Fort Simpson (Apr 29/05) - The village versus hamlet debate in Fort Simpson may be academic.

Should the community decide to revert to hamlet status, it would be an unprecedented move. Michael McLeod, minister of Municipal and Community Affairs, said last week that it would likely require a change to existing NWT legislation and take about two years to implement.

However, he cautioned that in two years the department's "New Deal for Community Governments" will also come into effect giving hamlets taxation authority.

"It may mean (Fort Simpson) will be back to where they are now, or very close... I don't know if a change from village to hamlet would have that much of an effect on their fiscal situation," McLeod said.

The New Deal legislation is intended to put more resources in the communities to help them adapt to regional self-government, said McLeod.

Fort Simpson faced the greatest reductions under the existing formula funding arrangement introduced in 2001/02. The village's budget has decreased to $918,288 this year from $1.75 million in 2000.

Since that time, the mayors and village councils have been imploring the territorial government to restore the community's funding.

Mayor Raymond Michaud said he remains hopeful that "in the near future," the village will negotiate a deal that "will make our existence as a village a little more appealing than reverting to hamlet."

"Both sides have publicly stated that there is something wrong with the formula," Michaud said.

McLeod, on the other hand, said his department has not acknowledged that Fort Simpson has been shortchanged by the formula.

The department sent some of its financial staff to Fort Simpson earlier this year to review the municipality's books.

That information should be "fully analyzed" within the next two weeks, said McLeod.

By the end of May, a summary report on the department's review of its formula financing - for all NWT communities - will be ready, according to the minister.

"Until that's completed, I can't tell you why or where the problems are, or what's causing the problems, if it is a shortage of money or budgeting," he said.

Whatever the outcome, he said the department will support Fort Simpson's decision on village versus hamlet.

Asked whether he feels there is room for the village to raise taxes or water rates, McLeod replied: "That's a decision the (village) has to make, not me. If you want certain services as a village, you've got to pay for it. If you're willing to live as a hamlet, and cut your services down to what a hamlet receives, then you've got to be able to live with that too."