Sask. gov’t to put RM under the microscope

A dispute has developed in the Rural Municipality of McKillop between agricultural landowners and cottage owners

The Saskatchewan government last week ordered a full inspection of the Rural Municipality of McKillop after receiving numerous complaints from taxpayers.

The latest was an unexpected tax hike in mid-August after the RM discovered it was short about $1 million.

That news came after the administrator assured council earlier in the year that a tax increase was likely unnecessary, said Reeve Howard Arndt.

The administrator is no longer with the RM.

However, according to cottage owners in the approximately 20 organized and unorganized hamlets and resort communities along the east shore of Last Mountain Lake, they are paying the brunt of the hike.

Garry Dixon, a former RM councillor who is president of the organized hamlet of North Colesdale and the Provincial Association of Resort Communities of Saskatchewan, said his taxes will go up from $1,500 to $4,000, not including education tax or service fees.

“The (cottage) ratepayers have gone up about 87 percent, that’s just the mill rate, and the farmers went up five percent,” he said.

That added fuel to a growing dispute between agricultural landowners and the cottage owners.

Arndt, an acreage owner in the RM for more than 20 years, said his own taxes have doubled. He said the increase did hit primarily acreages and resort properties because of how the tax is calculated.

But he also said there have been increasing tensions between farmers and resort residents. He estimated there are about 500 permanent rural or farm residents and about 1,300 urban residents in the hamlets. Statistics Canada puts the RM population at about 725, leaving him to conclude that about 200 of the cottage owners live in the RM all the time.

“There’s been a lot of friction between the rural portion of the RM and the urban portion,” Arndt said. “It’s been how to spend tax dollars, where the tax dollars are coming from, where they’re being spent and then we get into other friction especially at seeding and harvest. We’ve got big equipment on the roads and people are trying to get to their cottages and it becomes a bit of a tempest in a teapot.

“Then you get the other side from the farmers: ‘look at all these beach people that are rude and ignorant and don’t understand farming and we have to make a living.’ ”

Arndt said several things conspired to put the municipality in a tough spot, including a developer that went under and left the RM with significant tax arrears and a water treatment plant to fix and operate. The RM also had difficulty recruiting a qualified administrator, leading to what he calls “a lack of continuity”.

Then, council learned that a dedicated reserve fund had been accessed without its authorization.

Municipalities aren’t allowed to run deficits, and that led to the tax hike.

Government Relations Minister Warren Kaeding appointed Carol Ingham, a former administrator and senior ministry adviser, to inspect the governance and administration of the RM and report by Sept. 15.

The inspection will look at general operations and focus on the status of ratepayer petitions submitted to council, legal actions taken by or against the RM, and provide a financial “synopsis” of the municipality, he said.

One petition called for a full financial audit.

The Court of Queen’s Bench recently ruled two others should go ahead as referendum questions. One calls for the RM division boundaries to be redrawn to split the population more evenly among the six boundaries. The other asked for a vote on giving resort communities self-government and control over administration, taxation, zoning and bylaws while leaving the division boundaries the same.

Arndt said he has been clear since January that the latter two questions will be on the Oct. 24 election ballot.

Kaeding wouldn’t speculate on what the government might do depending on what Ingham finds.

Arndt said the council welcomes the inspection because members are confident they acted properly.

“I’m not particularly worried,” he said.

Dixon and others also welcome the inspection, but the time frame and potential next steps are concerning.

Dixon added McKillop isn’t alone in the tensions it sees between residents.

“We have over 100 members throughout the province and we get contentious situations handed to us that are very similar to this,” Dixon said of PARCS.

He said hamlets receive a percentage of the taxes paid to the RM but have to fight to find out the exact amounts.

“We’re not accusing anybody but it just seems like it’s an ongoing situation,” he said. “I know other hamlets have faced the same thing. It should be simple bookkeeping.”

And he also noted that complaints about RM issues to the provincial ombudsman are significant.

Saskatchewan Association of Rural Municipalities president Ray Orb agreed the growth of resort areas has caused tension.

“I think there is some pressure around every resort community but not as severe as McKillop,” he said.

Some communities, such as Katepwa Beach, have formed their own districts with their own councils and administration.

Orb said separating agricultural and resort interests may be in the best interests of some RMs.

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