WHEREAS the Government of Alberta has legislated intermunicipal collaboration frameworks (ICFs) in part 17.2 of the Municipal Government Act (MGA); and
WHEREAS ICFs are intended to support collaboration between bordering municipalities to ensure shared planning, delivery, and funding of inter-municipal services; and
WHEREAS municipalities that cannot create an ICF by the required date must refer matters of disagreement to an arbitrator; and
WHEREAS the scope and definition of municipal services are not clearly defined within the MGA leading to signifncant utilization of arbitrators; and
WHEREAS municipalities that reported difficulties and, in turn, unfair arbitration rulings related to the ICF process attributed unsatisfactory outcomes to the ambiguities associated with the scope of services and quantifying verifiable service costs; and
WHEREAS arbitrators do not have the appropriate data and, in some cases, the appropriate knowledge base regarding municipal governance to make informed decisions concerning ICF rulings; and
WHEREAS arbitration rulings can have unintended, detrimental financial impacts on municipalities hindering their operations and services to ratepayers;
THEREFORE, BE IT RESOLVED that the Rural Municipalities of Alberta (RMA) request the Government of Alberta amend the Municipal Government Act to define “core municipal services” for the purpose of intermunicipal collaboration frameworks and mandate that municipalities present verifiable costs to justify cost sharing for the aforementioned defined core municipal services;
FURTHER BE IT RESOLVED that the RMA request that the Government of Alberta ensure that members of a growth management board are not required to enter into an intermunicipal collaboration framework with each other.
RMA has no active resolutions directly related to this issue.
Alberta Municipal Affairs
The implementation of intermunicipal collaboration framework (ICF) requirements has been broadly successful in the large majority of cases, as evidenced by 99 per cent of municipalities finalizing agreements on ICFs by the legislated deadline.
The Municipal Government Act provisions governing ICFs have been designed to streamline the ICF process and increase flexibility and creativity regarding how those services are managed and funded to meet the unique needs of each partnership.
Municipal Affairs intends to review of the ICF legislation, processes, and procedures ‒ with an initial focus on the arbitration process ‒ to identify any potential improvements to legislation and/or practices that may be appropriate. Engagement with municipal stakeholders – including the Rural Municipalities of Alberta and Alberta Municipalities – will be a key part of this review. The ministry expects the review to take place following completion of the ongoing judicial processes.
Municipal Affairs will continue to track suggestions and feedback.
While RMA agrees with the Government of Alberta’s response indicating that in most cases, the ICF process was successful, RMA members have identified significant gaps in the process that place rural municipalities at risk. While 99% of all ICFs may have been agreed upon without significant disagreement or the need for arbitration, approximately 10% of RMA members were involved in arbitrations. Additionally, according to a 2022 RMA member survey, over 32% of respondents indicated that they considered the service delivery costs they were required to incur due to ICFs as unfair, 31% considered the scope of services included in the ICF as unfair, and 25% agreed to terms that they were not comfortable to avoid the risk of arbitration.
These survey results indicate that although 99% of ICFs may have been routine on paper, in reality there were aspects of the process that led to rural municipalities agreeing to terms they were not necessarily comfortable with to avoid further costs and risks associated with arbitration.
One of the most common issues identified by RMA members is linked to this specific resolution, which is a lack of scope and clarity over what can be defined as a “service” for the purpose of ICF negotiations. RMA strongly believes that properly defining thresholds or indicators for how municipalities (and arbitrators) can define a service would further streamline the process, reduce conflict, and ensure that both parties come to agreement on commonly defined regional services.
In April 2023, the Minister of Municipal Affairs signed Ministerial Order No. MSD:024/23, which extends the mandatory ICF review period from five years to seven years, for one time only. According to a letter from the Minister, “this extension allows time for the legal appeals to be concluded, the ministry to engage with municipalities on potential legislative amendments to the ICF provisions, and municipal partners to work towards renewing their agreements.”
While this extension is a positive step and increases the likelihood that the process can be improved before mandatory renegotiations are required, RMA remains concerned that municipalities may execute early renegotiation clauses within some ICF agreements to attempt to exploit the current flaws in the process outlined in this resolution. Alberta Municipal Affairs has indicated that no review or changes to the ICF process will be considered until the conclusion of ICF legal appeals currently underway. This means that the current terms will remain in place indefinitely, which poses risks to municipalities.
This resolution is assigned a status of Intent Not Met, and RMA looks forward to advocating on this issue further when the ICF engagement commence.