The Town of Shelburne, N.S., is on the verge of dissolving because it has been struggling financially for several years.

"Either we hack and slash, or we apply to dissolve," said Mayor Karen Mattatall. "The taxpayers in town can't afford additional tax increases."

The town has just under 1,700 residents.

Mattatall said town council now has to make some difficult decisions. She said cutting services will only "delay the inevitable."

The town has been pinning its hopes on consolidation talks with its municipal neighbours, but there have only been a couple of preliminary sessions.

Karen Mattatall is the mayor of the Town of Shelburne. (CBC)

The process is now in limbo because the Municipality of the District of Shelburne is worried about the impact Shelburne's financial position would have on its taxpayers.

In a press release, Warden Penny Smith said the province needs to help pay for infrastructure challenges facing the town, such as flooding problems on Dock Street and aging water and sewer lines. She said if there was provincial support, consolidation talks could continue.

Shelburne town council is expected to make a decision about dissolution by the end of March, when a new budget is supposed to be in place.

If the town dissolved, the Utility and Review Board would be responsible for determining who would provide municipal governance.

"I've always referred to dissolution as a forced marriage where consolidation, unification or whatever is similar, to a marriage of willing partners," Mattatall said.

Lockeport Mayor George Harding says the town is interested in taking part in consolidation talks with the Town of Shelburne and the Municipality of the District of Shelburne. (Michael Gorman/CBC)

The Town of Lockeport is nervously watching this situation unfold.

Mayor George Harding said the town is in better financial shape than the Town of Shelburne, but it has agreements for shared services with both the town and the district, so it was interested in taking part in consolidation talks.

"What are the possibilities for eastern Shelburne County and what opportunities would be there for all three municipalities?" said Harding.

Harding pointed out Lockeport would be left out of the dissolution process.

"Exploring consolidation is far more favourable," he said.

Krista Higdon, a spokesperson for the Department of Municipal Affairs, said if a municipality is considering consolidation, it would be happy to meet to discuss what support could be provided.

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