Tender issued
Study to examine viability of CBRM
The Cape Breton Regional Municipality has issued the tender for a viability study that will take an independent look at issues including its tax structure and the level of services it provides ratepayers, and CBRM officials believe it could ultimately bolster their arguments that the region is underfunded.
The concept for the study dates back to 2014, when it was a recommendation coming out of a fiscal review for the province, noted CAO Marie Walsh. A joint committee of the CBRM and the Department of Municipal Affairs is behind the initiative. The funding for the study was ultimately approved by the province last year and it will involve delving into the CBRM’s fiscal capacity and potential and the efficiency and effectiveness of core services within the municipality.
The tender was issued Oct. 23 for the study. The request for proposals closes Nov. 29. The project is not to exceed the budgeted cost of $224,000.
“Really, it’s looking at our tax structure — is there issues with CBRM on why they are not viable or how we can become more viable, comparing our tax structure and tax burden with other municipalities, looking at a jurisdictional scan of how much we spend on services compared to other municipalities, so what could we be doing better or what are we not spending enough money on,” Walsh said.
She acknowledged that there is a feeling among ratepayers that while the tax burden is high, it does not correspond to the level of services the CBRM provides residents.
“We will tell the province, ‘Yes, our taxes are too high, in order to provide the mandated services, these are the taxes that we charge,’ but at some point in time they say, ‘Well, your tax effort is not enough, you could be charging more.’ How do you tell that to the public?” Walsh said.
“This is somebody objective coming in saying, ‘This is what you spend on services, for a municipality of your size you should either be spending more or spending less. It’s somebody else coming in and saying that, and not us saying it.”
According to the 11-page tender document, the study includes a discussion of “what changes might be necessary to improve the overall viability of the CBRM’s circumstances in order to provide essential municipal services of reasonable quality at a reasonably comparable tax burden and effort.”
The project will involve an examination of the CBRM’s property tax base by the type of property and service levels as defined by the current tax rate structure. According to the RFP, that should include looking at assessment trends over the past decade and drivers of growth or decline. It will also look at the taxes derived from the property tax base in the CBRM, on a service level, with a focus on tax burden and tax effort, the document states.
Other issues to be addressed include a value-for-money assessment of the CBRM’s budget along departmental and project lines; exploration of the degree to which the CBRM has consolidated its operating, program and infrastructure expenditures; an analysis of the tax rate system, noting there are many area rates used in different communities reflecting different service levels across the region. The study will be conducted while considering the impact of the Capped Assessment Program (CAP) and an exploration of how it might look if the program was scrapped.
The study will also estimate the infrastructure deficit facing the CBRM, including the cost of necessary infrastructure that does not yet exist, such as the wastewater infrastructure necessary to meet pending regulatory requirements.
The study is to also provide recommendations for potential changes to the tax structure, budget items, budgeting approach, municipal programs, operations, or governance necessary to improve the viability of the CBRM over the medium to long term. There should also be discussion of the specific challenges facing the municipality as well as the state of the finances and the overall viability of the CBRM as an organization, the RFP states.
“There should also be a specific focus on whether the CBRM has access to adequate revenue to provide a reasonable level of quality services at a reasonable tax burden and effort for its residents,” the tender states.
The study could result in light being shone on areas where the CBRM could do things differently, a determination whether it actually is underfunded, or recommendations for provincial grants for the CBRM, Walsh suggested.
“I’m thinking that’s what it’s going to come back because in my personal opinion our services are no greater than any other services and yet in order to provide those we do have high taxes, commercially especially,” she said.
Determining whether the residential tax rate is appropriate is difficult to measure while the CAP is in place, Walsh added.
There’s also the matter of considering property assessments, which are lower in CBRM than in other municipalities.
While the CAP will be looked at under the study, the CBRM is also moving ahead with an effort seeking provincial approval for a pilot project involving what Walsh describes as “improving” the CAP. That initiative will go before CBRM council in November.
“You can’t really just take away the CAP because … the sticker shock would be too great for a lot of residents, so how do you improve that and make it a fair system for everybody, as opposed to people buying new homes and paying double the taxes that somebody next door pays,” Walsh said.
The contract is to be awarded in early December, with regular updates to be provided and draft reports to selected officials in March. The study is to be completed by March 31.