The Government of the Northwest Territories is taking governing powers away from the Hamlet of Fort McPherson and placing the community under administrative management, it announced Tuesday.

That means the hamlet's mayor and council no longer have power to oversee the day-to-day running of the community. The territorial government has given that job to a municipal administrator.

"I had a meeting with some members of the community explaining why it needs to be done," said Robert C. McLeod, minister of Municipal and Community Affairs.

"And I think for the most part as much as they wanted to administer their own utilities, some of them felt that maybe this is the right decision right now."

The RCMP is investigating the hamlet's finances, but McLeod says MACA made the decision after the hamlet racked up a $2 million deficit.

He says the community could be under administrative management for a year or two, and after that a new municipal election would be held.