How three high-risk towns in Nova Scotia say they are flipping their finances

After years of being flagged as financially risky by the provincial government, three Nova Scotia cities say recent changes, including workforce cuts and new businesses adding to the tax base, have moved them in a better direction.

Trenton, Oxford and Clark’s Harbor were all deemed to be at “high risk of financial instability” in the most recent financial indicators report, which examined 2021 and was released by the county earlier this year. They have all held that ranking since 2019.

“What it takes is extensive planning — and that’s why we started, you know, so we took drastic steps to change our direction,” said Trenton Mayor Donald Hussher.

Trenton, a Pictou County town of about 2,470, has hired a new chief financial officer to help implement 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 funds going into reserves.

These steps have been taken to address the fact six of the 12 financial indicators for the 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 financial indicators, which also has specific targets. The report said Trenton’s staff and board are accustomed to budget and risk management, having endured “significant challenges” with large revenue losses associated with the Trenton steel mill in the 1990s and early 2000s.

Hussher said that while the risk of being so dependent on a single company is unlikely to change anytime soon – the local Nova Scotia Power plant is a significant part of their revenue – they want to ramp up development of 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 city…especially business and residential,” Hussher said.

“We are working on it and we hope it will be a success.”

Oxford cut staff, aimed at ‘frugal’ budgets

In Cumberland County, Oxford four high-risk and four medium-risk indicators for 2021 warned that problems with reserves and deficits were cause for concern in two of the past five years. The city has about 1,190 inhabitants.

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

Brookins said they have cut back on staff and major spending, had a “very frugal budget” and had a tax sale for the first time in years with the city selling 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 move past the “high risk” designation given their recent shortages.

Clark’s Harbor on Cape Sable Island in Shelburne County, at the southernmost tip of Nova Scotia, is a town of approximately 760 residents.

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

Town Clerk Jennifer Jones said their only shortfall in recent years was in 2019, when renovations were made to low-income housing and a senior citizen complex. The county bears most of the funding for those projects, but the city took an unexpected “hit” of $80,000 because they bear some of the costs, Jones said.

The city now has an asset management policy to rank what needs immediate attention and what projects can wait, Jones said, and has also budgeted for money to flow into reserves this year barring major problems.

A new lobster processing facility, valued at more than $3 million, has also been a “major help” to the tax base, Jones said.

Things are going so well that Jones said the city is moving ahead with plans to replace a wastewater treatment plant next to their neighbor in the Barrington community.

“We’ve put some money aside. You know, it looks good, I’ll put it this way,” Jones said.

Middleton, in Annapolis County, was the only other city considered high risk in 2021 one high risk indicator (a recent shortage) and five moderate indicators including problems with reserves and aging infrastructure.

CBC contacted Middleton’s staff, but received no response within the timeframe.

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