Budget 2023-2024 Begins
Council had its first session on the 2023/2024 budget last week. To create the budget takes a while because Council examines spending in every department. From that examination, we build a list of potential budget adjustments. The adjustment list is debated once all the department presentations are done in late March. Council’s decision on each proposed measure produces the final budget. All of that work typically takes 4-5 months, allowing the budget to be finalized in early April.
To get things rolling, the first step is to give staff a starting number for the tax bill so that they can finalize a draft for Council to work with. The tax bill isn’t the tax rate, the tax bill is the total tax revenue that HRM collects, which means it captures the combined impact of the tax rate and property assessments. Since assessments have increased significantly over the last number of years, the actual tax rate has almost always gone down. Most of the time, HRM’s tax bill increase has been well below the rate of inflation, meaning that HRM has been squeezing its operations.
Unfortunately, 2023/2024 is shaping up to be a very challenging year, with staff recommending an increase in the tax bill of 8%. A few things have occurred to drive that recommendation:
- HRM is facing the same inflationary pressure that everyone is. The cost of everything, particularly fuel, is way up. In trying to hold the tax bill down last year, Council didn’t budget for risk around fuel costs, which is a real problem given that fuel is now more than twice the original projected price.
- Rising interest rates have cooled the housing market and deed transfer tax revenue is decreasing. Deed transfer revenue has steadily grown over the last several years and is a big part of how HRM lessened past increases in the tax bill. That yearly windfall is now gone.
- Keeping taxes low means that HRM stacks up very well compared to other Canadian cities in terms of the cost to residents and businesses, but it also means that revenue that could have helped mitigate this year’s challenges isn’t available. When HRM took less than inflationary increases in years past (as we did routinely), we gave folks a break, but we also squeezed HRM’s operations and created the conditions for this year’s dilemma.
- Last year Council opted to use $7 million of surplus funds to balance the budget, which puts us $7 million behind because that was one-time money. Council has had many arguments about using surplus funds like this before. It has been something I have opposed, (sometimes successfully sometimes not) because it isn’t sustainable. One-time funding should go to pay for one-time projects, not ongoing operations.
- Inflation and declining revenue means HRM is projecting a deficit in 2022/2023, which will have to be made up. That deficit would be in addition to the hole created from using surplus funds last year. The announcement last week of federal cash for municipalities to help offset COVID losses to transit systems might help us avoid finishing 2022/2023 in the red.
We could likely manage any one of these issues without a significant spike in the tax bill, but when you put them all together, it puts the municipality in a real bind. As it turned out, Council couldn’t stomach a theoretical 8%. The motion was amended to 4%. I voted against using 4% as a starting place because I think Council is either deluding itself, or is charting a course for either fiscal recklessness or austerity.
We don’t have all the details yet, but it’s important to note that staff’s recommended 8% scenario already proposed scrapping the planned expansion in the sidewalk program ($7 million), delaying the next phase of Transit’s Moving Forward Together Plan ($2.9 million), plus a host of other department cuts ($6.9 million) for total reductions of around $17 million. By setting the direction at 4%, Council is now asking staff to go find an additional $25 million!
Cutting municipal services isn’t easy. Reduced rec centre or library hours, scaled back road maintenance, fewer police/firefighters, longer development timelines by axing planners, reduced waste pick-up, reduced transit service? There really isn’t anything that HRM does that someone won’t feel if it’s cut, and a budget that has been squeezed by $42 million is going to have some difficult cuts.
In the past, Council has generally reversed proposed cuts that would impact services (biweekly summer green bins being the prime example), which is why I think there is a good chance we’re not really serious about slashing $42 million. The deluding ourselves scenario is that once Council looks at the proposed cuts that are needed to get the bill down to 4%, we’ll balk, and add a lot of stuff back into the budget, bringing us back to where we started around 6%-8%. If Council isn’t kidding itself and is serious, then $42 million in cuts has the makings of an austerity budget. It will be really hard to slash that much without impacting core services.
