Port Hawkesbury rings up $2.9M surplus in mid-year update

A Cape Breton town that drained its municipal reserves to balance its budget only a decade ago is now flirting with a nearly $3-million surplus. 

Higher-than-expected tax revenue and under-budget municipal spending have combined to result in $2,881,423 in black ink for Port Hawkesbury as of Oct. 31, 2024. That's nearly a million dollars above the surplus of $1,927,851 projected in the town's 2024-25 municipal budget. 

The figures came in a seven-month review of Port Hawkesbury's books that the town's director of finance, Erin MacEachen, delivered to Tuesday night's council meeting at the Port Hawkesbury Civic Centre. 

The surplus was welcome news for a town council that has occasionally had to dip into its municipal reserves to keep its tax rates low and avoid running a deficit. In 2022, Port Hawkesbury required $146,000 in reserve funds to balance its books. Eight years earlier, the town nearly emptied its municipal and capital reserves to stabilize its balance sheet. 

'We're a town on the move': mayor

Among the trends contributing to a healthier bottom line are a rise in Port Hawkesbury's overall tax revenue as well as increased use of the town's recreational property rentals, inside and outside of the civic centre. As a result, the municipality finished October with $7,564,413 in overall revenue, up from the $7,088,321 projected in last year's budget. 

The figures drew an optimistic response from Port Hawkesbury Mayor Brenda Chisholm-Beaton, who says the financial update proves the town is headed in the right direction.

"We're a town on the move," the mayor told reporters following Tuesday's council session.

"We're growing, there's certainly movement on the housing file, there's new businesses opening in the town. So there's definitely no surprise in terms of the increase in the assessment on both the business and [residential] tax side of things."

Questioned about potential uses for any surplus funds, Chisholm-Beaton suggested that "there's no shortage of plans" but the decision would ultimately be a joint effort of council and town staff.

"We would meet somewhere in the middle in terms of where we want things to go for the town," Chisholm-Beaton added. "I think we would probably start with understanding what are the options to invest those savings? Is it putting it towards a bigger project or a capital project? Is it adding services?"

Director of finance advises caution

While the figures delivered in MacEachen's report suggest higher revenues and lower spending, the director of finance is cautioning Port Hawkesbury's elected officials and residents to proceed with caution. 

"Things are not looking negative right now, which is a pretty good position to be in," MacEachen told reporters following the council meeting. 

"But I wouldn't get too excited just yet. These are Oct. 31 figures, and we have a long winter ahead of us."

As an example, she pointed to the town's engineering and public works department, which has come in $75,000 under budget as of the end of October. MacEachen noted that heavy snowstorms similar to those that buffeted Cape Breton this past February can wreak havoc on a municipality's snow-clearing and road-salting budgets. 

"We always say, at this time of year, that the next three months are when we'll see significant expenditure on the public works side, particularly around snow and salt," MacEachen said.

"But we do have a reserve account that we've set up in our operating reserve to help manage those over-expenditures, so we can budget more specifically over the year, not just for a worst-case scenario."