TOWN OF FAIRVIEW & MUNICIPAL DISTRICT OF FAIRVIEW NO. 136

REGIONAL GOVERNANCE STUDY

Final Report January 11, 2021

Prepared By:

1 Table of Contents LETTER OF TRANSMITTAL ...... 4 ACRONYMS ...... 5 EXECUTIVE SUMMARY ...... 6 1.0 SCOPE & METHODOLOGY ...... 8 1.1 BACKGROUND ...... 9 1.2 PROJECT PLAN ...... 10 1.3 STAKEHOLDER CONSULTATION ...... 11 Key Messages Manual ...... 11 Website ...... 11 Interviews ...... 12 Public Workshops ...... 12 2.0 STAKEHOLDER ENGAGEMENT ...... 13 2.1 GOVERNANCE ...... 14 2.2 ADMINISTRATION ...... 15 2.3 SERVICE DELIVERY ...... 16 2.4 EXTERNAL ANALYSIS ...... 18 Survey ...... 18 Workshops ...... 20 Establishing a Baseline ...... 20 3.0 SERVICE DELIVERY REVIEW...... 22 3.1 SERVICE DELIVERY ...... 23 3.2 GOVERNANCE & COMMITTEE APPOINTMENTS ...... 27 3.3 INTERNAL SERVICES: CURRENT MANAGEMENT AND REPORTING RESPONSIBILITIES ...... 27 3.4 CURRENT INTERMUNICIPAL AGREEMENTS ...... 31 4.0 FINANCIAL REVIEW ...... 35 4.1 MUNICIPAL FINANCES ...... 36 4.2 FINANCIAL OBSERVATIONS ...... 40 Property Taxes and Assessment Values ...... 40 Mill Rates ...... 41 Government Grants ...... 41 Investment Income ...... 42 Utility Operations ...... 42 User Fees and Charges ...... 43 Rental Revenue ...... 43 Fines and Penalties ...... 44 Regional Funding Transfers ...... 44 Transfers from Other Groups ...... 45 Other Revenue ...... 45 Salary and Employee Benefits ...... 45 Council Expenses ...... 46 Business and Training Expenses ...... 47 Professional Services ...... 48 Rentals and Leases ...... 48 Contracted Services ...... 49 Supplies and Materials ...... 50 Repairs and Maintenance ...... 51 Utilities ...... 51 Requisitions ...... 51 Regional Transfers ...... 52 Municipal Operating Grants ...... 53 Other Expenses ...... 53 Reserve Contributions ...... 54 Debt Repayment ...... 54 4.3 PROVINCIAL ASSESSMENT MODEL REVIEW ...... 55

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5.0 BENCHMARKING ...... 56 5.1 CENSUS DATA ...... 57 5.2 ECONOMIC OUTLOOK ...... 58 5.3 GOVERNANCE ACROSS CANADA ...... 59 5.4 ALBERTA LEGISLATION ...... 59 5.5 ALBERTA GOVERNMENT ...... 60 5.6 ALBERTA COMMUNITY PARTNERSHIP GRANT PROGRAM ...... 61 5.7 ALBERTA TRENDS ...... 62 2006 Lac La Biche/Lakeland County Amalgamation ...... 62 2014 Flagstaff Intermunicipal Partnership ...... 65 5.8 MUNICIPAL COMPARATORS ...... 66 5.9 CURENT COLLABORATIVE INITIATIVES & JOINT SERVICES ...... 74 6.0 GOVERNANCE MODELS ...... 76 7.0 VIABLE MUNICIPAL OPTIONS ...... 79 7.1 OPTION 1- STATUS QUO ...... 80 7.2 OPTION 2 – ENHANCED INTER-MUNICIPAL COLLABORATION ...... 81 7.3 OPTION 3 – AMALGAMATION ...... 84 8.0 CONCLUSIONS ...... 86 9.0 RECOMMENDATIONS ...... 89 SHORT-TERM RECOMMENDATIONS ...... 90 MID-TERM RECOMMENDATIONS: ...... 90 LONG-TERM RECOMMENDATIONS: ...... 92 10.0 CLOSING REMARKS ...... 94 11.0 REFERENCES ...... 96 12.0 APPENDICES ...... 98

Town of Fairview & M.D. of Fairview No. 136 Regional Governance Study 2020 FINAL REPORT 3 LETTER OF TRANSMITTAL

January 11, 2021

Mr. Daryl Greenhill Ms. Sandra Fox CAO CAO Town of Fairview Municipal District of Fairview No. 136 Box 730 Box 189 Fairview, AB T0H 1L0 Fairview, AB T0H 1L0

Re: Town of Fairview & MD of Fairview No.136 Regional Governance Study 2020

Dear Mr. Greenhill & Ms. Fox We are pleased to present the Town of Fairview and the Municipal District of Fairview Regional Governance Study Draft Report and recommendations. Over the past five months we have reviewed, assessed and developed a series of recommendations for the Town of Fairview and MD of Fairview to move forward as municipal leaders. This is achieved by building on enhanced regional governance collaboration through the exploration of viable governance restructuring and optimized alignment of service delivery balanced by strong fiscal best practices. Should you have any questions or require further clarification on any of our recommendations, please do not hesitate to contact us or request a video conference to go through the recommendations. We feel we have captured the intent and objectives of their request and invite comments on the attached report.

Respectfully,

Erica Thomas President, TSI

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ACRONYMS

ACP Alberta Community Partnership

AGM Annual General Meeting

AMA Alberta Municipal Affairs

CAO Chief Administrative Officer

FTMP Full-Time Municipal Positions

FCSS Family Community Support Services

IDP Intermunicipal Development Plan

ICF Intermunicipal Collaboration Framework

KCL KCL Consulting Inc.

K Thousand

M Million

MD Municipal District of Fairview

MGA Municipal Government Act

MSI Municipal Sustainability Initiative

RMA Rural Municipalities of Alberta

SWOT Strengths Weaknesses Opportunities & Threats

TOWN Town of Fairview

TSI Transitional Solutions Inc.

UCP United Conservative Party (Alberta)

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EXECUTIVE SUMMARY

The Town of Fairview and MD of Fairview No. 136 awarded the Regional Governance Study project to Transitional Solutions Inc., with project work commencing July 2020.

TSI’s methodology was a well-defined four stage approach: (1) Project Initiation and Planning; (2) Research, Consultation and Stakeholder Engagement; (3) Analysis and Report Development and; (4) Final Project Report delivery. The scope of the project was clearly identified consisting of a thorough review of the current governance structures, service delivery, and financials. A complete review of all requested and supplied key documentation was also conducted, as was stakeholder engagement.

