Fort Simpson (Jan 24/05) - A study examining the benefits and disadvantages of hamlet versus village status in Fort Simpson has been released.

It recommends that the village continue to lobby for changes to formula financing.

In the 45-page report, consultant Andrew Gaule acknowledges that some significant grey areas remain when questioning the 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.