Baddeck's finances back on track after discovering deficits incurred by ex-CAO

The Village of Baddeck in Cape Breton experienced deficits totalling nearly $228,000 for the two years that led up to the firing of the chief administrative officer in 2021.

That's more than a quarter of one year's revenues, according to financial statements compiled more than two years after the fact.

In 2020 and 2021, the village's bills went unpaid and taxes and utility fees went uncollected.

Jennifer MacDonald, chair of the elected commission that runs the village, said Wednesday it was a challenge to create financial statements from scratch.

"They're as complete as the accounting firm feels they can be completed to, to the best of our and their abilities, so we're comfortable with them as they stand," she said.

The documents were recently posted to the village's website, which was built from scratch after the CAO was let go and charged with fraud.

Checks and balances

MacDonald said the deficits were incurred by the sewer and water utilities and outstanding invoices that weren't being collected, but the finances are getting back on track.

"Part of that, I think, is attributed to the fact that the utilities were just costing more than they were billing, and there's other pieces in there, but we're working to rectify some of those things," she said. 

"We're certainly hoping to have a balanced budget going forward, and we feel like that's within our capacity."

The village commission has since hiked sewer and water rates, and staff are in the process of collecting some of the outstanding amounts owed to the village.

MacDonald said they have also put checks and balances in place to make sure the books are up-to-date and accurate.

"I do think that we're headed in the right direction, both fiscally and in terms of managing our operations as well, and being a good steward of the public entity that is the village."

In addition to financial statements, the website now has agendas and minutes of commission meetings, commissioner and staff expenses, a newsletter and more — all part of running the village "in a transparent and accountable way," said MacDonald.

Strategic plan focuses on utilities, finances

She also said the commission has created a strategic plan that focuses mostly on improving the sewer and water utilities and implementing sound financial policies and controls.

Aside from the heavy emphasis on improved governance, the plan also mentions managing public spaces, such as the wharf and the boardwalk.

This week, the province announced it would cover half the $444,000 cost of water and wastewater upgrades in Baddeck, which MacDonald called "exciting."

She said the commission has applied for funding to improve the boardwalk and is hoping for positive news this summer.

Case of ex-CAO goes to restorative justice

Former CAO Megan Cooper was responsible for the badly kept books and was initially charged with defrauding the village of more than $28,000, but pleaded guilty to theft of $19,500.

She was to be sentenced April 30, but the court referred her case to restorative justice.

MacDonald said Baddeck's voice will be heard in the court process.

"The village is certainly co-operating as best we can," she said.

Cooper is now expected to be sentenced in August.