The extensive stakeholder engagement conducted both internally and externally revealed: • Many consider the Fairview Region to be one community notwithstanding the Town and MD both exist • There is more support for amalgamation from the urban side versus the rural side • Two municipal offices and two municipal administrations has led to some confusion amongst some residents and ratepayers • The majority of residents are satisfied with current service levels • Enhanced regionalization efforts are likely to result in a more efficient and effective municipal services delivery system

Working together is the most effective and efficient method for positive implementation, growth and improvement of the region’s current service delivery. The Service Delivery Review identified these major findings: • A high level of cooperation and collaboration already exists between the MD and the Town • There are many services duplicated by both municipalities • Both municipalities make significant committee appointments • Similar organizational structures exist in both municipalities • Thirteen intermunicipal agreements (bilateral and multilateral) already exist

A detailed financial analysis identified numerous areas for continuous improvement and collaborative opportunities. The financial review of both municipalities shows: • The amount of dollars budgeted for 2020 by account and department • Some general observations on various accounts and activities • There are some financial challenges on the horizon particularly as it relates to the provincial assessment model review

A benchmark comparison to was conducted to better understand the current municipal, provincial and federal temperatures in relation to regionalization. Highlights included in the benchmarking: • Census data showing a declining population • An economic outlook that paints a challenging future • How other regions across the country have addressed regional governance • Provincial grant support for municipalities is declining • What is occurring vis-à-vis dissolutions and amalgamations across the province • How the Town and MD stack up against comparator municipalities

After a look at various governance models shown on a continuum, consideration of three viable options of a regional approach to service delivery and governance is presented. The three models are: • each municipality operates and governs independently as per status quo; • enhanced municipal collaboration, or

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• amalgamation.

Some advantages and disadvantages of each are depicted along with some examples in other parts of the province.

Nineteen conclusions are identified from which 12 recommendations are provided. Each recommendation contains some rationale as to why the recommendation was made. The recommendations are broken down into short-term, medium-term, and long-term, so as to provide some context around how the actions stemming from each recommendation might be implemented. The short-term recommendations are considered to be the “low hanging fruit” resulting in some immediate wins while the medium-term and long- term recommendations will take more time. Notwithstanding, the most significant recommendation being made (Recommendation 10) is that an amalgamation review be undertaken.

As important as the recommendations are to this Regional Governance Review, faith and trust between the MD and Town is critical if a more efficient and effective governance model is to prevail. This will mean give and take on the part of both parties if the Fairview Region is to prosper and have a sustainable future for many decades to come.

Our Project Team has prepared a comprehensive report responding to the objectives, scope and deliverables required in your RFP. Through this report TSI believes we have fulfilled our understanding of your requirements.

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1.0 SCOPE & METHODOLOGY

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1.1 Background

Transitional Solutions Inc. (TSI) enjoyed the privilege of working with the Administration at the Town of Fairview and the MD of Fairview over the past number of months to complete the Regional Governance Study. This project was the result of the Town and MD’s desire to optimize their collective resources through collaboration to ensure the Region’s growth and long-term viability while ensuring effective and efficient service delivery to their collective ratepayers. To support these objectives, the Town of Fairview and Municipal District of Fairview issued a request for proposals in May 2020 and subsequently selected TSI as the successful proponent to lead the process starting in July 2020.

Since commencement of the study in July, we have interviewed, reviewed, gathered, assessed and developed a series of recommendations for consideration as it relates to regional collaboration and cooperation. We have concluded that if the Town and MD are to succeed in achieving their declared goal of enhanced regionalization there are a series of actions that could be implemented. While some are relatively simple with no financial consequences, others are significantly more complex requiring considerable investment of time and dollars.

Municipal and regional cooperation is key in instituting an effective regional service provision; it requires community leaders to be forward-thinking. In times of limited resources, collaboration is key. When we pool our resources, we have more to share. This intermunicipal cooperation means that good neighbors will always extend a helping hand.

The recommendations that follow will allow both municipalities to successfully implement enhanced regional cooperation, assuming the following:

• Leadership and governance structures work to support the communities they serve; • Cooperative working relationships exist and are strengthened between parties; and • Serving the best interests of the region remains at the forefront for priorities.

Through TSI’s comprehensive review process over a five-month period, we have gained a thorough understanding of the way both municipalities operate. By combining stakeholder feedback, operational interviews and an in-depth analysis of documentation with the extensive experience of TSI’s municipal consulting team, we are able to provide the Town and MD with a detailed series of recommendations for uninterrupted improvement. These recommendations span the depth and breadth of both organizations. They are based on municipal and legislative best practices.

The recommendations developed consider ensuring the positive aspects of the strong relationship between the Town and the MD, while making certain their respective operations are not overlooked, undervalued, or threatened. These recommendations aim to improve effectiveness, efficiency and responsiveness in governance and service delivery. They identify cost savings, human resourcing requirements, staff capabilities, and systems for accountability. In addition, TSI looked for opportunities that will reduce duplication, and clearly delineate roles and responsibilities. By ensuring both municipalities are working together with synergy, one can maximize the resources available to achieve the objectives of this Study. In implementing these recommendations, the Town and MD can be confident that they are providing services as a cohesive team and in an efficient manner. It will allow their region to manage now and provide the room to grow with their region.

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1.2 Project Plan

The TSI team understood the need to communicate our activities clearly and consistently throughout the project. We proposed a four-phase project work plan that considered all stakeholders and employed best practices in governance and modeling.

A comprehensive Project Plan confirmed all key milestones and touchpoints throughout the four-phase project. Timelines for consultation, progress reporting, developing a draft report for review, and delivering/presenting all final deliverables were realistic and took into consideration the summer and harvest seasons.

A start up meeting was held with both CAOs on August 5, 2020, followed by a Joint Council session in the evening in the Town of Fairview. The following day some of the TSI team conducted one on one interviews with councillors and administrative staff from both municipalities. At the same time, the other TSI members hosted two public engagement sessions. The sessions began with an introduction to the project, followed by an educational piece to share the continuum of collaborative governance. Stakeholders then had opportunity to comment on current service delivery and governance. They also provided feedback on what defined success of this Project, and identified which services were highest priority from their perspective.

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1.3 Stakeholder Consultation

TSI developed a multi-tiered approach to engage internal and external stakeholders, ensuring anyone who wished to have an opportunity to be engaged, could be involved. This public engagement and communications strategy were shared with the Municipalities:

• Pre-trip survey for Council and CAO’s • In person interviews with both CAO’s • Joint Council session & workshop • In person and virtual interviews with councillors • In person and virtual interviews with staff • Two public workshops • Online public survey (all raw results provided to Councils)

Key Messages Manual

Additionally, TSI provided a tailored Key Messages Manual for dissemination to senior members of each Municipality. This ensured that primary questions and issues had an appropriate response developed and agreed upon. The Key Messages Manual ensured everyone was tooled with the agreed upon responses and information regarding the Governance Study. The complete Key Messages Manual can be viewed in Appendix 1.

Website

TSI developed a website for the project as well. This website allows stakeholders the opportunity to find up to date information on the project, areas where they can engage and a place to host online forums or discussions: www.fairviewregionalization.com.

