Financially troubled Village of Baddeck awaits word on its fate

The financially troubled Village of Baddeck is waiting for word on its fate after a Nova Scotia government deadline passed to straighten out its administration and finances.

Village officials were unable to complete all of the tasks ordered by Minister of Municipal Affairs John Lohr, but they are confident they have things under control.

"The ones that could be completed have been completed," said Sandy Hudson, the village's interim chief administrative officer. "Some of them, for instance the financial statements, there is a problem that there are no records, that our accountants can't put anything together, so they probably will just wind up doing a review of those years and ... until we have a financial statement for 12 months, they can't start that water rate study."

The Cape Breton village has been rocked by scandal since its former CAO, Megan Cooper, was fired and Maris Freimanis — who retired as CAO of Richmond County and was formerly with the Town of Port Hawkesbury — was brought in to run things on an interim basis.

He found financial records missing and discovered that audited financial statements required by the province had not been done.

Following an RCMP investigation, Cooper was charged with a single count of fraud and this week pleaded not guilty. A trial date has not been set yet.

Last year, the minister ordered the village to hire a new clerk/treasurer (similar to a chief administrative officer), a finance clerk and a public works supervisor.

He also ordered the village to submit plans on collecting taxes and sewer and water payments, a new water rate study and several years of audited financial statements — all by Jan. 3.

The village has sent a report to the minister noting they failed to produce two years of audited financial statements and the water rate study.

Missing and partial financial records

Hudson — who previously retired as CAO of Victoria County — said there are simply no financial records for the 2019-20 fiscal year and only partial records for the following year.

"It is a huge problem and it has been for the last two years, basically trying to reconstruct, [to] find out who paid what and who didn't pay what," he said.

After last year's annual general meeting, the village was forced to raise taxes and sewer rates and has been told it must raise water rates, but that requires a study and approval from the Nova Scotia Utility and Review Board.

Permanent manager sought

Financial statements are required for a UARB hearing, said Hudson, but with two years unable to be certified by auditors, accountants are preparing a less-intensive financial review that will be used to conduct the water rate study.

In the meantime, the village's elected commissioners are ready to hire a permanent manager.

They have conducted interviews and made a tentative offer, but don't want to finalize it until they hear from the province.

"As soon as we know what the future holds for our ministerial order status, then they'll go forward with that," Hudson said.

"We just don't think it's fair to bring somebody on now and then a new ministerial order comes out and we don't know what it's going to say."

Despite the setbacks, the commissioners are feeling good about the future, he said.

Sorting out revenue problems

There is money in the bank and the revenue problems have been sorted out.

"I think they're positive going forward," Hudson said. "We can do it. We've been here for 114 years. We can keep going."

In an email, the Department of Municipal Affairs said it is reviewing the latest report and will follow up with the village on next steps.