In part four of my budget series, I continue to go through the steps Council and staff go through to arrive at the final HRM budget. In the next stage, we get the draft budget, and hear from each of the business units across the municipality.
Council resumes the budget in November. But that’s after months of work by the staff in each of the municipal business units to respond to the direction given by Council and incorporate that direction into the reporting that makes up the draft budget book. Staff then come back with a two draft budget books – one for each of operations and capital. The budget book presents most of the salient details, which are then supplemented by per-business unit reports that dive into some specifics, including Service Enhancements or Reductions (SERs) – code for increases or decreases brought by something the business unit is seeking to do. Some decreases are automatic, while others are brought to Council as “options” with some commentary from staff on what the impacts might be. Increases are effectively never automatic necessarily, but some do get “baked in” with the budget as presented. Any enhancements or reductions, at the direction of council, are presented with important contextual information like what is the impact on the tax rate, are there procedural or legislative impacts, does it require full time employees to see it realized (with longer term financial impacts therein), along with any other supporting information that would help a decision be made.
Starts to get kind of complicated, right?
We’re given about a week to read through what’s going to be presented (we get it a little in advance of the public but not by much) and we can reach out to staff leaders with questions as desired in advance of the budget meetings so as not to put staff members on the spot. If your question is pretty straight forward, it might not be needed, but if your question is a little into the weeds, it does help for them to know it’s coming.
What came before council in the draft budget – within the defined parameters laid out by Council’s direction at the beginning of the budget cycle, informed by the staff report of June 10th, was a projected municipal tax increase of 10.5% over the prior year. Important to keep in mind that this is explicitly with the conditions of that original direction already at play – the first being perhaps the most direct:
Hold the expenditure levels flat for the 2026/2027 budget with consideration for an increase for inflation based on CPI, contractual commitments, mandatory provincial contributions, and items already approved by Council in the 2025/2026 budget
In other words, if we hold expenses exactly where they were in 2025/26 and adjust only for inflation, contract renewals (including staffing contracts with unionized employees), mandatory provincial rate and items Council had previously approved that we knew up front would have operational cost implications, we should be comparing apples to apples. And it was meant to be a relatively bare bones comparison because other elements of the motion coming out of the staff report aimed to find efficiencies and costs savings throughout the organization to try to offset cost pressures. The result was an estimated 90 million dollar year over year gap between costs and revenue that the tax rate would have to make up – it’s required to be made up. Provincial legislation prevents the municipality from borrowing for operational costs. That’s where the calculated 10.5% increase came from.
The business units then come before council in groups to present information and respond to questions. The groupings better define who’s up in what order and this structure helps keep everyone – staff, council, the clerks and the public – organized and on topic.
What’s interesting to note here is that for the purposes of budget, Council is no longer Council. The same set of people become the Budget Committee. Most of the same rules apply, except for four big ones:
- First, the Mayor doesn’t lead the meetings. That responsibility is bestowed upon the Chairperson of the Audit and Finance Standing Committee (for the past two years, this has been the exceptionally capable and fair Councillor Cathy Deagle Gammon of District 1).
- Second, Budget Committee meetings use “committee of the whole” rules. In simple terms, instead of just two turns at the microphone, still respecting our usual ordering based on when you rung in and how many times you’ve already spoken, a committee member can get as many times as they want. It makes for much longer meetings, but much more robust discussions leaving no stone unturned.
- Third, budget meetings have public participation as the first item on the agenda (effectively) and the meeting and debate doesn’t take place until all public participation has concluded – we hear from residents before we start on any discussion. And per the June 10th staff report, the schedule was adjusted to provide even more opportunities for public participation earlier in the process.
- And finally, budget meetings last as long as needed – over multiple days (but public participation still only happens the once in a “single” meeting even if over multiple days) until the group of business units applied to a given meeting are wrapped up. Because the business units are divided into several groups, that means there are several budget meetings, which means public participation within each.
So what happens next? Each business unit presents their budget and answers questions. We go one business unit at a time to keep things a bit more organized and so that the right people are in the room or available to come to the Council Chamber to respond based on the subject matter at hand. The “options” presented by a business unit – like hiring more firefighters to provide better public safety but at a cost to the taxpayer, or cutting a subcontracted service or providing it internally to save the taxpayer money) can be “moved” one of two ways just like a regular motion of council. If it’s a pretty straight forward ask, and the feeling we get around the room is that it’s well supported, we can move for it to be included in the main motion of the budget – baking it into the budget itself. If it seems like support may be iffy and/or more information is likely needed in the form of a staff briefing note to lay out more detail of the case for or against something, we can “move” it to the Budget Adjustment List (the BAL) – effectively parking it for more discussion in the next round of the budget discussions rather than spend extra time on it now, especially without the added information.