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Interviews

Interviews were conducted with the mayor, reeve and councillors from both municipalities, as well as the following administrative staff from the Town and the MD:

Administration Other CAOs (Town and MD) Corp Services Assistant (MD) Fire Chief (Town/MD) Administrative Assistant (MD) Director Agriculture and Parks (MD) Finance Assistant (MD) Director Community Services (Town) Director Public Works (MD) Director Legislative Services / IT / Bylaws (Town) Director of Legislative Services & Development Officer (MD) Director of Finance (Town) Director of Corporate Services & Finance (MD)

Public Workshops

Two workshops were held on August 6, 2020, with 28 attendees in attendance in total. The intent of these workshops was to hear from the residents and businesses through effective engagement. With the information gathered, the region will continue to build the future of Fairview in an inclusive manner, with eyes wide open to the potential opportunities and risks in regionalization of services. Detailed information about the public workshops can be found in Section 2.4 of this report.

The public survey results are available in Appendix 2a, 2b & 2c (combined, MD only, Town only results).

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2.0 STAKEHOLDER ENGAGEMENT What We Heard

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TSI launched the project with extensive internal and external engagement in an effort to define a baseline and look for opportunities through the eyes of staff, elected officials and residents. Our engagement encompassed a multi-layered approach which included the following:

- One on one interviews with staff from both the Town and MD - One on one interviews with the Councillors from both the Town and MD - Both a staff and Council survey - Resident survey - Two resident workshops

Our observations through these interviews, surveys and workshops can be categorized into governance, administration, service delivery and an external analysis of the strengths and weaknesses of the current system and the opportunities and threats through further collaboration on governance.

All stakeholders were provided an education on the various forms of regional governance. While TSI continued to clarify that this was not an amalgamation study, stakeholders continued to discuss the validity of amalgamation to their region. This was the case in both internal and external engagement.

Internal stakeholder engagement began with an online survey of the councillors and senior staff of the two municipalities. What we found from the 10 basic questions is that councillors felt there was duplication of services, collaboration over the past 10 years was good, and that there was room for more working together. There was some disagreement whether that was best accomplished through more joint use agreements or amalgamation. Dropping of municipal services to save money or increase efficiency generally was not acceptable.

From the viewpoint of staff, they also thought the two municipalities worked well together. This was in part due to the two CAO’s meeting regularly; many indicated other staff should be meeting on a regular basis. Staff were quite neutral about dropping services or working more collaboratively for the sake of efficiency or effectiveness. It seemed they felt this was the domain of council and as such, would do whatever council wanted. What they did strongly point out is that recruiting and keeping qualified staff is a challenge.

Based on information that was gathered from these introductory surveys, more in-depth data was collected from the in-person and phone interviews that took place in early August.

2.1 Governance

In the interviews, we heard clearly that the MD and Town are one community. As the Town of Fairview is the only incorporated urban municipality within the MD of Fairview, and it is basically in the geographic centre, this makes sense. In fact, there are some services implemented in cooperation with Clear Hills County and the Village of Hines Creek to the northwest, as those residents also access Fairview for services.

Amalgamation seemed more favourable from the Town viewpoint. MD interviewees had a worry about rural representation if that were to happen and about having to take over the Town’s debt. With a larger population, the Town residents may expect a majority representation on an amalgamated council. Both councillors and staff mentioned that there were many collaborations already in place and thought there would be room for more, but they were unsure what that would look like. The indication that revenues were decreasing for both municipalities with increasing costs was noted as a primary reason for this study – to find cost saving efficiencies. The status quo was clearly seen as not viable in the long term. Using the quarterly joint council meetings was seen as a very positive process for collaboration and open dialogue.

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Economic development was a touchy topic as there was an economic development committee that was disbanded recently. However, kudos to both municipalities for recognizing this as a need and hiring a consultant to complete an economic development study in 2020. The mixture of councillors with only a couple years’ experience to those with over 20 years’ experience along with a diversity of business/career backgrounds and residence locations made it clear that they all understood the need to work together on the economic development front.

2.2 Administration

There are currently two municipal offices, both in the Town. As such there is sometimes confusion from the public as to which building they need to go to. There are instances when rural residents showed up at the Town office for services, such as paying bills or taxes. Within those two offices, it is clear that there are efficiencies to be gained by combining duplicated administrative tasks. For instance, this could include utility billing, assessment, safety and IT. However, loss of municipal jobs was a major concern for everyone as the region has already had job losses. Losing good paying municipal positions could have a further detrimental impact on the local economy of the Town and MD.

As a result of many joint agreements, there are significant dollars that go back and forth between the two municipalities. One serious concern heard was if amalgamation took place, there could be a reduction in grants, including the Federal Gas Tax and MSI.

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2.3 Service Delivery

Everyone wants to maintain the current level of services. Therefore, somehow delivering those services differently or possibly through one administration would be a way to increase efficiency while saving money.

Fire Services were spoken very highly of, as the joint department seems to operate really well. The only concern heard is who the fire chief reports to:

• the joint council where he presents regular operations reports; or • the advisory committee; or • the Town Director of Community Services?

The organizational charts (found on pages 28 and 29) do not help as the Fire Chief is not shown on either.

Another really good example of an effective and efficient service is the North Peace Regional Landfill Commission. This service goes beyond the MD and Town boundaries to include the Village of Hines Creek and Clear Hills County. A natural expansion of this service could be residential solid waste collection, and perhaps also rural transfer stations.

One example of services with challenges is bylaw enforcement. The Town has a bylaw officer while over at the MD it is buried within someone’s job description and does not get the priority some residents feel it should. Comments were made that a joint agreement could be created to help the MD with the service while reducing costs to the Town.

Both municipalities have potable water systems and sanitary sewer, with staffing issues apparent. The MD currently uses the Town Director of Public Works to ensure they meet Alberta Environment standards as there are no certified operators in the rural area. Whether the water systems should be self-sustaining (not subsidized by taxes) was a topic of much debate.

Contracting services to the private sector is common. Residential solid waste collection and recycling, property assessment, IT and many planning functions are outsourced. This is common in smaller

Town of Fairview & M.D. of Fairview No. 136 Regional Governance Study 2020 FINAL REPORT 16 municipalities due to economies of scale. The Mackenzie Municipal Services Agency provides an entire suite of planning services in the Peace River region, however at differing levels for the Town and the MD.

A number of services are unique and only done by one municipality. This includes the airport (operated by the MD), an indoor pool (operated by the Town), FCSS (Town staff) and cemetery maintenance (done by the MD). There are some agreements in place for cost sharing these services between the two municipalities. In comparison, some significant services are handled independently by staff of both municipalities. This includes general recreation, parks, and road maintenance. Some collaboration was hinted at in the roads area, such as using MD trucks for snowplowing in the Town.

One very unique service mentioned was the Peace Country Beef and Forage Association agricultural applied research farm. This is very important to the MD and the agriculture industry in the Peace River region. Another service to the community that is run by a not-for-profit society is the Fairview Ski Hill. This is an example of one of the many societies in the area providing services, especially recreation, to the residents. The MD contributes funding to the research association and the ski hill society.

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2.4 External Analysis

Survey

Over the course of approximately two months, TSI promoted a survey aimed at measuring the importance of various service levels in the region. This was done through newspaper advertising, online through social media and the Town and MD websites and through direct mail to Town residents through the utility bill. The survey also discussed regional governance and collaborative opportunities. Close to one hundred residents participated in the survey, with a suitable balance between rural and urban.

