Nova Scotia’s minister of municipal affairs is elevating a crimson flag over some points of Cape Breton Regional Municipality’s funds, however CBRM officers say issues are usually not as unhealthy because the province is making them appear.
In a letter to the mayor final month, Municipal Affairs Minister John Lohr says six of 12 monetary indicators for fiscal yr 2020-21 in CBRM are within the medium or high-risk class and he’s “significantly alarmed” at three of them.
The minister demanded the municipality present an motion plan inside 90 days to handle the gadgets, or face shedding out on numerous provincial grants.
In an interview, Mayor Amanda McDougall mentioned the province’s view of the monetary indicators is unfair, as a result of a few of the considerations are longstanding points that may simply be defined, whereas others have been one-off issues attributable to the COVID-19 pandemic.
For instance, the minister’s concern over uncollected taxes was a direct results of the virus’s affect on the financial system, she mentioned.
“The municipality was very, very lenient and eager to make it possible for folks did not have to fret about taxes and going onto tax sale lists due to the immense stress of COVID,” McDougall mentioned. “Folks had misplaced work, companies have been struggling and that was all a part of COVID form of survival mode.”
That’s “irritating,” the mayor mentioned, as a result of the municipality was inspired to take a lenient stand by the province.
The minister additionally expressed concern in regards to the low ranges of CBRM’s reserve accounts, which McDougall mentioned has been a longstanding concern associated to underfunding.
“We’re a municipality that for the primary time in 40 years is rising,” she mentioned.
“We’re a municipality that began with important debt post-amalgamation.”
That debt grew to $160 million, however is now again down round $70 million.
One other concern was reliance on authorities transfers, which was additionally an unfair concern in 2020-21, McDougall mentioned, as a result of the Progressive Conservative authorities got here into energy and doubled CBRM’s capability grant on a one-time foundation with a promise of renegotiating the funding formulation with municipalities after that.
“We acquired a top-up of $15 million the yr earlier than after which didn’t obtain a top-up this yr and so it reveals that we’re at a deficit on authorities funding,” she mentioned.
‘It’s a bit irritating’
The province nonetheless hasn’t negotiated a brand new deal for municipalities, however it’s within the works, the mayor mentioned.
“It’s a bit irritating, I will not lie, attempting to plan and price range,” McDougall mentioned.
“We’re getting into into price range season and never having that formulation in hand, however I feel that’s indicative of how arduous individuals are working to make it possible for that formulation goes to be finished proper.”
A lot of the monetary indicators cited as considerations by the province really confirmed enhancements in 2020-21 over the earlier yr.
One which obtained worse was the municipality’s debt service stage, however McDougall mentioned CBRM’s use of short-term borrowing is finished for accounting functions and has not been an issue in earlier years.
She is hopeful a deal will probably be introduced quickly and it’ll imply more cash for CBRM.
“I do not suppose there’s an choice to not give extra,” she mentioned.
Yearly, the province produces a report on 12 monetary indicators for every municipality, protecting things like reliance on authorities funding, uncollected taxes, reserve accounts and debt and taxation ranges.
5 municipalities despatched letters
It robotically sends a warning letter to communities with six or extra indicators at medium or excessive threat.
This yr, warning letters have been despatched to 5 municipalities: CBRM and the cities of Clark’s Harbour, Middleton, Oxford and Trenton.
On Thursday, Lohr informed reporters the monetary indicators are utilized uniformly throughout all municipalities and whereas there have been some constructive numbers in CBRM, akin to the expansion within the tax base, the municipality’s uncollected taxes that yr have been double the provincial common.
“”That is a significant concern for us, particularly for an enormous municipality like that,” Lohr mentioned.
CBRM’s uncollected taxes have been 13.8 per cent of $96 million, totalling roughly $13.25 million.
The minister additionally mentioned the province supplied a short lived mortgage program to take note of the unsure financial system, however nonetheless anticipated municipalities to gather taxes.
“There was cash superior in anticipation of perhaps having folks have issue gathering taxes, so we did provide that to each municipality, that there could be ‘Hey, we all know you’ll have bother throughout COVID, so we’ll advance you some cash,’ which they did benefit from. However there was by no means something about not gathering taxes.”
CBRM chief administrative officer Marie Walsh mentioned the approaching yr’s price range remains to be within the works, however it’s anticipated to incorporate the hiring of a further tax collector.