The Chronicle Herald (Provincial)
• Councillor says HRM should dig into rainyday funds
It’s time to dig into rainy day savings, Halifax regional council heard Wednesday.
“If you look outside, it’s pouring,” Mayor Mike Savage said during discussion about recasting Halifax Regional Municipality’s 2020-21 operating budget to deal with COVID-19 revenue losses.
“We haven’t had rain like this in my lifetime.”
Coincidentally, Savage’s lifetime reached 60 years with his birthday Wednesday.
On Tuesday, Jacques Dube and Jane Fraser, the respective chief administrative and financial officers for the municipality, painted a picture that required an $85.4-million reduction in a previously forecast billion-dollar operating budget that included expenditures of $832.41 million and a projected gross capital spending of $179.8 million.
Each of the municipality’s 13 business units were directed to cut department budgets and a good portion of the reductions sought came from nearly $21.7 million in compensation to be realized in a hiring freeze and the mid-april announcement to cut 1,480 casual, seasonal and temporary employees.
Another $25 million was to be cut from capital operating expenses through postponed or deferred projects.
Still, many councillors thought there might have been other options for budget reductions.
Coun. Waye Mason (Halifax South-downtown) kicked off Wednesday’s debate with a motion requesting a staff report that outlines an operating budget alternative to retain funding for all proposed hiring and to restore vacancy management to normal levels, volunteer firefighter recognition, grants and programs up to no more than $33 million.
Mason’s motion pushed instead for a combination of a reduction in debt payment of up to $15 million, conversion of capital from operating to debt by up to $20.5 million and a reduction of the end of the year 2019-20 surplus and a reduction in reserve increases by up to $21 million.
“The sheet that was sent around by finance showed that (municipal) reserves would increase by at least $12 million,” Mason said. “Given the financial situation that we are in and the cuts that we are looking at, I have to say that I question whether now is the time to be putting even more money into the rainy-day fund when it looks like we’re already in a rainy day.
“We were told yesterday that the end-of-the-year surplus could be as much as $36 million. That’s another potential funding source. I feel that now is the time to take on more debt for capital, that’s another $20.5 million. We can finance that over a much longer period of time than the line of credit.”
The line of credit Mason refers to is $188 million available to HRM from the province in a loan program for municipalities at a 1.1 per cent interest rate repayable over a threeyear period. The $188 million is the amount that HRM estimates will not be received in commercial and residential taxes because of non-payment.
Fraser said she will return to council with a loan amount sometime in June after it is calculated how much money will be required to offset the municipality’s operating expenses of $100 million per month.
In response to Mason’s motion, Dube said the municipality definitely has a cash-flow problem.
“After October, we may be in a situation that we have to borrow more money,” Dube said, referring to the due date for the second of two property tax payments. “Our advice is certainly not to reduce the payment on the short-term debt this year because you will be setting yourself up for failure in the future.”
Coun. Matt Whitman (Hammonds Plains-st. Margarets) said Mason’s motion seemed like a backward step.
“Almost all of the cuts were necessary,” Whitman said. “The hiring freeze is necessary, the vacancy management work is necessary. To slow down for a staff report when we want to have this done by June 1, I’m afraid it’s going to set us back.”
Dube had said that he hoped to bring the final recast budget back to council on May 26.
Dartmouth councillors Sam Austin and Tony Mancini both said Mason’s motion was simply a way to explore options to the budget cuts that had been presented Tuesday.
Mason finished the debate by saying his motion would not undo any of the layoffs already announced and that he was suggesting a “different approach to handling this risk.” The motion passed by a 14-2 vote.
Budget talks then shifted gears into hearing from the directors of the business units. Brad Anguish told council that transportation and public works had chopped $7.1 million in operating costs and found another $42 million in capital reductions while maintaining core and essential services.
The capital reductions include work on the Cogswell project, road operation, street recapping, deferred maintenance and construction costs. Summer and winter seasonal staff and student hires were cut.
Anguish said parking fees, fines and permit charges would be restored in June or early July.
Part of the transportation and public works cuts was a $1.1-million saving forecast by changing weekly summer green bin collection, initiated in 2005, to once every two weeks. That change required a council motion that was introduced by Coun. Paul Russell of Lower Sackville. The motion passed 13-2 and transportation and public works said an information program would be developed to help residents deal with the odour that emanates from the green bin, the primary reason for the change to weekly in the first place.
Council also voted to move TPW’S $600,000 snow clearance program for seniors, initially tabbed to be cut, back for consideration in final budget deliberations.
Council will continue budget discussions Friday.