While the residents are definitely looking for some positive changes in the community, over 53% of the community is either satisfied or very satisfied with the services they are currently receiving from their municipality, with an additional almost 10% impartial. These are very positive results, particularly in a slower economic climate. Of further note is that although over 60% of the community is either impartial or satisfied with their services, the combined rating on service level compared to tax rate was only a four out of ten. One can infer that while the municipalities are not dissatisfied with the service levels, they do feel they are being taxed too much for that level of service. This is not abnormal results as property taxes are usually the one area where residents are rarely satisfied.

When asked if residents believed the Town and the MD could operate more efficiently and effectively, there was a large majority that believed there was definitely room for further collaboration to increase efficiency.

When looking at the individual services in the region, the satisfaction results are in line with provincial norms. No one appreciates bylaw enforcement, until they need them, so typically we see a low satisfaction rate in this area. Both the fire department, the landfill and water services in the region have high levels of satisfaction. Two areas where residents feel the least levels of satisfaction include recreation, economic development and tourism. This was echoed in the workshops where residents identified their frustration with the lack of business attraction and the loss of some local businesses, including the college. Employment and opportunity for youth was brought up frequently in all workshops, both internal and external.

18 When comparing the above satisfaction levels with that of the level of importance residents put on the services, the key things to note is that while economic development is rated quite low in regards to satisfaction, it is rated quite high in regards to the importance to the service. Again, comments echoed through all workshops and many interviews that the region desperately needed business attraction to reduce the drain of residents to other jurisdictions.

Service Satisfaction

Importance of Service

Last notable area of the survey was the discussion around regional governance. While the term amalgamation came up frequently in the workshop discussions, there was a small majority that did not feel consolidating into one government was the right move.

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While a small majority do not believe amalgamation is the right move, over 60% of the respondents believe there are one or more services that could benefit from being consolidated under one form of regional governance.

The TSI team utilized information from the survey to support recommendations surrounding regional governance. The Town and MD may wish to review the comments received in the survey further for opportunities on service delivery, including clear communications on how their service levels are tied to budgets, particularly in a tumultuous economic climate.

Workshops

The external stakeholder workshops focused on two main areas: the strengths and weaknesses of the current situation and the opportunities and threats of increased regional governance. Participants were divided into groups of two or three and asked to spend time at each of the four areas, discussing all the items they felt fell under those areas. Some areas seemed to be easier to fill in than others, but the participation was encouraging and the desire for change was apparent. The complete SWOT analysis can be viewed on page 21.

A group of summer staff were also invited to the workshop. TSI took the advantage to have a youth engagement session with those four individuals on the side. They focused on the same areas as the others, but the information garnered was quite different as they were able to speak freely amongst their peers, with mutual agreement in a lot of areas.

Establishing a Baseline

Considerable time and effort were dedicated to document review and what the public had to say about collaboration and cooperation. All municipal agreements, joint service bylaws, inter-municipal agreements, regulations, statutory plans, minutes, budgets, financial statements, relevant reports, mill rate bylaws, surveys, and other best practices were examined in order to establish a baseline for governance and delivery of services on a regional basis.

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21

3.0 SERVICE DELIVERY REVIEW

22 3.1 Service Delivery

In a general overview of services delivered by the Town and MD, we saw a concerted and cooperative effort being made at the operational level. The same can be said at the political level where mutual respect and a collaborative desire were observed. Each Council, as stewards of the public purse for their respective constituents, have developed similar philosophical approaches and generally do not conflict on service delivery. In fact, a number of cost sharing arrangements are in place that indicate each municipality is comfortable that their citizens are paying their fair share. By continuing to work through their collaboration frameworks, TSI believes the two municipalities can further create a community well prepared for future growth.

The following three tables provide a summary snapshot of services that are provided independently in each Municipality (only one municipality requires this service); services that are provided in duplication in both the Town and the MD, and finally those services that are jointly provided by the two municipalities using a formal regional approach, such as a Commission or signed agreement.

The services shown in Table 1 are typical ones that are unique to each municipality. The MD, being a rural municipality, provides agricultural services such as pest control, roadside spraying and weed control, and these are very significant line items in the budget. The Town also does weed control but on a much smaller scale, within their parks budget. Similarly, the EEO Community Hall is unique in the Town as one of their services, but rural residents use it alongside their urban neighbours. The entire community uses the cemeteries, which are located in the MD, and some funds are transferred from the Town to the MD to support their maintenance.

Table 1 Independent Services (unique to each Municipality)

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There are some reasonable quick wins (see Table 2) that could be implemented sooner rather than later, and continue the process of demonstrating to the public the municipalities’ commitment to regional collaboration and cooperation. A short-term goal for the municipalities could be to move items from Table 2 to Table 3. Because both municipalities provide these services with their own staff or through a contract with a third-party vendor, there are opportunities to increase efficiencies both financially and operationally. For instance, while neither the Town nor MD need a full-time bylaw officer, a person serving both municipalities together may work quite well. Animal Control could be wrapped up in this position as well.

Table 2 Duplicate Services (both municipalities provide this service independent of one another)

A couple other internal services that could be contracted out jointly or perhaps a staff member could be hired to work in both municipalities, are IT and safety. Safety is very important, but when it is a small part of someone’s duties, it often unintentionally gets overlooked. The MD found that their safety program faltered (lost COR status) until a staff member was hired with much greater emphasis on safety as a priority task. Given some of the speciality training and legislative requirements around occupational health & safety, a qualified person may be easier to hire if there is work in both the Town and the MD. IT also has significant specialization in computer networking and maintaining complex software. A bonus of having the same staff member or contractor working for both municipalities in IT could be to create similar looking websites. This would allow residents, business owners and visitors to find information easily and ensure accuracy for the entire community.

Water and wastewater services require trained staff to ensure these utilities are providing the best product for residents. The MD purchases water from the Town for 21 customers of the Fairview Rural Water Co-op, and residents in the Hamlet of Bluesky. TSI is advised that the Fairview Rural Water Co-Op bills their 21 customers and then pays the MD for the water that those customers consumed. Town utility staff are contracted by the MD to meet AB Environment rules of certified operators. This is one area where municipalities often form contracts for services, where only one municipality provides the service to both. The municipalities could agree on different fees for urban and rural, as population density impacts

Town of Fairview & M.D. of Fairview No. 136 Regional Governance Study 2020 FINAL REPORT 24 efficiencies and costs. Alternatively, an independent commission could be created that provides the service and has requisitioning powers to ensure sustainability.

Both municipalities provide solid waste pickup in the Town and the hamlets, using the same private sector business. There may be opportunities for cost saving if there was a joint contract with this provider. Perhaps the Regional Landfill Commission would be interested in establishing a residential pickup service. However, this would take much discussion as it would also involve Clear Hills County and the Village of Hines Creek. Similarly, both municipalities use the MMSA for planning and development processes. Some development tasks are done with municipal staff, but at different levels from the Town and MD. A joint contract for service with MMSA may also have efficiency and cost savings for the municipalities. Property assessment is done in both the MD and Town by KCL. This is another example where a joint contract may lead to efficiencies.

