Province raises alarm over a few of CBRM’s monetary practices

Province raises alarm over a few of CBRM’s monetary practices

Nova Scotia’s minister of municipal affairs is elevating a purple flag over some elements of Cape Breton Regional Municipality’s funds, however CBRM officers say issues are usually not as dangerous 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 deal with the gadgets, or face dropping 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 among the issues are longstanding points that may simply be defined, whereas others have been one-off issues brought on by 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 desirous to guarantee that individuals did not have to fret about taxes and going onto tax sale lists due to the immense strain of COVID,” McDougall mentioned. “Individuals had misplaced work, companies have been struggling and that was all a part of COVID form of survival mode.”

A woman speaks and gestures with a Nova Scotia flag in the background.
Mayor Amanda McDougall says CBRM’s longstanding debt makes it troublesome to put aside cash in reserve accounts, however the municipality is making progress. (Tom Ayers/CBC)

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 situation 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 vital 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 components 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 exhibits 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, making an attempt to plan and finances,” McDougall mentioned.

“We’re coming into into finances season and never having that components in hand, however I feel that’s indicative of how laborious persons are working to guarantee that that components goes to be finished proper.”

Many of the monetary indicators cited as issues by the province truly confirmed enhancements in 2020-21 over the earlier yr.

A large red brick building with plenty of windows is shown.
McDougall says she is hopeful that negotiations with the province will produce a brand new funding components for municipalities that helps increase CBRM’s monetary image. (Tom Ayers/CBC)

One which obtained worse was the municipality’s debt service degree, however McDougall mentioned CBRM’s use of short-term borrowing is completed 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 extra money for CBRM.

“I do not assume there may be 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 mechanically sends a warning letter to communities with six or extra indicators at medium or excessive danger.

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 advised 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 a giant 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 bear in mind the unsure financial system, however nonetheless anticipated municipalities to gather taxes.

“There was cash superior in anticipation of perhaps having individuals have problem gathering taxes, so we did supply that to each municipality, that there could be ‘Hey, we all know you might have hassle 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 finances continues to be within the works, however it’s anticipated to incorporate the hiring of an extra tax collector.


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