The financially-struggling village of Baddeck, Cape Breton will remain a village for now, but residents and business owners are facing steep increases in taxes and utility bills to keep their businesses going.
Nova Scotia Municipal Affairs Minister John Lohr has given the municipality until May 1 to comply with nine orders, including one to produce audited financial statements for the past two years and one to draft a budget for the coming year.
Another was to hold an annual meeting of voters.
“The Village of Baddeck and the Village Commission have come through this difficult and scary year,” Commissioner Michele Stephens told the approximately 125 people at a meeting at Inverary Resort on Monday. “If we look at it as a business…it’s easy to see that our numbers aren’t ideal.
“We also know there have been issues: mismanagement, misconduct, lack of oversight.”
Still, the village should be allowed to continue and make improvements, she said.
The commission fired its executive director last fall and brought in retired Richmond and Port Hawkesbury County acting chief executive Maris Freimanis.
They have also hired Sydney accounting firm MNP to put the books in order, but on Monday commission chairman Bill Marchant said there was not enough time to get audited financial statements.
The accountants also said that no financial statement had been drawn up for any of those years because the records were in disarray and there was no time to straighten them out.
In February, Freimanis said there was no way to meet the ministerial deadline and the province said there would be no extension.
On Monday, MNP’s Sonny MacDougall said the village had run bigger and bigger deficits every year since 2019, with last year’s shortfall amounting to around $348,000.
According to provincial legislation, municipalities are not allowed to run deficits.
The commission was unable to create an appropriate budget for the coming year, he said, but projections prepared by Freimanis show the village will be short by nearly $500,000 and will need increases in taxes and charges to make up the difference.
The figures suggest a tax rate increase of 24%, with residential taxes rising from 21 cents to 26 cents per $100 of assessment.
The commercial rate is also expected to increase by six cents to 31 cents per $100 valuation.
Current sewer charges of $2.75 per cubic meter are expected to double to $5.45.
Water rates are expected to rise significantly, possibly as much as 80% more, but a study would need to be completed and approved by the Nova Scotia Utility and Review Board before an actual amount can be set, MacDougall said. .
Freimanis also said further increases will be needed to increase capital reserves to replace aging infrastructure.
Motion to dissolve fails
The village will need approximately $800,000 in the near future for repairs and improvements, including the replacement of a sewage lift station estimated at $350,000 and an additional $100,000 for backup power. of the water system, he said.
Village commissioners voted to start the dissolution process in November, saying they lacked the resources to continue.
However, voters overwhelmingly voted against the proposal at a public meeting the following month, saying they wanted access to finance.
The ministerial order also called on the village commission to present at least three governance options, but residents were told on Monday they had two choices: status quo or dissolution.
After the introductions, Marchant called for a motion from the floor to dissolve the village. After a few moments, a man moved the motion, but no one seconded it.
Marchant then said the village would continue to operate and adjourned the meeting.
In an interview afterwards, he said the voters had spoken.
“I think it was made clear to them tonight that there will be an increase in all three costs – acreage rate, water rate, sewer rate – and they seemed happy with that,” Marchant said.
Resident Katrina MacKenzie said increases in taxes and utility rates were inevitable even if the village was disbanded.
“It’s going to be an increase whether we stay a village or not,” she said. “It may be going to be difficult for some wallets, but it has to be done in order to maintain what we have.”
People seem willing to accept increased taxes and charges as long as services are maintained, Stephens said.
“We haven’t had rate increases since 2013, so they are coming and residents and taxpayers know it and these are all going to go a long way towards how we get back on track financially.”