Municipalities across province warned of risky fiscal status - Action News
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Nova Scotia

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

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, includinguncollected taxes, budget deficits, reliance on government transfers or a single business and the amount of savingsthat a municipality has on hand.

The Town of Lockeporton the province's South Shore,received four red flags for high riskand fouryellow flags for moderate risk the mostof any municipality.It was flagged for theamount of the town's savingsand its reliance on a single business.

Lockeport'smayor, George Harding, insists the town's financial situation has improved over the past threeyears, sayingClearwater 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 projectsin small communities can trigger warnings from the financial index.

"I think it [the index] serves larger units better, but it's stilla 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 ofGuysborough, but pulled out of the process when Guysborough officials said they would oppose the move.

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

Yarmouth mayor not worried

Red-flag concerns forYarmouth cover budget deficits, the amountofreserves and a decrease in the town's tax base.YarmouthMayorPam Mood saidtown 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 ifyou aren't spending any of it on your infrastructure," said Mood. "If you do what we're doing and fix it as you go, thenyou're not digging the hole any deeper."

Moodpoints out under a former assessment regimethat 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 threered flags each.

The only municipality withno red or yellow flags is the Municipalityof the County of Kings.