Regional service delivery

Overview

In Alberta, there are many regional service delivery options. Regional service delivery is the provision of one or more types of public service and allows for municipal authorities and other entities to use their collective resources to create efficiencies in service delivery. Typically the aim of regional service delivery is to utilize economies of scale and deliver services at a lower cost.

Parties that may choose to work together to deliver services regionally include:

• municipalities (cities, towns, villages, summer villages, municipal districts and/or specialized municipalities)
• improvement districts and special areas
• First Nation reserves
• Metis settlements
• armed forces bases
• private companies

Options for the corporate structure and governance of regional service delivery entities include:

• options governed under the Municipal Government Act
• options governed under other legislation such as the Business Corporations Act, Companies Act, Co-operatives Act, and Societies Act
• other options without any specific governing legislation

Options governed by the Municipal Government Act

The following options for regional service delivery may be used by municipalities and municipal authorities and are governed by the Municipal Government Act (MGA). These options include:

• Regional Service Commissions
• Municipally Controlled Corporations
• Intermunicipal Agreements

Regional Service Commissions

Regional Service Commissions (RSCs) allow Alberta municipalities to work collaboratively with other municipalities to deliver effective and accessible services that are responsive to the needs of their communities. Types of municipal services that can be provided through RSCs include:

• administrative and assessment services
• emergency management and fire services
• economic development services
• planning services
• water, wastewater, and solid waste management services

Establishing a commission

Regional services commissions are established under the authority of Part 15.1 of the MGA. If two or more municipalities, First Nations Reserves, Metis Settlements, and/or armed forces bases agree to provide services together, they can establish an RSC through the passing of a council or band resolution.

The Minister of Municipal Affairs must be notified within 60 days of the resolutions being passed. Notification to the Minister includes copies of resolutions from all member authorities, the RSC’s office location, and contact information.

Municipal authorities wishing to establish a RSC must specify within their resolutions:

• the name of the RSC
• the names of the members
• the first board of directors
• the first chair of the commission

The RSC is formally established once the ministerial order listing the names of all RSCs in Alberta is updated to include the new commission.

Proposed resolutions for new RSCs must be advertised in accordance with Section 606 of the MGA before they are passed.

This includes the:

• proposed name of the RSC
• proposed member municipal authorities
• proposed first board of directors
• first chair

Municipal authorities may complete further public engagement as warranted. For example, the public may be interested to know about the proposed services to be provided by the commission.

Municipal authorities should consult with Municipal Affairs prior to bringing forward resolutions, to confirm that the proposed RSC name complies with applicable naming conventions and does not duplicate an existing RSC name.

Operation of commissions

The intent of the commission is to provide services to Albertans at the lowest cost and operate on a non-profit, full cost-recovery basis. Commissions are prohibited from operating with the intention of making a profit and any financial surplus may not be distributed back to the member municipalities as dividends or earnings. Rates charged by commissions must be established by bylaw.

Services are provided on a regional basis to members of the commission. Members do not have to be adjacent to one another to form a regional services commission. If the Minister approves, the commission can also provide service to other customers who are not members of the commission.

Commissions have their own distinct legal status separate from the municipal authorities that create them. This means the service commissions can:

• hire staff
• administer their own payrolls
• own property in their own name
• raise capital

Like municipalities, commissions have natural person powers and can enter into contracts, negotiate easements and undertake other such agreements. The commission is run by a board of directors who are appointed according to the commission’s board appointments bylaw.

Municipally Controlled Corporations

Municipally controlled corporations (MCCs) are for-profit corporations where a municipality (or group of municipalities) holds more than 50% of the votes in electing directors of the corporation. A controlled corporation may be formed to provide facilities or municipal services such as water and waste management, electricity, and gas distribution. Controlled corporations are similar to other privately owned business corporations, but must comply with specific requirements under the Municipal Government Act and the Control of Corporations Regulation. Although municipalities maintain the controlling interest in these corporations, day-to-day operations occur at arm’s length.

