Yellowknife (Jan 21/05) - The Village of Fort Simpson should continue to lobby for changes to formula financing.

That recommendation comes from the first draft of a study examining village versus hamlet status.

In the 45-page report, consultant Andrew Gaule acknowledges that some significant grey areas remain in the question of most beneficial municipal status.

In particular, the New Deal for Community Governments being introduced by the Department of Municipal and Community Affairs (MACA), proposes that hamlets be granted municipal taxation authority. Before making a decision on changing status, Gaule recommends that the finer details of this new legislation be fully understood.

The report also notes that the long-term implications of Deh Cho self-government on the municipality are uncertain. Other realms are more concrete, however. In terms of finances, Fort Simpson, as a hamlet, would receive $246,073 more in formula financing from MACA. However, that would be offset by a loss of $904,325 in taxation revenue and grants-in-lieu. Gaule predicts that the shortfall would impact the municipality's operations and maintenance activities.

Yet by remaining a village, Fort Simpson faces an unfavourable formula financing arrangement that will severely limit capital expenditures. Gaule describes the current formula financing arrangement as "clearly deficient in the case of Fort Simpson."

Private property owners would thrive under a hamlet, the study noted. A Fort Simpson homeowner currently paying $1,500 in property taxes would pay approximately $285 per year under a hamlet. A change in status wouldn't have any direct effect on the cost of water and sewer services either, the report states.

As a hamlet, the municipal council would see little change in areas of jurisdiction, the study indicates. Community infrastructure such as the recreation centre, sewage treatment plant and Visitor Information Centre would remain the property of the municipality, Gaule wrote.

If Fort Simpson does choose to revert to hamlet status - an unprecedented move in the NWT - it could take at least two years, according to Gaule. MACA is currently seeking a legal opinion as to whether a tax-based municipality can become a non-taxing authority without changes to existing legislation.

At Monday's meeting, council approved an interim 2005 budget that carries an $831,954 deficit.

Mayor Raymond Michaud, senior administrative officer Bernice Swanson and Gaule are tentatively travelling to Yellowknife for a Jan. 28 meeting with MACA officials to discuss the draft study, the 2005 budget and formula funding.

'Some ammunition'

Michaud said the study has given him "some ammunition" to make MACA realize the village's circumstances are different. He said he's not seeking extraordinary government funding, but a formula that "fits our needs."

A Jan. 24 meeting with Gaule at village council chambers, where councillors can ask questions or express concerns, should be open to the public, according to Michaud. He said the doors will only be closed if council votes to go in camera.