AMHERST, N.S. -- A town councillor is under scrutiny after admitting to uttering a racist slur to staff at a pizza shop in a small Nova Scotia community.

Amherst Mayor Robert Small said Coun. George Baker has admitted to saying "I'm not your n-----r" to workers at Bambino's Pizzeria.

"Whoever it was that was working, they were giving him a hard time, razzing him ... and he turned around and made his comment. From there it escalated," said Small in a phone interview on Tuesday.

"I can't believe he said it. In this day and age, you don't say those things."

Small said news that Baker used the racial slur spread throughout the town of roughly 9,700 and a letter of complaint was sent by a community member last week asking council to investigate the incident.

He said council determined at an emergency meeting Monday that it does not have the authority to deal with allegations of misconduct by council members, so it has directed staff to revise its code of conduct policy so it does have such power.

"This issue has apparently never been dealt with before in Nova Scotia, so this may be an opportunity to not only fix our policies, but policies of other municipal government so that it can address it when or if something like this happens again," said Small, adding they sought guidance from legal experts.

Small said the Baker matter has been referred to the Amherst Board of Police Commissioners, a civil body that Baker sits on as a council appointee that has a different code of conduct than council.

He said Baker, who did not immediately return an email request for comment Tuesday, has apologized to staff at the pizzeria and to the black community.

Town council, which had met in private July 22 to discuss this "persistent rumour in the community," held Monday's meeting in part to discuss a letter from Hal Davidson, a member of the local black community.

Davidson had requested "that this whole matter be immediately and independently reviewed with relevant corrective actions given Mr. Baker's statements and related activities."

He also requested the "very same steps be taken in regard to the inaction on the part of Mayor and Council," according to a memo from the town's chief administrative officer, George Herrett.