WHEREAS the Municipal Government Act, RSA, Chapter M-26, sets out the process for annexation of land when one municipality, the initiating municipality, seeks to annex/gain lands from an adjacent municipality (affected municipality); and

WHEREAS this process contemplates mutual cooperation, mediation and good faith negotiations in order to reach general agreement on the proposed annexation; and

WHEREAS in a case where there is no mutual cooperation huge costs can be incurred by the involved municipalities by way of studies to validate, substantiate or refute the annexation application and by way of legal counsel and experts to represent the municipalities at the Municipal Government Board hearing;

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties urge the provincial government to re-assess the annexation process and make provisions to encourage good faith negotiations by having the initiating municipality pay for all costs incurred by all involved municipalities in an annexation application.

In cases of annexation, it is usually an urban municipality that initiates the process and seeks to annex lands from an adjacent rural municipality. The initiating municipality must provide studies such as growth, fiscal impact and other relevant documentation to substantiate its annexation request.  The rural municipality usually recognizes the urban municipality’s needs for growth and additional lands.

Both the initiating municipality and the affected municipality involved in the proposed annexation are expected to meet, discuss and negotiate in good faith the terms of the proposed annexation that includes the size of the area to be annexed and subsequent compensation.

While the affected municipality usually receives some form of compensation for loss of lands in an annexation application, this is a short term benefit.  The initiating municipality ultimately gains land in an annexation application – a perpetual, long-lasting benefit.

In such cases where there is no agreement on the proposed annexation by the involved municipalities, the municipalities must defend their positions and incur costs for studies and legal fees for a contested application to the Municipal Government Board.  

By having the initiating municipality incur all costs for an annexation application, there is an incentive for the initiating municipality to present a reasonable annexation application and work cooperatively with the affected municipality, to reach a mutual agreement on the annexation application and terms of agreement.

Resolution 1-09S: THEREFORE BE IT RESOLVED that the AAMDC urge the Province of Alberta to change the following sections of the Municipal Government Act (Revised Statues of Alberta 2000, Chapter M-26):
(1) Add a subsection (3) to Section 117 (Direct negotiations on Annexation), which would read:  “If the application for annexation is deemed to be frivolous and/or vexatious by the Municipal Government Board, no further action shall be taken to proceed with the application under Sections 118 to 121 of the Municipal Government Act”.
(2) Change the wording of Section 122(2) (Notice of Hearing and Costs) to read: “The Municipal Government Board shall (a change from may) determine the costs of and incidental to a hearing and decide by whom and to whom the costs are to be paid.  This process is mandatory in those applications under Section 117(3) that are determined to be frivolous and/or vexatious”.
(3) Add a Subsection (a) to Section 690 (4) (Intermunicipal Disputes), which would read: “If a notice of appeal is deemed to be frivolous and/or vexatious by the Municipal Government Board, no further action shall be taken to proceed with the appeal under Sections 690 and 691 of the Municipal Government Act”.
(4) Add a Subsection (3) to Section 691 (Board Hearing) which would read:
“The Municipal Government Board shall determine the costs of and incidental to an appeal application, to be assessed to the Appellant that are determined to be frivolous and/or vexatious.”

Municipal Affairs:
Municipal Affairs will be undertaking a staged comprehensive review of the Municipal Government Act and will take this recommendation into consideration when conducting the review.

The Government of Alberta has taken the issue into consideration for future MGA reviews, and the AAMDC, through the recommendations for changes to Part 17, has re-submitted this issue to Municipal Affairs for consideration as an MGA begins in 2012