The MD and Town should be very proud at how well they currently work together. Having thirteen agreements in place shows they understand the need to find efficiencies that keep costs down and still provide a high level of service. Table 3 lists the agreements that function both at an operational level and a governance level. Not all Agreements listed in the ICF are reflected in Table 3 as they are not signed e.g. Airport, Cemetery, Heart of the Peace Economic Development, Arts Culture & Tourism, and Public Works Services. While agreements for services provide increased operational efficiency, sometimes they add an advisory committee which can counteract this.

Table 3 Joint Services (provided by the two municipalities via formal regional approach)

Animal Impound Facility Joint Library Board EE Oliver Community Hall /Operation /Usage Joint Volunteer Fire Dept Fairview & District Handi-Van and Shuttle Van Operations Lead Water & Wastewater Operator FCSS Program North Peace Regional Landfill Commission Health Professional Enhancement Committee Recreation Funding ICF Water Supply Joint Emergency Management

The public have said they need their elected officials to continue to work together and consider the region as a whole, in both governance and service delivery. Some public members continue to believe the region would be better served if it functioned as a single entity working for the benefit of all. That said, “consolidation or amalgamation” at this time is only one of many options to achieve optimal efficiencies.

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As part of this governance review, a commitment was made to perform an in-depth SWOT analysis on the existing programs and services.

Notwithstanding additional strengths, weaknesses, opportunities, and threats could be added to the list, the points contained herein provide added insight as to how the MD and Town programs and services could potentially be impacted and/or improved.

26 3.2 Governance & Committee Appointments

Having councillors represent council on committees and external organizations is an important part of governance. The Town appoints members to 23 committees while the MD appoints members to 31 committees. However, if councillors are attending too many meetings this adds to the cost of governing the municipality. There are half a dozen advisory committees that are created by bilateral agreements. Another committee is created by the airport bylaw, which includes members from Clear Hills County and the Village of Hines Creek. This committee also includes a pilot, however with so many elected officials at the table, is this lone voice of the user actually heard?

Given the cost to attend these committee meetings, including per diems and travel expenses, it would be appropriate to regularly review the need for municipal representation. Some examples are Rural Crime Watch, Fort Dunvegan Historical Society, Fairview Ski Club Committee, Public Works Committee, Admin/Legislative Committee and GPRC Fairview Campus Liaison.

It might be more appropriate for the external groups to make presentations to council annually or as needed, instead of having a councillor on their Board. If a service is being provided by an independent society, the councils should let them do their job, without direct oversight.

3.3 Internal Services: Current Management and Reporting Responsibilities

As shown in the organizational charts below, the structures for both municipalities are similar. Reporting to each Council is a CAO who in turn has four direct reports (Directors). All remaining staff report to a Director either directly or indirectly. Three of the Director positions have the same/similar titles: • Director of Public Works • Director of Corporate Services/Finance and • Director of Legislative Services/Development Officer).

The fourth directorate positions differ whereby the MD has a Director of Agriculture & Parks, while the Town has a Director of Community Services.

27 MD of Fairview Organizational Chart

The MD compliment of full-time personnel is 21 and is broken down as follows: • Administration (includes CAO & two Directors) – 6; • Agriculture & Parks – 1; and • Public Works – 14 (within Public Works there is one Director, 1 Manager, 4 grader operators, 1 heavy duty mechanic and 7 heavy equipment operators).

In addition to these 21 full time positions there are 9 part-time (seasonal) positions as follows: • 2 public works labourers • 2 weed inspectors • 1 roadside mower operator • 4 cemetery/parks maintenance labourers

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Town of Fairview Organizational Chart

The Town compliment of full-time personnel is 24 and is broken down as follows: • Administration (includes CAO & two Directors) – 7; • Community Services – 9; and • Public Works – 8.

In addition to these 24 full time positions there are 14 part-time: • 12 in Community Services and • 2 in Public Works), • 1 medical leave of absence, and • 6 seasonal positions (4 in Community Services and 2 in Public Works).

The management and reporting structures align very closely and could be an area where service delivery adjustments may yield economies of scale that result in enhanced fiscal management practices and savings to taxpayers.

The MD has 21 full-time positions compared to the Town with 24. However, considering the MD has 18 personnel in Public Works looking after its network of roads and bridges, a larger number of personnel is typical in rural municipalities. To support this larger complement of public works operators and their

Town of Fairview & M.D. of Fairview No. 136 Regional Governance Study 2020 FINAL REPORT 29 equipment, the MD does most of their fleet maintenance in-house while the Town tends to contract those services out.

Both municipalities have similar numbers of administration, including seasonal and part-time positions. Within the Town, Community Services has the largest compliment of employees with 9 full-time and 12 part-time. Given the recreation facility amenities the Town operates this does not seem unreasonable. Conversely the MD has few recreation facility amenities which it operates.

Given these similarities, it may be feasible to share staff or have one municipality do a task for the other. Utility billing is one example. If the two softwares (water meter reading and billing) are compatible, one administrative team could do it all for the entire community, perhaps even for the Fairview Rural Water Co-op as well. As mentioned previously, Health and Safety is another position that could be shared. Obvious by its omission is the fire chief, as neither municipality shows who this position reports to. It is unclear if he reports to a Director, the CAO’s or the council(s).

Town administrative staff work out of an office in rented space located in the Provincial Building. The Town owns a stand-alone public works building. The MD owns a combined office, public works shop and yard facility. The MD allocates dollars to a building replacement reserve each year, including $50,000 for 2020. The total accumulated reserve for the office building replacement at December 31, 2019 was nearly $400,000. An option to a new building may be to lease space in the Provincial Building (if available) so residents would have “one stop” services. However, this will not work if the plan is to build an office and shop complex together.

SWOT Analysis

A SWOT review on division of responsibilities and department structures offers some added insights into how the MD and Town have aligned their organizational structures to address service delivery.

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3.4 Current Intermunicipal Agreements

Thirteen written intermunicipal agreements are in place. These agreements set out terms, responsibilities and cost sharing arrangements of each party. Many of the agreements create advisory committees. Below is a brief overview of each agreement followed by an overall SWOT analysis on the current agreements.

