The mayor and council reaffirmed their commitment last week to keep lobbying the GNWT Department of Municipal and Community Affairs (MACA) for a better deal when it comes to the funding formula, despite reports of progress being made on changes to the formula as a whole.
“We have two problems,” Mayor Andrew Cassidy told The Hub. “The formula itself is unfair to larger communities, and there’s the issue of how it is applied to comparable communities.”
MACA’s funding formula dictates how much government money communities get each year. While the formula covers four main areas – operations and maintenance, gas tax, water and sewer, and community public infrastructure – funding amounts are dependent on three main variables. They are population, total infrastructure, and the Northern Cost Index, the last of which is essentially the difference between the cost of living in Yellowknife and a given NWT community.
Hay River’s beef is primarily with the operations and maintenance funding it has received over the last two years – $300,000 a year less than in previous years. While most other communities have seen their MACA funding float back to pre-2010 amounts, Hay River has not.
Cassidy now sits on a panel created to review the funding formula, made up of about 15 people, split almost evenly between elected community officials and administrators. The panel met for the first of three scheduled times Jan. 13 and 14 to begin discussions on possible changes to the formula, a process originally scheduled to commence later in the year, according to Grace Lau-a, manager of community financial services for MACA.
She also said that while the first meeting was geared to familiarize members of the panel with the formula and processes, the next two meetings – set for the end of February and April – will hopefully see proposed solutions fleshed out for consideration.
“Implementation depends on the budgeting cycle,” Lau-a said. “There needs to be an appetite in the legislature to look at increasing funding for communities. It’s difficult to make any changes if the size of the pot remains the same.”
This last is something Cassidy agrees with, and he said was a hot topic of discussion at the first panel meeting.
“I think the communities understand that we’re going to be fighting against each other for MACA money,” he said. “But that’s not beneficial to anyone, in the end.”
But with the March 1 deadline set by town council’s letter to MACA threatening to withdraw services from surrounding communities if the $300,000 a year was not returned swiftly approaching, the overall formula isn’t the only issue facing mayor and council.
Lau-a said a drop in population played the most important role in the decrease in funding, although the balance of the three variables isn’t a stable thing.
“It’s difficult to say how much one weighs over the other,” she told The Hub.
“Population is a major factor. Infrastructure does have an impact, but probably not as big as population.”
“I predict that (the panel discussions) will see the formula altered to be more fair to all communities and be reflective of their needs, not just their size,” said Cassidy.
“We have a very strong argument to get us put back to the levels we were once at. Maybe MACA needs to dedicate more money to this.”