Derek Neary
Northern News Services

Fort Simpson (May 28/04) - The Department of Municipal and Community Affairs will fund a study on the pros and cons of Fort Simpson reverting to hamlet status.

MACA Minister Henry Zoe made the commitment during a 90-minute luncheon meeting with Mayor Raymond Michaud and several councillors in Fort Simpson on May 19. Zoe said he wants residents of Fort Simpson to know all the facts.

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Despite benefitting from huge reductions in property tax as a hamlet, the community's level of service would change and the territorial government would take over decision-making power on capital projects, he said.

Zoe warned that there is no way the MACA can meet community infrastructure needs over the next 20 years. He said formula financing from the federal government is insufficient, which is why the GNWT is fighting for control of federal programs through devolution.

Michaud countered part of the GNWT's financial shortfall could be due to its failure to raise taxes in hamlets. Fort Simpson has been a tax-based village since 1978 and it has raised property taxes and water rates many times since then.

In addition, the municipality's funding was slashed $500,000 by MACA last year, Michaud said.

"In all fairness we've taken one hell of a sacrifice," he said.

Councillor Norm Prevost said Fort Simpson residents see all kinds of new infrastructure in the Deh Cho's hamlets and wonder why their own community is lacking.

Books look good

Zoe said he looked at the Village's financial statements and remarked "you guys aren't doing too bad."

Senior administrative officer Bernice Swanson replied this fiscal year doesn't appear desperate, but the municipality used its entire surplus to balance its budget. It won't have that option available next year.

The village's water treatment plant and its landfill site will need to be replaced in the next few years. In addition, costs for fuel, freight, power and chemicals are rising, she said.

Village council knew funding cuts were coming three years ago and should have been prepared, Zoe remarked.

Regardless, he said he would have his staff analyze the current funding situation.

Michaud told the minister that the village has been complaining to MACA for years that it is severely underfunded for water and sewage and Zoe admitted the current water and sewage subsidy formula is "outdated."

Policy review

He said he has assembled a working group and given them a "fast-tracked," two-year mandate to carry out a comprehensive policy review.

Prevost said that's too long to wait.

The village is in line for a $600,000 matching grant from MACA to upgrade water and sewage mains, but Michaud said there's no way the village can pay its share, even over five years.

Councillor Dave Wright warned that Fort Simpson is rapidly approaching a financial crisis and something must be done soon.

In his closing remarks, Michaud thanked MACA's officials for doing their best to accommodate the village's "annual song and dance" for more funding.