Animal Impound Facility • Bi-lateral agreement (MD & Town) • Impound Facility owned and operated by the Town • MD may use for impounded dogs & cats captured in the MD • MD pays one third of annual animal shelter operating costs • MD will consider capital cost contributions on a case by case basis • Term: May 8, 2018 – No Expiry Date

EE Oliver Community Complex Joint Maintenance/Operation/Usage • Multi-lateral agreement (MD, Town, Peace River School Division) • EE Oliver School & Community Complex is owned and operated by the Division • MD & Town may use the school for community use • Town responsible for bookings, billings & collections • The Division is responsible for 50% of operating costs with MD & Town splitting the remaining 50% on a 50/50 basis • Term: December 16, 2014 – No Expiry Date (reviewed on an annual basis)

Fairview & District Handi-Van and Shuttle Van Operations • Multi-lateral agreement (MD, Town, North Peace Housing Foundation) • To provide bus services for seniors and handicapped persons • Management of Harvest Lodge are the operating authority • MD and Town each pay 50% of operating cost • Term: June 18, 2004 – No Expiry Date (3 months’ notice prior to fiscal year end to withdraw)

FCSS Program • Bylaw and Agreement establishes an MD/Town joint FCSS service and sets terms of the Advisory Committee • Town is the administration and operational authority • Term: September 23, 2014 – No Expiry Date

Health Professional Enhancement Committee • Multi-lateral agreement (MD, Town, Clear Hills Co, Village of Hines Creek) • Joint advisory committee to enhance professional health care recruitment and retention • Chair and Vice Chair rotate amongst the four municipalities • Financial allocation based on per capita • Committee appoints the managing partner and treasurer • Term: May 27, 2019 – No Expiry Date (30 days’ notice to withdraw/renegotiate)

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ICF • Bi-lateral agreement (MD & Town) • Establishes the ICF Committee • Lists 16 collaborative agreements *TSI was provided with only 14 Agreements to disseminate in this project* • Term: February 13, 2020 – Expires February 13, 2025

Joint Emergency Management • Bi-lateral (MD & Town) • Establishes the joint emergency management advisory committee • Establishes the joint emergency management agency • Term: December 17, 2019 – No Expiry Date

Joint Library Board • Bi-lateral agreement (MD & Town) • All Board appointments are joint appointments by both councils • Annual Board budget is to be presented to the joint budget committee • Term: May 28, 2002 – No Expiry Date

Joint Volunteer Fire Department • Bi-lateral agreement (MD & Town) • Town is designated the administration & operational management partner • Fire Chief reports to both Town and MD CAO’s • Establishes the Volunteer Fire Department Committee • Each council shall adopt the annual Fire Dept operating and capital budget • MD will pay half of all operating and capital expenses • E911 dispatch services shared on a per capita basis • Term: October 3, 2017 – No Expiry Date (to be reviewed in 4 years)

Lead Water & Wastewater Operator • Bi-lateral agreement (MD & Town) • Provision of temporary Certified Lead Operator services and staff training to MD • MD pays Town monthly fee of $1680, $55/hr for extra support, $25/day for vehicle • December 6, 2019 – No Expiry Date (60 days’ notice to withdraw from agreement)

North Peace Regional Landfill Commission • Multi-lateral (MD, Town, Clear Hills Co, Village of Hines Creek) • Each member pays fees based on tonnage • Term: June 13, 2002– No Expiry Date (Order in Council)

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Recreation Funding • Bi-lateral agreement (MD & Town) • Establishes multi-lateral committee to advise Town on Recreation • Town owns and operates an indoor aquatic facility and artificial ice arena • MD pays Town $60,000 for pool operations, 25% of arena deficit • Capital budget requests are separate • Term: June 29, 2013 – No Expiry Date (30 days’ notice to amend or terminate)

Water Supply • Bi-lateral agreement (MD & Town) • Potable water system owned and operated by Town • Town provides water to MD to supply Hamlet of Bluesky • MD responsible to pay Town an agreed amount based on usage • Term: May 20, 1994 – May 20, 2019, then implies an annual agreement, with 12 months’ notice to withdraw (no data provided showing agreement has been formally extended)

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SWOT ANALYSIS

Agreements are a great example of how the two municipalities collaborate. A review using a SWOT analysis helps show things that are going well, possible weaknesses and future chances for success in relation to current intermunicipal agreements.

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4.0 FINANCIAL REVIEW

35 4.1 Municipal Finances

A review of the current operating expenses was completed for the Town and the MD. It is important to fully understand the details of each budget to determine how each municipality earns their revenue and where they budget their expenses.

An Excel financial model was created to compare the operating budgets against each other. The financial model aligns the operating revenues and expenditures for each municipality. The model allows for a comparative analysis of the operating budgets. Some re-alignments and edits were completed to allow for this side by side comparison, such as removing the MD’s capital budget, which was combined within the operating budget.

The model produces many comparative reports including: • Summary reports by account and department • Detail reports by account and department • Detail reports by account for all individual departments The reports are built showing each municipality’s budget line compared to each other and then a total of both, showing the aggregate total budgeted for each account / department. Showing the aggregate budget provide context on how much revenue or expense for each account is occurring in the region.

Below are the one-page summary reports by account and department. These reports are very valuable as it provides a comprehensive financial summary of all account types and departments for each municipality and for the entire region.

For example, the Summary Report by Account (Table 4) shows high-level financial information such as: • The region earns and spends $16.8M on municipal operations annually • Property taxes generate $10.6M annually. This amount includes all municipal property taxes, Provincial education taxes and all other taxes provided to region requisitioning authorities. • Utility fees generate $2.9M annually and this revenue is entirely spent on utility operations. • $4.9M is budgeted annually on salary and benefits. • $1.8M is budgeted into reserves annually.

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Table 4 Summary Budget

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The Summary Report by Department (Table 5) also provides valuable high-level financial information for each department, or seen another way by each municipal service.

The report offers services related information such as: • $5.1M is spent regionally providing public works, roads, grading and graveling services each year • $2.9M is spent on utility operations each year • $2.8M is transferred, via requisitions, to other government agencies each year • $1.8M is spent annually on administration services • $342K is spent of fire and ambulance operations each year • The MD Public Works budget includes a one-time grant for disaster recovery ($150K). The budget also includes $40K from the sale of dust control products. The MD is transferring $58K from reserve this year to fund bridge file assessment reports. • The summary department report details all other services and the revenue and expenditures that are budgeted each year The Financial Detailed Report by Account can be found in Appendix 6. The Individual Department Report can be found in Appendix 7.

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Table 5 Summary Report by Department

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4.2 Financial Observations

The following are detailed observations regarding the Town and MD’s revenue and expenditure budgets. The intent is to identify what each municipality is budgeting and to provide comments on the content of the budget amount. Where possible the budgets are compared and observation comments are provided.

Property Taxes and Assessment Values

Property taxes for the region each year total $10.6M, with the MD accounting for $6.4M and the Town accounting for $4.2M, as shown in Table 6. This includes taxes from all assessment categories, education taxes, grant in lieu revenue, frontage taxes and North Peace Housing Foundation.

The make-up of property taxes is quite different between the Town and the MD. The Town generates most of their property taxes from residential and non-residential (commercial) assessments while the MD generates most of their tax revenue from M&E and Linear assessments.

There was some concern about how the recent Provincial government assessment model review was going to impact the tax generation from linear properties. The Province recently announced their recommendation which is outlined in Section 4.3 along with additional comments.

The educational requisitions are quite similar. The Town has a provincial education requisition of $857K and the MD has a provincial education requisition of $867K.

Table 6 Tax Revenue

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Mill Rates

A complete analysis of the Town and MD mill rates and assessment values are included later in this report in Section 5 Benchmarking. That said, the following are the financial observations for the region’s mill rates.

