Financial drivers & assumptions
There are three drivers of HRM’s costs:
1) Growth of HRM
Each year the population of HRM grows, and the number of households that use HRM services grows even more. In the last 5 years, HRM’s population has increased 3.1 per cent. In the same period, the number of dwellings in HRM has increased 7.4 per cent. That equals 12,100 more homes that HRM provides services to – maintaining a municipal road, garbage pick-up and police service, to name a few.
2) Costs of Services
The costs to HRM to deliver services change as the costs to buy goods and services change. Fuel, asphalt, garbage collection, books, salt, office supplies, and other purchased services experience different price changes each year.
Halifax Regional Council is working to improve its long-term financial position by actively reducing debt in setting aside money in reserves and complying with the Multi-Year Financial Strategy.
3) Expansion of Services
When services are expanded, e.g. additional police on the street or a MetroLink bus service is created, there are new costs to HRM. These are the increases that are perhaps most obvious.
Some key assumptions in the 2009/2010 Fiscal Framework
Inflation (CPI)*: 2.8%
Inflation (Municipal)*: 3.2%
Population Growth: 0.7%
Household growth: 3.2 %
Canadian Dollar: US$ 0.80
HRM GDP: n/a
Oil per Barrel (US$): $70.00
Diesel Fuel: 96.2¢ **
Gasoline Fuel: 88.0¢**
Heating Fuel: 79.3¢**
Debenture Rate (borrowing) 5.00%
Short-Term Interest Rate: 1.03%
*The Consumer Price Index (CPI) is expected to rise by 2.8 per cent. The CPI does not include the goods and services typically purchased in large volumes by municipalities such as fuel, electricity, road salt and concrete. Inflation for HRM, based on its typical purchases, is estimated to rise by 4.0 per cent.
**Under HRM price contract, therefore not as vulnerable to price changes through the year.
Property Tax
In the 2008-2009 fiscal year, HRM’s residential general property tax rates increased 2.2 to 2.5 cents (per $100 in assessment) from the prior year.
Commercial tax rates were adjusted for the phase-out of the Business Occupancy Tax - in the urban/suburban area, the commercial general rate was up 3.3 cents
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