'Softer approach' to rural mergers set by Gallant Liberals

New Brunswick's Liberal government has quietly transformed the process for creating municipal governments in rural areas, with a new requirement that existing towns and villages be part of any merger proposal.

Rural residents who want to merge local service districts into a rural community — a municipal structure with an elected mayor and council — must at least try to absorb one existing municipality. Previously, a number of LSDs could merge on their own.

The little-noticed change in policy was announced in last year's provincial budget but did not get much attention at the time.

But it is bringing the local government reform process closer to the goals of the Finn report, a major study on the issue released in 2008. It was quickly abandoned by the Liberal government of the day to avoid controversy.

Finn report goals

The document advocated forced mergers of existing municipalities with LSDs. The current Liberal government is opting to merely encourage the process.

"It's a softer approach to meet the underlying goal of Finn," said Chris Melvin, the mayor of the rural community of Hanwell, which incorporated under the old rules in 2014.

"My interpretation is the goal of Finn is to eliminate local service districts and help smaller municipalities who are struggling financially so the province can step away from municipal issues."

My interpretation is the goal of Finn is to eliminate local service districts and help smaller municipalities who are struggling financially.- Chris Melvin, Hanwell mayor

The province allows residents of unincorporated local service districts, which lack elected councils or control over their services, to petition the province for a study on amalgamating into a municipality. Any merger is subject to approval by residents in a plebiscite.

But in last year's budget, then-finance minister Roger Melanson said that "in order to ensure that municipalities become more sustainable," the province would require future amalgamations to meet "the criteria for viability set out in the Finn report."

Any potential municipality has to have at least 3,000 people and a potential tax base of at least $200 million. Proponents must try to include at least one municipality in the new entity because, in many cases, that's the only way to reach those thresholds.

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Local Government Minister Serge Rousselle wasn't available for an interview on the issue.

Stanley-area study

Advocates of a new rural community to the north and east of Fredericton were encouraged to approach the Village of Stanley to become part of a merger study. The village is participating.

You have something to start with.- Mark Foreman, Stanley mayor

Stanley Mayor Mark Foreman hasn't taken a position for or against the village merging with the adjacent local service districts until the study is done, but he says there would be advantages to a new rural municipality absorbing an existing village.

"You have basic infrastructure already in place. You have an administration. You have a budget process. You have something to start with."

It's also in the village's interest to consider joining in because it expands its population and tax base," Foreman said. Otherwise, "we'd be the hole in the middle of the whole area. That could create problems in itself."

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Many small existing municipalities are below the Finn report's threshold for viability, so nudging them to merge with the local service districts eliminates that problem as well, Melvin said.

"I think the underlying purpose of that is to try to to capture some of those smaller municipalities that may be having trouble financially," he said.

Stanley's population was 419 people in the 2011 census, far below the threshold of 3,000 people.

While proponents of district mergers must try to bring one existing municipality into the proposal, the government will grant an exemption if none is willing to join, as long as the districts meet the population and tax base criteria on their own.

York County proposal

That's what happened in York County, where five local service districts to the west of Fredericton are looking at creating a rural community.

"There is no municipality that currently is somewhat of a hub for the residents of the area," said Debbie Peck, who is leading the effort. "There is no municipality actually in our project boundaries."

The proposed new municipality would take in the local districts of Douglas, Keswick Ridge and Kingsclear as well as parts of the Bright and Queensbury districts.

Provincial officials approached the rural community of Hanwell, the City of Fredericton, and the villages of Millville and Stanley to see if they were willing to join the York proposal, but they all took a pass.

The province, however, allowed the proposal to go forward because both the population, around 10,000, and the tax base, about $750 million, were well above the minimum threshold.

The York proposal is now in the second phrase, a feasibility study. Peck hopes it can be put to a plebiscite this fall.