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Municipalities across province warned of risky fiscal status

Municipalities across Nova Scotia underwent a 13-category financial audit called the Financial Condition Index. This year a number of municipalities were flagged for high and moderate risks, but the majors of those municipalities are not alarmed.

Provincial audit of municipal financial conditions flags concerns in 13 categories

Pam Berman · CBC News ·
Municipalities across Nova Scotia were assessed for financial health. The Town of Yarmouth received three red flags denoting high risk and three yellow flags denoting moderate risk for financial concerns.

A number of towns in Nova Scotia continue to have fiscal challenges, according to the latest provincial assessment.

The financial condition index measures the municipalities in 13 different categories, including uncollected taxes, budget deficits, reliance on government transfers or a single business and the amount of savings that a municipality has on hand.

The Town of Lockeport on the province's South Shore, received four red flags for high risk and four yellow flags for moderate risk — the most of any municipality. It was flagged for the amount of the town's savings and its reliance on a single business.  

Lockeport's mayor, George Harding, insists the town's financial situation has improved over the past three years, saying Clearwater Seafoods, the main employer, has just invested $1 million.

"It appears that Clearwater is not going to go away any time soon," said Harding.

The town of Lockeport was flagged for reliance on a single employer. Clearwater Seafoods is the main employer in the area. (Shaina Luck/CBC)

He added that using even a minimum amount of savings, or reserves, for capital projects in small communities can trigger warnings from the financial index.

"I think it [the index] serves larger units better, but it's still a useful tool for our council to review."

Mulgrave received four red flags and two yellow ones. The town tried to amalgamate with the Municipality of the District of Guysborough, but pulled out of the process when Guysborough officials said they would oppose the move.

Concerns about small communities such as Mulgrave and Lockeport have been raised before, but the latest assessment also shows three red flags and three yellow ones for Yarmouth, one of the province's larger towns, with 6,500 people.

Yarmouth mayor not worried

Red-flag concerns for Yarmouth cover budget deficits, the amount of reserves and a decrease in the town's tax base. Yarmouth Mayor Pam Mood said town officials take note of the information provided, but she's not worried.  

Pam Mood, the mayor of Yarmouth, said she's not worried about the assessment of the town's finances. (Peter Dawson/Radio-Canada)

"It doesn't matter how much money you have in reserve if you aren't spending any of it on your infrastructure," said Mood. "If you do what we're doing and fix it as you go, then you're not digging the hole any deeper."

Mood points out under a former assessment regime that included 15 categories, Yarmouth was "at the top of the heap." She feels confident about the town's future because small businesses are moving into boarded-up spaces and that will increase the tax base.

Most of the rural municipalities had fewer fiscal concerns, with the exception of Guysborough and Digby, which both had three red flags each.  

The only municipality with no red or yellow flags is the Municipality of the County of Kings.

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