How 3 high-risk Nova Scotia towns say they're turning around their finances

After years of being flagged as financially high risk by the provincial government, three Nova Scotia towns say recent changes including staff cuts and new businesses that add to the tax base have helped move them in a better direction.

Trenton, Oxford and Clark's Harbour were all considered at "high risk of financial instability" in the most recent report of financial indicators, which examined 2021 and was released by the province earlier this year. They have all held that ranking since 2019.

"What it requires is extensive planning — which is why we entered into, you know so we have taken drastic steps to change our direction," said Trenton Mayor Donald Hussher.

Trenton, a Pictou County town of about 2,470 people, hired a new financial director to help bring in better budgeting practices. They also started regular financial reporting to make sure things stayed on track, Hussher said, a better process for collecting back taxes, and increased the funds going into reserves.

These moves were taken to tackle the fact that six of the 12 financial indicators for fiscal year 2020-21 were in the medium or high-risk categories. 

The changes are all part of Trenton's recent action plan to address the financial indicators, which also has specific targets. The report said Trenton's staff and council are used to budget and risk management, having worked through "significant challenges" with major revenue losses related to the Trenton steel plant through the 1990s and early 2000s.

Hussher said while the risk of relying so much on a single business isn't likely to change soon — the local Nova Scotia Power plant is a major piece of their revenue — they are looking to ramp up development in their large commercial park to bring in more taxes.

"We're hitting all the bases and we have a lot of interest in development in the town … mostly business and residential," Hussher said.

"We're working at it and we hope to be a success."

Oxford cut staff, focused on 'frugal' budgets

Up in Cumberland County, Oxford's four high-risk and four moderate-risk indicators for 2021 warned that issues with reserves and deficits in two of the past five years were cause for concern. The town has a population of about 1,190.

But town accountant Ruthanne Brookins said their reserves have grown over the past two years and now "we're in a much better financial position."

Brookins said they've made cuts to staff and major expenses, carried a "very frugal budget," and had a tax sale for the first time in years which saw the town sell three properties.

She predicted they will see improvements when the 2022 provincial assessments come in, but Brookins said it will likely take some time to leave the "high-risk" designation behind given their recent deficits.

At the southern tip of Nova Scotia, Clark's Harbour on Cape Sable Island in Shelburne County is a town of about 760 people.

Although none of their indicators were individually considered high risk for 2021, six were moderate and tipped them over the edge.

Town clerk treasurer Jennifer Jones said their one deficit in recent years was in 2019 when renovations were done to low-income housing and a senior's complex. The province carries most of the funding for those projects but the town took an unexpected $80,000 "blow" since they bear part of the costs, Jones said.

The town now has an asset management policy in place to rank what needs immediate attention and what projects can wait, Jones said, and has also budgeted for funds to flow into reserves this year barring any major issues.

A new lobster processing facility assessed at more than $3 million has also been a "big help" for the tax base, Jones said.

Things are going well enough that Jones said the town is moving ahead with plans for replacing a wastewater treatment facility alongside their Municipality of Barrington neighbour.

"We've got a little money put aside. You know, it's looking up, I'll put it that way," Jones said.

Middleton, in Annapolis County, was the only other town considered high risk in 2021. They had one high-risk indicator (a recent deficit) and five moderate ones including issues with reserves and aging infrastructure.

CBC reached out to Middleton staff but did not receive a response by deadline.

The Cape Breton Regional Municipality was also considered high risk, while the remaining municipalities Nova Scotia were considered moderate or low risk.