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Halifax Regional Municipality will draw more than three million dollars from the Halifax Convention Centre reserve to cover the balance of property taxes owed to the province.

Jane Fraser, chief financial officer for Halifax Regional Municipality, explained at a council meeting Tuesday that property taxes for the convention centre, which opened in late December of 2017 as part of the half-billion-dollar Nova Centre project, are guided by two budget principles.

“The developer pays the whole amount of property tax for assessment on the development,” Fraser said. “Nova Centre is taxed and that payment comes to HRM.”

Fraser said HRM and the province have a memorandum of understanding on how much tax they are going to cost share.

“It’s a formula that’s based on a square-footage value, $362 a square foot, at the estimated time of completion of the convention centre.”

Fraser said the convention centre area is 296,000 square feet.

“When the Halifax Convention Centre does their financial statement ... the amount of taxes that they pay is based on the memorandum of understanding with the province.”

Fraser said the municipality is reimbursing the province for what could be called an overpayment that the province sends to the developer.

“It’s quite complicated. Some of the challenge is that this was the first year that the convention centre was operational and we had to come up with the process to true up, if you will, what the cost-sharing is.”

A staff background report said that property taxes for the convention centre were greater than expected.

The convention centre reserve is used to fund payments related to the centre, including lease payments and the municipality’s share of the operating expenses submitted to Events East, the government agency that manages and operates the convention centre, Scotiabank Centre and Ticket Atlantic.

The surplus statement accepted by council Tuesday shows a general rate surplus for the municipality for 2018-19 of $26.1 million. Provincial regulations stipulate that municipal surpluses must be placed in reserves. HRM transferred more than $17 million of its $26.1-million surplus into a general contingency reserve that can be used to fund operating costs, offset deficits or fund new operating initiatives.

The municipality put $6 million of surplus funds into a capital fund reserve, $2 million into a parkland development reserve to purchase and improve parks and $700,000 into a municipal elections reserve.

Council also approved Monday a $238,000 withdrawal from the general contingency fund to cover the cost of sideguards for municipal solid waste trucks.

Before the surplus vote, Carrie Cussons, president of Events East, presented a report outlining 270 combined events at Scotiabank Place and the convention centre in the past year. That translated into 530,000 guests, including 100,000 at the convention centre, and almost $100 million in new money for the Nova Scotia economy, Cussons said.

“We connect Halifax and Nova Scotia to the world through the events we host,” Cussons said. “National and international events, in particular, brought economic impact with visitors who stay in our hotels, shop in our local stores and eat in our restaurants and who often stay additional days and further visit and explore our city and our amazing province.”