Financial update looks grim: city facing shortfall of $13.9 million

Mayor Peter Kelly says everything is on the table when it comes to dealing with a funding gap next year of close to $14 million.

Council will receive a financial update tomorrow saying HRM has hit the wall and it’s time to cut services or increase taxes.

The shortfall of $13.9 million is a small percentage of an annual budget of $880 million, but HRM is legally required to balance its books.

The report coming to council tomorrow suggests that may be a challenge next year.

Staff says revenue is $14 million than expenses and Kelly says efficiencies may be the way to go.

“Then you have to see what we do and how we can do it better in terms of reducing the cost of providing the services that we do, in terms of more and greater efficiencies, or at a reduced cost,” he said.

Some councillors are also complaining about the amount of money paid to consultants – $415,000 so far this year – and Kelly says those and controversial pay raises will also come under scrutiny.

“We already gave back the raise for this year and if we need to look next year at doing those things as well, then we need to look at everything,” he said. “We need to look under every detail and see how we can make ourselves more cost effective and cost efficient.”

Council made some cuts this year to address a $35.5 million shortfall, but later changed course on some fee hikes and eliminating some bus service.

The report shows the financial picture looking even worse in 2012-13, with a projected shortfall of more than $15 million.