The Town of Oromocto has agreed to payment terms with the Oromocto First Nation after threatening to cancel the reserve's municipal services.
The town is owed more than $450,000 for water, sewage, garbage pickup, policing, fire and snow-removal services delivered to the First Nation.
On Nov. 23, the town informed the First Nation that if the bills weren't settled soon, the services to the reserve — which lies within the municipal boundaries — could be cut without further warning.
The First Nation council met Wednesday to discuss the situation and is now offering to pay the town $160,000.
Indian Affairs and Northern Canada will be paying the remainder owed, said Oromocto Mayor Fay Tidd.
In the past, funding for the First Nation's municipal services was transferred directly from the federal government to the Town of Oromocto, but that deal was changed in 2005.
The money has since been delivered directly to the First Nation, which was supposed to pay the town directly for the services.
The bills, however, were never paid and accumulated to $450,000.
The problem resulted from an accounting error by the federal department, said Mayor Tidd.
The money allotted to the reserve by the federal department was miscoded and spent on other projects, said First Nation officials.
From now on the federal department will again pay the town directly for the services, Tidd said.