CBRM AT ODDS WITH PROVINCE OVER $2M TAX BILL
Municipality claims health authority owes more than $2-million
The Cape Breton Regional Municipality is at odds with the province over a $2-million bill it levied on the Nova Scotia Health Authority (NSHA) for local sewer and fire protection services.
The outstanding “receivable” of $2,062,485 includes interest and dates back to the 2014-2015 fiscal year, before the amalgamation of the province’s health authorities, and accounts for approximately 11 per cent of the municipality’s total outstanding taxes as of the end of the last fiscal year that ended on March 31.
CBRM chief administrative officer Marie Walsh explained that at that time the municipality introduced a bylaw that allowed it to charge an “area rate” for services rendered to entities, including schools, universities and the NSHA, that were otherwise exempt from base residential or commercial tax. “The schools and university have paid this service fee every year, but the hospital has not,” said Walsh, who was the CBRM’s chief financial officer before taking on CAO duties earlier this year.
“It’s a difficult situation because we have no leverage here with the provincial government, that is unless we want to cut off their sewer and water or sell off the hospital in a tax sale — I hate to go political, I prefer to settle things in a quiet manner, but I’ve been dealing with this for a long time in a bureaucratic manner and I have been getting no response.”
With the cash-strapped municipality looking to recoup every dollar it can, CBRM Mayor Cecil Clarke recently raised the issue in a letter he penned to provincial Health Minister Randy Delorey.
In the Sept. 15 letter, Clarke said the ongoing issue was once again brought to the attention of CBRM council by
MGM and Associates, the Sydney-based accounting firm that conducts an annual external audit of the municipality’s financial records.
“The auditors are questioning the collectability of this receivable which would lead to a write off and a direct hit to the bottom line of the Municipality — these user rates are paid to other municipalities, particularly HRM (Halifax Regional Municipality) that collects a sewer rate through the water utility,” wrote Clarke, in the letter he also sent to Cape Breton’s two provincial cabinet ministers — Glace Bay MLA Geoff MacLellan, (minister responsible for business, energy, trade and Service Nova Scotia) and Sydney-Whitney Pier MLA Derek Mombourquette (municipal affairs minister).
“We currently score poorly in the municipal indicators around outstanding receivables largely due to this outstanding receivable from the health authority — I would ask that you please address this issue before our auditors meeting of September 25.”
However, the issue was not resolved as of Monday’s CBRM audit committee meeting, prompting the NDP’s Tammy Martin, MLA for Cape Breton Centre, to raise the matter during Wednesday’s session of the provincial legislature.
During the house of assembly’s question period, Martin pointedly asked both Mombourquette and Delorey why they weren’t pressuring the NSHA to pay the CBRM what it owes.
“Neither of them gave a clear answer,” Martin told the Cape Breton Post during a telephone interview from the legislature.
“We know the health authority makes payments to other municipalities like the HRM, so why is Cape Breton being treated any differently?”
For his part, Delorey acknowledged that his department is aware of the situation.
“We are working with both parties to facilitate a resolution that is fair and appropriate based on the facts,” he responded in the legislature.
“This is a longstanding issue that pre-dates the creation of the Nova Scotia Health Authority — we believe a resolution can be achieved and we are encouraging the two parties to resolve it as quickly as possible.”
The outstanding tax the CBRM claims it is owed by the health authority is part of the $19.5-million in gross tax receivable as of the end of the 2016-2017 fiscal year.
That figure, in turn, represents about 20 per cent of the $104-million the municipality levied in taxes over that period.
Earlier this week, MGM and Associates confirmed CBRM financial figures that showed municipality revenues of $148,269,745 and expenditures of $147,084,473 for a surplus of $1,185,273 over the 2016-2017 fiscal year.
The audit also doublechecked the municipality’s long-term debt, a figure that is presently at $54-million, but that according to CBRM chief financial officer Jennifer Campbell is closer to $72-million when the additional borrowing requirements for capital projects budgeted for over the past two years are taken into consideration.