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Preamble:
WHEREAS the Municipal Government Act (MGA) defines the process for dissolution, which focuses solely on the municipality that may dissolve and not the absorbing municipality; and
WHEREAS the Municipal Affairs and Housing Statutes Amendment Act (Bill 28) amends the MGA to allow the Minister to override a public vote on dissolution following a viability review by recommending to Cabinet that a municipality dissolve, or that it remain a municipality while meeting viability directives, regardless of the public vote results; and
WHEREAS currently, financial support for absorbing municipalities is limited to capped funding available through the Alberta Community Partnership (ACP) grant funding streams, as well as some limited taxation tools and grandfathering of grant allocations; and
WHEREAS small villages undergoing viability reviews are typically set very high mill rates; and
WHEREAS significant issues with the quality and comprehensiveness of infrastructure audits conducted during the viability review process have been raised; and
WHEREAS RMA issued a post-dissolution impacts study, including four case studies.
Operative Clause:
THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta (RMA) advocate that the Government of Alberta (GOA) enhance Alberta Community Partnership (ACP) funding for municipalities absorbing dissolved municipalities to reflect audited infrastructure needs, costs of replacing or repairing inherited assets that are beyond their useful life, and for other emergent post-dissolution costs;
FURTHER BE IT RESOLVED that the GOA review and amend the municipal viability review and dissolution process to ensure the financial, operational, and governance impacts on absorbing municipalities are fully considered through improved due diligence, standardized infrastructure assessments, enhanced access to information, and adequate provincial support;
FURTHER BE IT RESOLVED that, for the duration of any municipal viability review, the GOA appoint an Official Administrator, in consultation with the potential absorbing municipality, to ensure governance stability, administrative oversight, and continuity;
FURTHER BE IT RESOLVED that the GOA implement and adequately fund standardized infrastructure audit requirements that comprehensively assess infrastructure against the standards of the absorbing municipality prior to dissolution.
Member Background:
Alberta’s current municipal viability review and dissolution process places significant emphasis on the municipality under review, with limited consideration given to the financial, operational, and governance impacts on the municipality that would ultimately absorb the dissolved community. Publicly available guidance and the viability review workbook focus primarily on outcomes for the dissolving municipality, while providing little information or support to help absorbing municipalities assess the full implications of dissolution. Many workbook questions require information that is not available to absorbing municipalities or ask them to make assumptions and commitments before sufficient due diligence of the viability review and dissolution process has been completed. Additionally, the lack of data shared by the municipality under review does not allow the potential absorbing municipality to fully understand risks and opportunities when answering the workbook questions.
While the ACP program provides some financial assistance to absorbing municipalities, current funding and processes do not adequately reflect the full costs and risks associated with municipal dissolution. Infrastructure deficiencies, administrative transition requirements, and unforeseen post-dissolution issues can create significant financial pressures for absorbing municipalities. Strengthening provincial funding, improving infrastructure audit standards, and revising the viability review process to better support informed decision-making would help ensure municipal dissolutions are fair, transparent, and sustainable for all affected municipalities.
Municipalities that have gone through dissolutions have identified significant concerns with the quality, scope, and reliability of infrastructure audits conducted during municipal viability reviews. Limited funding, inconsistent procurement practices, and reliance on incomplete municipal information have resulted in audits that fail to identify critical infrastructure deficiencies and liabilities before dissolution. While Municipal Affairs provides minimum audit requirements, there are insufficient standards for audit rigor and long-term assessment, leaving absorbing municipalities vulnerable to unexpected costs and commitments. Strengthening infrastructure audit requirements would improve due diligence and ensure municipalities have accurate information to make informed decisions during the dissolution process.
RMA Background:
1-23S: Enhanced Support for Receiving Municipalities in Dissolutions
THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta advocate that the Government of Alberta review the total financial compensation, timelines, process, and other support provided to receiving municipalities to better mitigate and manage the immediate and ongoing impacts resulting from the dissolution or amalgamation process.
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