Municipal indicator report presents positive snapshot of Town of Amherst

A recently released provincial report paints the Town of Amherst in a positive financial light.

The 2016-17 Municipal Indicators report, which examines financial, demographic and administrative indicators in order to provide insight into the financial condition and health of all Nova Scotia communities, highlighted Amherst's successes in the areas of liquidity, prudent debt levels, strong operating reserves, effective tax collection and asset management.

It also provided the town with comments on possible areas for improvement in the areas of building capital reserves and in budget accuracy, although it noted the town has not recorded any deficit in the past five years.

“These are very good results,” CAO Greg Herrett said on May 10. “I want to congratulate our finance staff and management team for them, while also thanking council for its support in implementing the strategies that have led to them.”

The Department of Municipal Affairs partnered with the Union of Nova Scotia Municipalities and the Association of Municipal Administrators to develop the indicators. The reports are intended to offer an enhanced understanding on the financial matters, administration of the municipality and characteristics of a community. The combined set of statistics provides an overall snapshot of a municipality. The reports also include the technical definitions and thresholds for each financial indicator.

The 13 indicators in the report are color coded to indicate overall risk level (low risk is green, moderate risk is yellow and high risk is red).

As it has in the past, the Town of Amherst scored well in the most recent report. It received 11 green indicators, one yellow and one red indicator. The report for the Town of Amherst, as well as other Nova Scotia municipalities, can be found at https://novascotia.ca/dma/finance/indicators.asp.

“The Town of Amherst prides itself in its long-term financial and capital investment planning processes,” Herrett said. “The town maintains and updates 10-year operating projections at least twice per year. It also prepares updates and maintains a 10-year capital investment plan.

“These planning and analysis tools allow town council and staff to identify, understand and plan for the operating, infrastructure and financing needs of the town years in advance by taking advantage of senior government funding when it becomes available. These excellent scores validate and highlight the use of these tools and the willingness of council and staff to apply them.”

Herrett noted the town continues to have among the best tax collection results in the province, with only 4.3% of annual taxes outstanding.

Healthy operating reserves also allow the town to have the resources to plan for future sustainability while allowing the flexibility to deal with unforeseen circumstances as they arise, he added.

Town staff regularly compares Amherst’s results with those of other larger towns in the province. While results for Truro are not available, the report scores Amherst favorably with the towns of Bridgewater, New Glasgow and Yarmouth, the CAO said.

As an example, he pointed to the residential tax effort score - an indication of how much of a household's income is required to pay the average tax bill. In Amherst it was 3.4%, which is significantly lower than all of the aforementioned units.

The lone high risk (red) indicator in the report on Amherst was in the area of combined reserves.

Herrett said the town follows a strategy of planning for capital investment on a long-term basis, using current year resources (capital from revenue) and the gas tax as the major funding sources. When senior government infrastructure funding becomes available – as it did in the past year – capital investments are funded using a combination of that funding and a prudent amount of debit, with the term matching the useful life of the assets being put in place.

“Following this strategy, the town minimizes the use of the capital reserve. This has resulted in a red indicator for combined reserve levels, due mainly to a minimal capital reserve balance,” Herrett explained.

However, he said the “strategy is a sound one and has been implemented in an informed and intentional manner that has allowed for updated infrastructure at minimal cost to the town.”

The lone moderate risk (yellow) indicator on budget accuracy was an indication of a number of recent budget surpluses, the CAO said, adding “the surpluses resulted from, among other issues, a number of vacant staff positions that have now been filled.”