Establishing and operating an MCC

Previously, ministerial approval was required before a municipality could establish or obtain control of an MCC, but now the decision resides with municipal council through passage of a council resolution. Council must consider factors such as whether the MCC meets a municipal purpose and must ensure it will provide a service or benefit to residents, including any profit.

A fact sheet summarizing the legislative changes to the establishment and operation of a MCC can be found on the Open Government Portal.

Intermunicipal agreements

The Municipal Government Act provides natural person powers for municipalities to enter into any contractual agreements. Municipalities may enter into agreements for such areas as administration, cost or tax sharing, development plans, emergency services, facilities, planning recreation and service sharing. The provincial government does not have any specific role in facilitating these agreements, although municipalities can always access the normal provincial supports available to them, such as advisory or dispute resolution services. Intermunicipal agreements are generally meant to achieve a specific and narrow objective and allow greater municipal autonomy than other forms of regional governance. These agreements can assist municipalities with achieving greater economies of scale and promote regional cooperation.

Options under other legislation

The following options for service delivery are governed by legislation overseen by other provincial departments. The department of Municipal Affairs has included the following information and links for awareness purposes only, as they are delivery options that municipalities could potentially use for municipal services. These options include cooperatives, partnerships, Part 9 companies, and Societies. For authoritative information and details about each of the options, contact the department listed for each option through the links provided in the options below.

Cooperatives

The Cooperatives Act allows for incorporation of an enterprise or business jointly owned by an association of members who pool their resources to satisfy their common interests. See more information about cooperatives.

The Rural Utilities Act governs co-ops that have the goal of providing electricity, natural gas, water (primarily for domestic use), sewage disposal, and water (primarily for domestic use) and sewage disposal to members in a rural area. Co-ops that are incorporated under the Rural Utilities Act may not also be incorporated under the Cooperatives Act. See more information about rural utility programs.

Partnerships

The Partnerships Act allows two or more individuals or corporations to do business together as partners. All partners share in the profits and the risks or debts of the business. A limited partnership allows for a general partner that is usually liable for the debts of the business and a limited partner that is usually only liable for the amount of their contribution to the business. See more information about partnerships.

Part 9 companies

Part 9 of the Companies Act also allows for the incorporation of not-for-profit organizations, similar to a society. Part 9 companies can, however, engage in business activities. Profits from business activities may only be used for the purpose of promoting the objects of the organization and must not be paid to members. See more information about non-profit companies.

Societies

The Societies Act allows for the incorporation of not-for-profit organizations. Five or more persons may become incorporated for any benevolent, philanthropic, charitable, provident, scientific, artistic, literary, social, educational, agricultural, sporting or other useful purpose. A society may not carry on any trade or business activities. See more information about societies.

It is also possible to establish an agricultural-specific society under the Agricultural Societies Act. See more information about agricultural societies.

Other options

Public Private Partnerships (P3 or PPP)

While the Municipal Government Act does not specifically address Private Public Partnerships (contracts between a municipality and a private company), any actions a municipality takes in regards to a P3 must be in accordance with any relevant legislation. A P3 is a non-traditional way for government to create capital assets (such as roads, schools, and other types of government facilities). A P3 has only one contractor that designs, builds, finances, maintains, and in some cases operates, a public asset. For a P3 project, the private contractor provides some or all of the financing for the project, and designs and builds the project (often providing operations and maintenance for the project). The private contractor then receives payments over an extended period of time, subject to deductions for failing to meet contractually defined performance standards. The interplay between design, construction, operations, and maintenance and performance creates an “extended warranty” over the term of the contract.

While there is no provincial department that oversees municipal P3s, an example of how the provincial government manages its own P3s can be viewed on the public-private partnerships web page and the P3 Framework and Guideline document.

Contact

Connect with the Municipal Capacity Building Branch:

Phone: 780-427-2225
Toll free: 310-0000 before the phone number (in Alberta)
Email: [email protected]

Address:
17th Floor Commerce Place
10155 102 Street
Edmonton, Alberta  T5J 4L4