Table 7 shows the approved mill rates for 2020 for the MD and the Town. Both municipalities tax residential assessments are very similar (9.00 vs. 9.75). As mentioned earlier, the Town generates most of their tax revenue from this assessment category. The Town has a much lower mill rate for non-residential and commercial properties. Most of the properties in this assessment are small business owners within the Town.

The MD has three different mill rates, opting to tax farmland at a higher rate than residential assessment generating $621K for the MD. The MD has a M&E and Linear mill rate of 21.50. This assessment category is usually made up of large international companies with businesses in oil and gas, power transmission or pipeline right of ways. This assessment category generates the largest component of tax revenue for the MD at $3.3M Table 7 Mill Rate (2020)

Assessment Category MD Town Residential 9.00 9.75 Farmland 18.00 9.75 Non-Residential / Commercial 21.50 14.45 Machinery & Equipment 21.50 14.45 Linear (electrical power / pipelines) 21.50 14.45

Government Grants

The 2020 budgets for both the MD and the Town include their MSI operating grants. The Town receives $172K and the MD receives $72K as shown in Table 8.

The Town budgets for the annual FCSS provincial grant of $156K and two other ‘one-time’ grants. One for $35K from the Provincial Community and Economic Support (CARES) grant program and $100K from the ACP grant program.

The MD budgets for a Provincial Agriculture grant of $123K and for a ‘one-time’ grant of $150K from the Alberta Disaster Assistance and Recovery grant program.

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Table 8 Government Grants

Investment Income

The MD and the Town both budget for interest revenue earned from cash holdings in the bank. These cash holding consist of current funds, restricted and unrestricted reserves and deferred grant funds that are yet to be used.

The MD budgets for $158K and the Town budgets for $53K. At year end 2019 the MD had $8.2M in reserves and $1.2M of deferred revenue (grants) and the Town had $5.7M in reserves and $82K in deferred revenue.

Utility Operations

The Town operates a municipal water and sanitary sewer system, including a water treatment plant, reservoirs and lagoons. This operation is a significant financial item in their operating budget. Table 9 details how the utilities generate their revenue. An item of note is the $584K for capital replacement fees. The Town has a separate charge on the utility bill for capital replacement, which is treated as a transfer to reserve.

The MD purchases water from the Town, then sells it to the residents in the hamlet of Bluesky and 21 of the 200 Fairview Rural Water Co-op customers. The Hamlet of Whitelaw gets its water from an artesian well. The MD operates sanitary lagoons in these hamlets and charges sewer fees to fund the operations. Bulk water / truck fill sales are located in both hamlets as well. A bulk water truck fill station is also operated at the Whitelaw Springs. Table 9 Utility User Fees

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User Fees and Charges

The MD earns revenue from three major areas. They budget for $40K in aviation fuel sales at the airport, $40K in gravel sales and $40K in dust suppression materials as shown in Table 10. The MD received $18K as a one-time funding for assessment services from the Provincial government in 2020.

Overall, the Town earns $578K from user fees and charges, which is a significant revenue source. The largest component of this budget is the franchise fee of $395K that is received from ATCO Gas and Electric. Other major user fee revenues include $87K from pool admission fees, $42K from Fire motor vehicle accident (MVA) responses and $18K for the Summer’s End Event.

Table 10 User Fees

Rental Revenue

Looking at Table 10, the Town earns $95K revenue from arena ice rentals, $16K from rentals of the Community Hall and meeting rooms in the arena, and $5.3K from tower and land lease rentals. The MD earns rental of $8.5K comprised of various meeting rooms, equipment and airport parking fees.

Table 11 Rental Revenue

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Fines and Penalties

Both the MD and the Town budget for fines and penalties revenue. The Town budgets $49K and the MD budgets $38K. The majority of this revenue is generated from penalties on late tax payments. Other items include late payments penalties on utility bills, provincial fines and bylaw fines.

Regional Funding Transfers

The MD and Town transfer funds to each other for various services. Some of these transfers are built into ongoing service agreements between the municipalities.

The Town budgets to receive $255K from the MD each year. Table 12 details services they receive funding for. Major services include the swimming pool, fire services, the arena and other recreational services.

The MD receives $88K from the Town each year. The two services are the airport and the cemetery.

Table 12 Regional Transfers

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Transfers from Other Groups

The Town budgets $35K for revenue transfers received from other groups. They receive $25K from the Grande Prairie Regional College for the swimming pool, $3.5K for FCSS sponsorship from the FCSS group for applications review, $3.5K for Cummings Lake from the Province and $3.5K for Canada Day from the Province.

Other Revenue

Both the MD and Town budget for other miscellaneous revenue items. The Town budgets $43K and the MD budgets $59K. Some examples of these revenues are sales of used equipment, tax notices and donations. The Town does budget to receive $19K in revenue each year from the golf course. These funds are a repayment of a past loan.

Salary and Employee Benefits

The MD and Town have very similar salary, benefit budgets and staffing levels. The Town has 23 full time staff and 12 part time staff and the MD has 21 full time staff and 9 seasonal staff.

The resulting budgets are similar as well. Table 13 shows the breakdown of the salary and benefit budgets.

Although the makeup is slightly different the bottom-line budget for this area is $2.4M for both the Town and the MD. Both budget for salaries, wages, employer contributions, employee benefits and WCB. They are just categorized a little differently in each municipality.

Table 13 Salary & Employee Benefits

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Council Expenses

Table 14 shows the Council expense budgets for the Town and the MD. The budgets show that the Town has more Council expenses than the MD.

The Town budgets $65K for Council in non-honorariums. This budget is so that Council is able to provide grants to organizations ($22K), and to be able to waive taxes ($25K), waive utility payments ($500) and provide development incentives ($18K). The MD budgets $10K for Council in public relations.

It should be noted that the actual MD’s Council expenses over the past2 years have been higher than the 2020 budgeted amount. The actual Council expenses in 2019 were $254K and in 2018 the actual expenses were $202K. The reason provided for the lower Council expenses in 2020 was the expectation of less meetings due to the COVID-19 Pandemic.

Table 14 Council Expenses

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Business and Training Expenses

Table 15 shows the budget breakdown of the Town and MD’s business and training expenses. The Town’s budget is $261K and the MD’s budget is $136K.

The Town budgets significantly more for training ($58K vs. $11K). The Town’s training costs are related to mandatory water and sewer municipal operations certifications, firefighter training costs, bylaw officer training, FCSS staff training and other administration training.

The Town’s postage budget is much higher due to the monthly mailout of utility bills. The Town also budgets for the Economic Development committee expenses and doctor recruitment in this category.

Table 15 Business & Training Expenses

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Professional Services

The total professional services budget for both the Town and MD are very close with $374K and $388K respectively. However, the make-up of the budget is quite different as can be seen in Table 16. Auditor and legal services are similar, but the cost of assessment services in the MD is much higher than the Town ($104K vs $36K).

