Halifax Regional Municipality is growing and its debt level is expected to grow accordingly over the next three years.
“An increased growth in the municipality is putting pressure on existing services,” Jacques Dube, chief administrative officer of the municipality, told regional council Tuesday in introducing the 2021-22 capital plan and budget recommendations.
“We welcome growth but that welcome growth comes with a cost,” Dube said. He said the population of HRM has increased by roughly 7,500 per year since 2015, a six per cent increase. The municipality is projecting population growth of 5,000 people per year from 2020 to 2022, an additional three per cent growth.
“Our continued success in population growth is putting downstream pressure on municipal services capacity,” Dube said.
He said the envelope for fiscal targets is “not sufficient” to meet new targets and advance specific projects.
The answer Dube suggests is an alternative funding initiative that will increase the municipal debt by $22 million over the next three years. That means that the total municipal debt, instead of declining by $13.2 million over the next three years, will instead rise and create an increase of $35.2 million over existing debt targets.
The total capital plan is projected to cost $174,735,000 in 2020-21 and $217,424,000 the next fiscal year. The 2022-23 projection is for a $222,174,000 cost for an overall three-year capital plan cost of $614,333,000.
The biggest cost is for roads, active transportation, and bridges, which comes in at $63,631,000 for 2020-21 and $235,821,000 for the three years combined. Buildings and facilities make up the next highest budgeted capital item at $160,440,000 for the three years and vehicles, vessels and equipment checks in at $112,339,000 on the three-year summary.
Dube says the projected three-year capital allocations align with council’s priorities by directing 25 per cent of capital spending toward growth and 75 per cent toward renewal.
“It’s safe to say that the nature of public service is that there will always be unlimited requests of limited capital funds,” Dube said. “There are lots of demands out there and there is never a shortage of great ideas. There is a responsibility, however, to determine the greatest value for the taxpayer, which is finding a balance between priorities and the taxpayers’ willingness to pay.”
Dube said the projected capital budget balances council’s top priorities of transportation services and liveable communities.
Coun. Lisa Blackburn, who represents Middle and Upper Sackville and Beaver Bank and who was acclaimed as deputy mayor at Tuesday’s regular council meeting, asked how much had been paid down on the debt in the last five years.
Jane Fraser, chief financial officer for the municipality, said the overall debt was $256.3 million in 2015-16, a number that was projected to fall by $25 million by 2020-21.
Coun. Paul Russell (Lower Sackville) said paying down $25 million on the debt over five years and then adding $22 million is simply maintaining the debt level.
“I would like to see us get out of debt,” he said.
Mayor Mike Savage lauded Dube for his efforts but warned that debt should never be used to fund operating costs and should only be used to fund specific projects. The mayor mentioned the existential threat of the climate crisis and the money that will be required for that fight.
Fraser said the intention of increasing debt is to finance assets with a very long life span.
The increased debt is expected to mean a $3 hike on the average tax bill in 2021-22, $12 in 2022-23 and $17 in 2023-24 for an overall three-year average tax bill hike of $32.
Several councillors had infrastructure asks that they would like to add to the capital budget. Dube said the plan was brought to council for its recommendation only and discussion about the plan is expected to continue as the overall budget is hammered out over the next several months.