UPDATE Kings County municipalities get a snapshot of their financial health

Send to a friend

Send this article to a friend.

Kentville Mayor Dave Corkum

Wolfville is in better shape than some towns, chief administrative officer Josh Pyrcz says.

“Wolfville is pleased to see the provincial release of the Financial Condition Index summarizing key municipal indicators for all municipalities across the province, and is equally pleased to say the town compares favourably with other towns in the areas of established benchmarks,” he said.

Wolfville meets the threshold and town average in 11 of the 15 categories measured by the Financial Condition Index (FCI), a new tool launched May 15 that that gives a snapshot of the financial health of a municipality, including revenue, budget and capital assets.

Charts are available online that score the towns based on their financial health, which are colour-coded green, yellow and red to indicate which category they fall in.

"This is just a snap-shot, it isn't the full story,” cautioned Mark Furey, minister of Municipal Affairs. There may be reasons why a particular indicator is red or green, he said, and the colours don’t necessarily mean good or bad.

The index was developed after a recommendation of the Towns Task Force and was worked on by Municipal Affairs, the UNSM and the Association of Municipal Administrators.

Kentville Mayor Dave Corkum was chair of the Towns Task Force.

“These fiscal indicators aren’t meant to be a total report card, but rather a tool for municipalities, the provincial government and the citizens of the municipalities.

“We all generate audited financial statements on an annual basis, but they’re sometimes difficult to understand. It ‘s important not to automatically assume red is bad, and green is good. Often, there are extenuating circumstances,” Corkum said.

“Municipalities often have funds in reserve, and there are both advantages and disadvantages to having funds in capital.”

 

Kentville

Corkum’s own town is one example of extenuating circumstances. In Kentville, the only area where the town’s municipal indicator score does not meet the town threshold is its operating reserves. Kentville has a score of 3.4 per cent, well below the town average of eight per cent and the town threshold of above five per cent.

The town was also placed in the category of having a municipal indicator score that meets the threshold but does not meet the town average in commercial property assessment (22.2 per cent, compared to the average of 23.1 per cent); residential tax effort (3.5 per cent, compared to the town average of 3.3 per cent); debt service (9.4 per cent compared to the town average of 7.4 per cent); outstanding debt (1.4 per cent compared to the average of 1.3 per cent); and five-year capital purchases (209.8 per cent compared to the town average of 211.6 per cent).

“We’re in great shape. We’re low on operating reserves, but we’re working on that,” he said, adding that the index doesn’t reflect the fact that Kentville has $13 million in reserve from the sale of the electric utility a number of years ago.

The town, he added, is well off compared to other municipalities in Nova Scotia.

“You can’t paint everyone with the same brush. I believe we’re doing the right things,” he said, both as a town and “in how we share services with our neighbours.”

 

Wolfville

Pyrcz says the indicators should promote “good, informed discussion” in the community and around the council chambers.

Wolfville did not meet the town threshold in three categories – commercial property assessment (9.1 per cent, which is below the town threshold of above 20 per cent and the town average of 23.1 per cent); residential tax effort (4.1 per cent, which is above the town threshold of below 4.0 per cent and the town average of 3.3 per cent); and undepreciated assets (59 per cent, which is above the town average of 58.6 per cent, but does not meet the town threshold, which should be above 60 per cent).

Wolfville also fell below the town average in its five-year capital purchases, with a score of 187.6 per cent compared to the town average of 211.6 per cent. 

“Wolfville’s results include 11 ‘green’ indicators out of 15. Only three indicators show as red and these are in areas that council has already identified in past years,” Pyrcz said. “This includes commercial/industrial assessment which council has made one of its top priorities. We are extremely pleased to see our ‘healthy’ indicator results far outweigh any of the questionable results.” 

The fact that the data is from 2011-2012 is also something the town will keep in mind, he added.

“The FCI is a current snapshot of financial indicators, the more important piece of information will be the trends over time as defined by the indicators,” he said. “At this stage the snapshot is based on data that is two years old (March 31, 2012) and we look forward to moving forward in mapping trends based on current data.”

 

Berwick

Berwick had several areas where the town’s municipal indicator score did not meet the town threshold, including three-year change in tax base (1.8 per cent compared to the town average of 5.4 per cent and the town threshold of 8.4 per cent); commercial property assessment (19.5 per cent, compared to the town average of 23.1 per cent and the town threshold of 20.0 per cent); the residential tax effort (4.3 per cent, compared to the town average of 3.3 per cent and the town threshold of below four per cent); deficits in the last five years (two, out of a town average of one for towns and the town threshold of below one); operating reserves (1.1 per cent out of a town average of eight per cent and a town threshold of above five per cent); and undepreciated assets (58.3 per cent, compared to the town average of 58.6 per cent or the town threshold of above 60 per cent).

Berwick’s outstanding debt met the threshold with 1.5 per cent, but was above the town average of 1.3 per cent. Berwick’s five-year contributions to its capital reserves received a score of 10.4 per cent, which was above the town threshold of 10 per cent, but was below the town average of 13.8 per cent.

 

County of Kings

According to the indicators, the Municipality of the County of Kings has solid financial policies and procedures in place to ensure the financial sustainability of the county in the years to come.

The biggest challenge in Kings County is aging infrastructure, leading to a score of 51.4 per cent for undepreciated assets. The rural municipality average is 65.9 per cent and the rural municipality threshold is 60 per cent.

The county, in its comments to explain its rating, says it has recognized its challenge is in regards to its aging infrastructure. In particular, the county’s sewer infrastructure assets are reaching the end of their useful lives, which is the primary reason for why the county has higher depreciated assets. Council and staff are working towards a fiscally responsible path towards planning the replacement of the sewer infrastructure and are following a long term sewer funding model.

The municipal indicator score for the county does meet the threshold, but does not meet the rural municipality average, in the three-year change in tax base (9.4 per cent out of a recommended 9.9 per cent); commercial property assessment (12.8 per cent compared to the average of 13.4 per cent); deficits in the last five years (one per cent compared to the average of 0.6 per cent); liquidity (1.4 per cent compared to the average of 2.2 per cent); operating reserves (14.1 per cent compared to the average of 24.3 per cent); and five-year capital purchase (248.2 per cent compared to the average of 324.2 per cent).

 

The index is available at http://novascotia.ca/dma/finance/indicator/fci.asp .

Organizations: Towns, Association of Municipal Administrators

Geographic location: Kings, Kentville, Nova Scotia

  • 1
  • 2
  • 3
  • 4
  • 5

Thanks for voting!

Top of page

Comments

Comments