The only other option would be to kick the can down the road and pay for reducing the tax bill this year through one-time funding. Staff did identify how that could be done, but they rightly don’t recommend it because the result is at least an 8.5% increase in 2024/2025, possibly more! One-time funding delays the reckoning for one more year, but it doesn’t solve the underlying problem. Recall that using one-time surplus funds last year is part of why we’re in a bind this year. Being fiscally conservative isn’t just about keeping spending and taxes low, it’s fundamentally about making sure what’s going out matches what’s coming in in a sustainable way. Using one-time funding for operations isn’t sustainable, it’s reckless.
I have no interest in delusion, austerity, or recklessness so I voted against 4%. I could have supported 6% as I think we could stretch to get close to that, but I really don’t see 4% being viable so I couldn’t vote for it.
Staff did indicate that if Council wants 4%, it would be helpful to have some direction as to where to close the gap. While I’m not on board with the path my colleagues have set, I still felt it was worth trying to direct the potential cuts to less damaging areas so I proposed not increasing the road recapitalization budget this year. Due to worsening pavement condition, and increasing costs due to inflation and complexity, HRM’s road budget isn’t stretching as far as it once did. At the same time, HRM’s inventory of streets continues to grow. As a result, staff identified the need to increase the paving budget this year by $8 million in additional funding. Staff’s original 8% proposal already put off planned growth in the sidewalk and transit budgets, and since Council accepted my motion on paving, it’s looking like cancelled program expansion will apply to everything in transportation.
We’ll see what else might be on the chopping block over the next few months as we start to get the full details of what the real trade-offs for lower taxes are during the department presentations. First up on December 13 will be the capital budget where Council will get a look at all the capital projects that have been cancelled or delayed. Stay tuned.
Broad Street Roundabout
Bedford is getting a new roundabout at the intersection of Broad Street and Larry Uteck Boulevard. The original roundabout proposal would have closed Larry Uteck at Broad Street during construction, but folks in the area were concerned about the traffic disruption that would result and so Council asked for options. As it turns out, keeping the street open during construction will cost an additional $261,000. On the question of how much short-term inconvenience will Council trade to save money the answer is apparently not much. Only Councillor Cleary and I voted to close the road. It underlines my point in budget deliberations that it’s easy to speak about saving money when it’s theoretical, it’s much harder to actually ask people to make specific sacrifices.
Student Transit Pass Pilot
Last year, high school students at Dartmouth High, Woodlawn High, Ecole secondarie du Sommet, and Ecole secondarie Mosaique were given transit passes. The idea is to encourage life-long transit ridership: it’s hard to convince someone to try transit as an adult if they’ve had no real formulative experience using the system. HRM and HRCE staff were happy with the results of the pilot and this year it will expand to include the new grade 10s at all four high schools, plus kids at the feeder junior high schools (Bicentennial, Dartmouth South Academy, John Martin, Caledonia, Ellenvale, and Eric Graves). This expanded pilot will run for nine months starting in January 2023. HRM and HRCE will use the time to further look at the options for expanding this program beyond the pilot locations and what that would mean for HRCE busing. HRCE is making a contribution to the program of $200,000 and the expectation is that HRCE would contribute towards a larger HRM wide program.
Macdonald Bridge Flyover and Active Transportation
Council increased the design contract for the Macdonald Bridge Bikeway by $113,000. While the design contract increase isn’t huge, the included revised estimates for the overall project raised some eyebrows. The Bridge project has grown from an estimated $8,500,000 to $12,700,000. Since this project has cost sharing with the feds and province, HRM’s share (17%) would be $2,200,000. As part of the work to continue advancing the project, HRM will undertake a value engineering assessment over the next few months to help decide if the project’s growing costs are worth it and if there is anything that could be done to reduce the total. There are three things to keep in mind:
- The Macdonald Bridge is probably the single most important point in the whole potential cycling network. If we’re going to spend some significant dollars on cycling infrastructure, this is very clearly the best spot to do that
- The Macdonald Bridge bikeway is more than a bike project, it includes intersection work at North and Gottingen and new transit infrastructure. The bridge is a big part of the budget, but it’s not the only piece
- It’s likely possible to get cyclists up North Street without the flyover, but doing so would mean forcing vehicles, including buses, coming over the bridge to periodically wait for cyclists to cross. The flyover is the option that eliminates potential points of conflict and minimizes delays for transit and cars. It’s the best solution for all modes. It’s not just a bike project.
