A reality check from the Hamlet of Clyde River
This is in response to the article “No to community closures” in the November 12, 1999 issue of Nunatsiaq News.
The article projects the picture that the hamlet is adequately funded and that the financial difficulties experienced by the Hamlet of Clyde River are the result of the Hamlet’s inability to manage its resources.
Financial deficits in municipal operations started in 1988 when the unconditional funding was reduced and reduced again in 1989. Ten years later, in1998, contributions finally reached the level of funding received in 1987.
Currently, the amount of funding per capita is equivalent to $7O2 per person, compared to $1,164 per capita in 1987.
Deficits in the water and sewage program accumulated to its level in a year and a half, caused by a reduction in the water and sewage subsidy to the municipality.
Other revenue sources have shrunk, either through regulation or takeovers by private companies. While the role of the municipal government has changed and its responsibilities increased, the municipal funding formula and government policies have not been responsive to the changing role of municipalities.
Administrative responsibilities in the municipality have increased by 174 per cent, while the funding allocated for administration has not changed.
Municipalities have become program delivery and coordinating agents at time when they do not have a say in whether to take on or develop policies and criteria governing the programs, criteria that at times restrict them from recovering administration costs.
Different approaches have been taken to eliminate the financial deficit in the municipality. A deficit recovery plan developed in 1993-94 tried an approach of reducing the number of work days to nine instead of 10 every two weeks.
This approach had an adverse effect on the community’s economy which was already at its worst state and put a burden on municipal staff to do the same amount of work in less hours.
A deficit again ocurred in fiscal years 1994/95 and 1995/96 mainly because there were no capital items in the plan for those two years. Other approaches in 1996/97 were based on the capital items planned for the next two years, but the deficit wasn’t eliminated because anticipated revenue did not materialize for the reason that Hamlet equipment was not rented out to contractors, because some of the projects were deferred and construction schedules were delayed late into the construction season.
The article also projects the picture that the Hamlet is overspending and does not have controls in place to manage its financial resources and that accountability is a question.
In compliance with legislation, every year audit reports are submitted to the minister and for the past four years, including the period ending March 31, 1999, the audit reports had an “unqualified” auditors opinion, which means all funds received and cash disbursed are accounted for and are in compliance with Hamlet council minutes and resolutions, and control procedures within the Hamlet are working, althrough some improvements could be made.
The average annual income of an employee within the Hamlet of Clyde River is lower than the average income within the government of Nunavut. Average income in the community of Clyde River in 1994 was $14,743, while it was $26,486 for the region. The Hamlet has strict controls on spending, purchase orders are used, and municipal employee are paid for work performed based on punch-in, punch-out time cards, while employees do not get paid on storm days.
Thc Hamlet of Clyde River was fortunate enough to receive funding for a financial controller in 1998, after it approached the Department of MACA for funding in 1995. However, the Hamlet has not been able to fill the position because of the level of pay and benefits accompanying the position, although the pay and benefits for this position are the highest within the Hamlet operation.
Municipal service equipment is maintained adequately by mechanics with rebuilt parts, rebuilt by municipal mechanics. If a solid vehicle part should be worn out, it is welded, grinded, and sanded and used again. Almost every piece of steel is saved, even bed frames.
In a community such as Clyde River, almost all lumber is re-used. Two-by-fours or two-by-sixes, even if they are only two feet long, are saved for building materials. If they are under-sized, they are used as fire-wood for heating houses.
The Hamlet of Clyde River, in cooperation with its residents, has been maintaining municipal services at an acceptable level or standard, making use of the limited financial resources available.
My understanding of the role of the Department of Community Government and Transportation is to help community residents, including Hamlet councils, become fully knowledgeble of community governments, to develop local skills through the education and training necessary for running a local government, and safeguard municipalities through proper evaluation and implementation of community programs that are in the best interests of the municipalities and the community’s development.
It seems their approach to municipal government and community development has been to condition communities through strict policies and conformity — for example, withholding unconditional funding until monthly financial statements, including a bank reconciliation, are submitted.
This policy may be for the purpose of accountability, however, the main report that municipal legislation requires is an annual audit report, which is submitted at the end of every fiscal year in the format developed by the department.
This monthly financial statement requirement had some negative financial impacts on some of the municipalities, in that submission of the financial statement could be delayed by staff on annual leave, staff on training courses or on medical leave, while the municipality is restricted by limited financial resources from hiring relief workers to perform the duties.
Productivity is very crucial in the municipalities. There are municipal staff who have not taken a good rest from their duties for a long time, because their annual leaves have to be separated out year after year to two to three days leave at a time to maintain productivity and to prevent disruption of revenues within the Hamlet operations.
Is accountability really a question, are the community and the Hamlet’s operations really out of control?
This is for everyone’s own judgement. However, the people of Clyde River, the Hamlet council, present and past employees of the municipality, and people in other communities deserves credit for doing a great job of providing municipal services and other necessary services within their communities with very limited financial resources.
Thank you to everyone for their support.
Senior Administrative Officer