What N.S. municipalities under financial scrutiny plan to do about it

Seven Nova Scotia municipalities facing financial challenges had to come up with action plans for the Department of Municipal Affairs based on their 2017 assessment results.

CBC News obtained copies of the action plans for Clark's Harbour, Cumberland County, Lockeport, Mulgrave, Trenton, Westville and the Town of Yarmouth.

The request for a followup plan is based on the number of red and yellow flags in an index of the municipality's financial conditions,

That includes categories for the reliance on government transfers, the amount of debt and the level of savings.

Moderate or high risk in six of 13 categories triggers the call, but some of the communities question the provincial evaluation itself.

"We know we're doing things right," said Yarmouth Mayor Pam Mood. "After we took a second look at it we decided to stay the course."

In fact, Yarmouth's action plan suggests a new study is needed to determine "the most valid and reliable predictors of municipal success or failure."

Westville also believes it is in good financial shape.

Officials point out it has the lowest per-capita spending of all the towns in Nova Scotia. Westville insists its operating reserves would have been on target, but the town lost a court case with a contractor and the $343,280 award depleted the account.

Other communities suggested some of the change needed should come from the province.

Trenton attributed the limited growth in its tax base to a provincial freeze on the size of its grant in lieu of taxes for the power generating plant and the cap on property assessments.

The town's action plan suggests the Nova Scotia Power grant could be adjusted to reflect the full assessment value. 

In the meantime, Trenton officials have decided to reduce their reliance on the grant money by using it for non-essential services.

Mulgrave's action plan talks about a recent amalgamation attempt that was rejected by the Municipality of the District of Guysborough and the need for the province and the town to come up with a "new direction of the community."

Mulgrave officials also mentioned provincial support for road upgrades to Route 344.

According to the action plan of Cumberland County, the amalgamation with Parrsboro and Springhill temporarily increased the municipality's debt levels, but that situation is now changing along with the amount of uncollected taxes.

County officials added there has been a tax rate increase in the 2018-19 budget partly to transfer money to reserves. Cumberland's warden believes the province's financial assessment paints a fair picture.

"It keeps the municipalities aware of where they are and what they need to do and, wherever there's a weakness, to try to deal with that weakness," said Allison Gillis.

Clark's Harbour had the shortest action plan of the group — a two-page letter from the mayor. Trenton's, by comparison, is 51 pages.

Officials in Clark's Harbour have increased the amount of money going into operating reserves and will continue increasing it "until a low-risk rating is achieved."

Lockeport's action plan acknowledges that uncollected taxes have been a concern for three years, but the situation improved in 2017. It hopes further changes will help, including an online payment system for taxes.

To get a better handle on budgeting, Lockeport officials have requested assistance from the Nova Scotia Municipal Finance Corporation.

On Monday, the province issued a response to some of the criticism levelled in the action plans.

"A collaborative review of financial condition indicators was conducted by the Municipal Indicator Committee (MIC) which is made up of municipal administrators, municipal elected officials, and DMA staff in 2017," said spokesperson Krista Higdon.

"The review drew on expert knowledge of current and emerging practices. The indicators were updated in 2018.  Further changes will depend on the recommendations of the committee.  No updates are anticipated for 2019."