I will wait to see what comes back on the Flyover. I’m not necessarily committed to the Flyover as the only possible solution, but any alternative will have to also achieve the objective of allowing cyclists to continue up North Street without having to go all the way down to Barrington.
Staff also gave Council an update on the general progress on the minimum bike network promised in the Integrated Mobility Plan. Spoiler, it’s behind schedule. The original vision was that the minimum grid would be completed in 2022. Staff are now forecasting that it won’t be finished until 2028, although most of the key pieces will be in place by 2026. Below is where things sit as of 2022.
In Dartmouth, with Wyse Road and Dahlia Street complete, we’re starting to have some major pieces of the network joined together. There is still a lot of work to do as completed kilometres isn’t even halfway. Below is what the completed network will look like in 2028.
It’s disappointing how work on this project has slipped. There are some good reasons why HRM is behind on these and other construction projects. Pieces like the Cogswell and the Harbour Trail to Banook connection along the Sawmill River are tied up in much bigger projects. The pandemic didn’t help, driving up prices and slowing projects with labour and supply issues (Wyse Road signal lights being a clear example). Some of it though is not enough staff were dedicated to getting things done, especially in the earlier years. The staff we have are awesome and are very dedicated to the work, there just weren’t enough of them to deliver on this big a project in the time available. That’s on HRM and Council.
Some of us had suspicions that things weren’t entirely right. We asked about staffing and delivery every year during budget deliberations and every year we were assured that there was a plan and implementation would pick up. We should have committed more people to the project earlier and we should have considered temporary tactical implementation. I wish I had pushed even harder on this. There will be a special Transportation Standing Committee in December to go over the minimum grid update. This feels like a project that HRM’s Auditor General should look into as well.
I requested a staff report into amending the Regional Plan and/or the Centre Plan to allow for a relaxation of development restrictions in the watercourse buffer zone at Paddlers Cove (118 Prince Albert Road) by Lake Banook. HRM requires a watercourse setback of 20 metres for any waterbody except Halifax Harbour. That makes sense as disturbing the shoreline can be quite damaging to the aquatic environment. So what makes 118 Prince Albert Road worthy of special consideration? A few things.
- The shoreline at 118 Prince Albert Road was destroyed in the past back when rules weren’t as rigorous and already consists of infilled rock and grass. The environmental benefits of a watercourse setback are minimal at this location.
- Lake Banook is a special spot. It’s not just a lake like any other, it’s a recreational hub and international paddling venue. Allowing for the development of a boardwalk at 118 Prince Albert Road would complement the Lake’s special role. I can’t think of any other spot in HRM where a boardwalk on a lake would be a good idea!
- There has been some friction between the owners of Paddlers Cove and the general public around access to this area. It looks like a public park and people like to use it as if it were, but it’s not. Allowing for a boardwalk development could enhance public access.
The property owners are interested and already have an interested tenant. It’s not hard to imagine a space with food, drink, seating, maybe some bike or paddleboard rentals, with a great view down the lake and that might even include some shoreline restoration as part of redevelopment. It could be a lovely anchor for Banook and Grahams Grove and is worth considering.
- Revised the administrative order on community gardens
- Reviewed the HalifACT annual progress report and asked staff for a formal presentation alongside budget deliberations in the New Year
- Considered the annual Road Safety Plan report
- Received a report from the Lived Experience Committee, which will inform future policy recommendations around homelessness
- Reviewed the annual workforce report
- Passed new procurement policies
- Approved a sobering centre pilot as an alternative to the traditional policing/drunk tank approach to public intoxication
- Scheduled a public hearing for changes to the land-use bylaw in Hammonds Plains
- Once again wrote the Province requesting the authority to set speed limits of less than 50 km/hr without the need for special Provincial approval
- Finalized councillor appointments to Halifax Water and the Grants Committee
- Awarded contract for oil/gasoline
- Increased the budget for soil testing on the Halifax Common
- Registered 1102 Purcells Cove Road as a heritage property
- Finalized changes to the User Fee Bylaw to prepare for the upcoming launch of a transit fare app