Regional Service Delivery
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, Métis settlements, armed forces bases and private companies. A comparison of all the following options can be viewed here. These include: 1) options governed under the Municipal Government Act under the Department of Municipal Affairs, 2) options that are governed under other legislation from various provincial departments and 3) other options without any specific governing legislation.
The following options for regional service delivery may be used by municipalities and municipal authorities and are governed by the Municipal Government Act. These options include Regional Service Commissions, Municipally Controlled Corporations, and Intermunicipal Agreements.
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 regional commissions include:
- Administrative and assessment services,
- Emergency and Family & Community Support services,
- Economic development and housing services,
- Recreation and parks management services,
- Planning, transit, and airport services; and
- Water, wastewater, and solid waste management services.
Establishing a Commission. Regional services commissions are established under the authority of Part 15.1 of the Municipal Government Act. If two or more municipalities, First Nations Reserves, Métis Settlements, and/or armed forces bases want to provide services together, they can request that the provincial Cabinet approve a regulation to establish that service commission. The regulation includes the commission’s name, members, and the services the commission can provide. Any subsequent changes, including changing the name or type of service provided, as well as adding or removing members, must be made by amending the regulation.
Operation of Commissions. 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 municipalities or other members that create them. This means the service commissions can hire staff, administer their own payrolls, own property in their own name, and 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, which must be approved by the Minister of Municipal Affairs. Directors who represent a municipality must be a councillor of that municipality.
The intent of the commission is to provide services to Albertans at the lowest cost. Any financial surplus must be used to reduce costs and may not be distributed back to the member municipalities as earnings. Rates charged by commissions must be established by bylaw and based on a full-cost recovery rate model.
Municipally controlled corporations (MCCs) are for-profit corporations where a municipality (or group of municipalities) holds more than 50 per cent 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. Currently, municipalities must submit applications to establish new municipally controlled corporations to the Minister of Municipal Affairs for review and approval. However, unproclaimed provisions of the Modernized Municipal Government Act would allow municipalities to establish these for-profit corporations without the requirement for ministerial approval. New procedural and consultative requirements focused on accountability and transparency would be put in place to ensure the public has a meaningful opportunity to review new proposals for the corporations, and to provide input before final decisions are made. At this time, it is unknown when these new provisions would come into effect.
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.
For further questions or information regarding Regional Services Commissions, Municipally Controlled Corporations, or Intermunicipal Agreements, please contact the Municipal Services Branch toll-free at 310-0000, and then dial 780-427-2225, or by email by at email@example.com
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.
The Alberta 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. For further information on cooperatives, visit Service Alberta’s web page on 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. For further information, contact Alberta Agriculture.
The Alberta 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. For further information on partnerships, visit Service Alberta’s web page on partnerships.
The Alberta 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. For further information about incorporation as a non-profit ‘Part 9’ company, visit Service Alberta’s web page on non-profit companies.
The Alberta 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. For further information about incorporation as a society visit the Service Alberta web page on societies.
It is also possible to establish an agricultural-specific society under the Agricultural Societies Act. For further information, visit Alberta Agriculture’s web page on agricultural societies.
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 Alberta Infrastructure’s web page on public private partnerships and the P3 Framework & Guideline document.