Rising provincial costs pushing Mulgrave into insolvency, CAO says

Officials in Mulgrave, N.S., blame rising provincial costs for policing, education and housing for forcing the town to the edge of a financial cliff.

"These increased costs are contributing to pushing the town into insolvency," said Darlene Sampson, the chief administrative officer for Mulgrave.

Town council is still working on next year's budget, but financial documents indicate a $100,000 shortfall, where it had a surplus last year and the year before. Tax revenues are down, but the bills for provincial services are up.

Mulgrave is located near the mainland side of the Canso Causeway. Policing for the small community is provided by the RCMP detachment in Port Hawkesbury, which is in Cape Breton.

Mulgrave's population has declined 18 per cent over the past 14 years to 722 people, many of them seniors. But the cost of the RCMP is up 2.6 per cent this year, and 27 per cent over the past nine years.

Sampson said crime rates in Mulgrave are "very low," and where the town doesn't have its own detachment and no officers living there, she believes the town's policing bill should be reviewed.

'Costs are not sustainable'

"We feel that we are contributing very little to the workload and cost driver of that department," she said. "The costs are not sustainable, especially given our declining [population.]"

Mulgrave has written to the minister of justice to ask for a review of its policing bill. A spokesperson for the Justice Department confirmed in an email to CBC News that the request has been made.

"The department's role is to support the town and RCMP in conducting such a review," said the spokesperson.

Mulgrave also plans to ask for reviews of its education and housing bills. Education costs are up 14 per cent over the past six years, even though the town's school was closed in 2018. The bill for 20 social housing units almost doubled this year, from $18,000 to just over $35,000.

The increased costs come at a time when provincial support in the form of financial capacity grants have been frozen for years. The province provides about $32 million to municipalities to try to ensure each has access to reasonably comparable services at similar tax rates. Mulgrave received $127,508 last year, but hasn't got the number for this year yet.

New water treatment plant

Town officials are also concerned about the costs of building a new water treatment plant. It's a required project with a total estimated cost of $7.3 million. Ottawa has agreed to cover 40 per cent and the province is covering 33 per cent, but that still means Mulgrave will have to borrow $1.9 million — more than the town's annual operating budget.

Requests to reduce the municipality's share to 10 per cent of the total price have gone unanswered, even though the province has decided to pick up the Cape Breton Regional Municipality's share of its $100 million wastewater treatment project.

At a May 11 council meeting, Mulgrave Mayor Ralph Hadley complained about "the inequity and unfairness" of the situation.

Province does financial assessments of municipalities

Every year, the Municipal Affairs Department does a financial assessment of each municipality in the province called the financial conditions index.

Sampson wants the department to calculate the town's index with a nearly $2 million loan factored in.

"I'm guessing it's going to spit out a bunch of red indicators that's probably going to show insolvency," said Sampson.

In an email, Municipal Affairs spokesperson Krista Higdon said ''At the time of the project being submitted, and based on the information they provided which we use to look at financial capacity, Mulgrave was in a financial position to undertake the project."

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