By the end of this process, we often get an updated estimate of the overall budget. And it will commonly be framed as a best case and worst case scenario. What happens if all the cuts and none of the enhancements are approved? And on the flip side what if none of the cuts are approved and all of the enhancements are? It gives us an effective minimum and maximum based on the discussions thus far, but it’s a bit like trying to evaluate how delicious a cake will be based on the ingredients you put into it but before you put it in the oven. There’s a lot left to do before that will be decided.
Worth noting here is that we are not limited to debate only items specifically raised by staff as options in response to prior motion(s). At any time, we can bring forward motions to request other ideas. If we feel like we’ve got strong options on the table to shape a budget we believe is a fair representation of what we and residents can support, we could go through our exhaustive list of BAL items and see where we land in the end. But if it feels like we’re missing something, we can – and did – ask for more. With a few meetings to go, Councillor Clearly brought forward a motion asking for staff to complete a staff report to be completed in time for our BAL deliberations that sought a flat tax rate (no increase to the tax percentage applied to your home’s assessment, but your assessment itself could still increase your tax bill), even if it meant cuts to service.
While it became clear service cuts are about the only way to get there, just what that would look like was something staff would have to determine. Some of the options were technically already on the table in the form of BAL option items previously presented, so they might be in the mix again, even if they hadn’t been moved to the BAL during prior debate. Councillor Cleary’s motion passed and so staff would complete another review and return with more options with the potential to achieve a flat tax rate.
An 11th hour motion with huge implications
As we were nearing the end of the last meeting and presentations from staff, most items previously presented as options by staff that we considered worth moving to the BAL debate had already been moved. It was then that the Mayor brought forward another motion of his own that was similar but broader in scope than the earlier one by Councillor Cleary. The Mayor’s motion provided quite a bit more specific direction, such as a hiring freeze and an escalating percentage cut in municipal staff (outside of emergency services). This was done with just days before the BAL debate was to occur.
It’s not at all that I feel a look at the size of our municipal staff isn’t warranted – in fact I agree it’s a worthwhile endeavour. It’s how we go about it that I feel strongly about. To consider scaling back or realigning the size of our municipal team with the core services of the municipality in a way that benefits residents, I think a comprehensive needs analysis would itself identify what scaling would be most effective and deliver the best value for residents. A scalpel would be needed rather than a buzz saw. And so that was my feedback during the debate of the motion. Many other councillors voiced similar reservations about the potential negative impacts a broad, comparatively undirected cut without thoughtful consideration would entail. We risk doing more damage than good. And we were giving staff little more than a week to come back with exceptionally consequential recommendations on top of everything else with which they were already tasked. The value of what could come back in that little time was in question. For that reason, I didn’t support the motion and it was defeated, but the Mayor promised to revisit the topic at Regional Council.
It’s also important to note that the motion also potentially duplicated or conflicted with some efforts already underway as well as raised some practical considerations. Not only did Councillor Cleary’s motion give staff license to at least consider cuts, freezes or natural attrition to bring staffing costs down without specifying that it MUST be done, Regional Council had already in the fall authorized a comprehensive service review to be performed by an outside contractor to help identify efficiencies and savings projected to lower costs by millions of dollars. We are also in the middle of an executive search for a new Chief Administrative Officer for the municipality. We might anticipate that an incoming CAO, especially if they come from outside the organization, will seek to conduct their own top-down analysis of how the municipality operates and seek to effect some changes of their own (with support from Council). This too could bring staffing considerations under review after the new CAO is hired.
All this is to provide some clarity about the volume and depth of the discussions we had at Budget Committee thanks to herculean efforts from staff to daylight as may viable pathways for the committee to consider to make a difference to the affordability of the tax rate, the affordability of HRM living, and the good we can deliver to residents – all three inter-related and certainly not mutually exclusive. The Budget Committee had considerable work to do during the BAL debate – and almost immediately additional dates were added to our calendars, and every meeting extended by several hours, in anticipation of long and comprehensive discussions.
If direction is the pre-season, and the budget presentations and debates are the regular season, the BAL deliberations are the playoffs. That’s what we’ll take a look in part 5.