The MD budgets for engineering services ($77K) in their road projects and $87K for computer programing. The Town has two ‘one-time’ budgets: one for $100K for a regional study and another one for $70K for an economic development study. Both municipalities budget for insurance services as well. The Town is a little higher, likely due to more facilities.

Table 16 Professional Services

Rentals and Leases

Looking at Table 17, Both the Town and MD budget for rental space in the library. The Town leases their administration office from the Province for $49K per year. The MD rents specialized equipment for gravel operations. Table 17 Rentals and Leases

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Contracted Services

The MD budgets twice as much as the Town in contracted and general services in this section, however the Town budgets some of their contracted services in the Repairs and Maintenance section.

The MD budgets $781K in contracted services. The major components of this budget are: • $81.5K for contracted equipment repairs • $17K for airport operations • $505K for gravel operations and crushing services • $25K for water and sewer operations • $16.5K for waste pickup • $88.5K for planning and development permitting and inspections • $37K for agriculture weed spraying • The MD also contracts companies for the provision of heavy equipment, graders and vehicle repair As per Table 18, the MD budgets $125K for contracted dust abatement and another $38K for RCMP policing. The Town budgets $99K for contracted services, including $30K for animal control, $15K for planning & development, $31.5K for service reception at the pool, $13.5K for the community hall. The Town also budgets $84K for computer software maintenance agreements, $143K for curbside waste pickup and disposal, $76K for recycling services and $50K for snow removal. It should be noted that the Town and MD use the same contractor for household waste pickup and disposal.

Table 18 Contracted Services

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Supplies and Materials

The supply budgets for the Town and the MD contain typical budget lines found in most municipalities such as office supplies, snow and ice control supplies, street signs, vehicle parts, road maintenance materials and tools. The table below contains all of these typical budget items.

The Town has $18K in program supplies for services offered at the pool and the arena, as shown in Table 19. The Town budgets $65K for special events such as Canada Day - $14.5K, Town festivals - $37.5K, $4K for the handi-van and $9.5K for tourism. The Town has budgets for general goods and supplies which is spread out over many departments such as water, sewer, the pool, parks and the campground.

The MD budgets much more for supplies items such as fuel, tires, blades and bridge and culvert materials because of the large inventory of rural roads. The Town budgets for vehicle, road and water system maintenance under the next section.

Table 19 Supplies & Materials

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Repairs and Maintenance

The Town budget for maintenance for roads, utility systems and vehicles are found in this section. In most cases this work is contracted out, but there are some budgeted expenses for work done in house. The general repair and maintenance budget are for facility repairs. The MD has a separate budget line for facility repairs, as shown in Table 20.

Table 20 Repairs & Maintenance

Utilities

The Town budgets for all utilities in one account. The total budget is $687K. This includes water, sewer, electricity, natural gas and street lights. The cost of street lights is the majority of this budget at $311K.

The MD budgets for all its utilities in two accounts. The general utility budget of $176K includes electricity, natural gas, water and sewer. There is a second account for water $70K. The water purchased is for resale to the Bluesky residents, 21 Fairview Rural Water Co-op customers and one truck fill station.

Requisitions

Requisitions are the expenses that both municipalities pay to other requisitioning entities. Most of these expenses are funded by taxes and have their own mill rate on the assessment properties such as AB Education, Designated Industrial and Regional Housing. Others do not have their own mill rate and are funded through regular municipal taxes and are budgeted annually such as the landfill requisition and the library requisitions. Refer to Table 21 on the following page.

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Table 21 Requisitions

Regional Transfers

The Town and the MD budget to contribute funds to each other for various services. The revenue section detailed how each municipality budgets to receive funding and this section details how they budget to send funds to the other municipality. The services that are budgeted are detailed below in Table 22.

Table 22 Regional Transfers

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Municipal Operating Grants

Both the Town and the MD provide grants to various groups in the region. Table 23 details the grants and amounts that are given.

The MD has a budget line for ‘Other grants to organizations’ for $156K. The major grants provided in this budget are: • $55K in general recreation grants provided to hockey teams, ski club, recreation events, ice sponsorships and other small grants that are handed out each year • $46K to Agriculture Society • $41K to various FCSS groups • The VSI grant is provided to Veterinary Services Inc. to support veterinary service costs for meat supplying livestock producers

Table 23 Municipal Operating Grants

Other Expenses

Other expenses are small expenses that aren’t captured in other areas, such as bank fees and Licenses and Permits.

There is a negative budget account in other expenses for the MD. This is a transfer of current year expenses for gravel operations that exceeds the use of gravel for the year. The gravel, and the cost to produce it, are transferred to an inventory account to be used in a future year. The gravel crushing operation produces surplus gravel each year. The value of this gravel is transferred to an inventory asset account. Since these costs are for a future year, this transfer creates a credit balance.

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Reserve Contributions

Both municipalities contribute annually to their capital and operating reserves as detailed below in Table 24. The capital reserve contributions are being made to fund future water, sewer, roads, equipment and facility capital projects.

Table 24 Reserve Contributions

Debt Repayment

The Town has several debentures for road and utility projects. Their annual debenture payments are $317K. The Town also assisted the local golf course with a loan. The golf course pays the Town annually for the cost of the debenture repayment of $19K.

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4.3 Provincial Assessment Model Review

The Province has recently undertaken a review of how oil and gas properties will be assessed with implementation as early as 2021. As of August 2020, four potential scenarios had been developed with province-wide overall assessment reductions ranging from 7% to 20%. Industry representatives have indicated they are supportive of the option that reduces the assessment by 20%.

“Rural municipalities would lose over $290 million in 2021 alone under the industry-supported scenario”

The Rural Municipalities Association of Alberta have indicated they are extremely concerned with how all four options reduce the financial viability of many of its members: “Under the scenario favoured by industry stakeholders, an average rural municipality would lose 12.4% of their revenues in the first year of implementation, with 11 RMA members losing over 20%. Collectively, rural municipalities would lose over $290 million in 2021 alone under the industry-supported scenario”.

In a news release issued by the MD on August 10, 2020, the impact of these four scenarios could result in a loss of $989,000 to $1,220,000 in municipal taxes from oil and gas properties. As a result “the MD will be forced to make one or a combination of the following adjustments in operations: increase the residential/farmland mill rate between 64.7% and 79.9% (for example, the potential impact on a residential property owner currently paying $3,000 in taxes per year may pay an additional $1,950 to $2,400 per year); increase the non-residential (businesses in the MD) mill rate between 38.7% and 52.6%; and/or decrease our workforce between 43.6% and 53.8% with a corresponding loss in services”.

On October 19, 2020 the Minister of Municipal Affairs made an announcement regarding the review: “Energy companies will receive a three-year exemption from property taxes when drilling new wells and building new pipelines. The government will also eliminate the Well Drilling Equipment Tax provincewide for new drills”. These two aspects of the announcement will have no impact on current revenues municipalities receive. However, “the government will lower assessments for less productive oil and gas wells while continuing the recently introduced 35 per cent assessment reduction on shallow gas wells for three years” will have an impact on 2021 municipal budgets. Depending upon how many wells fit the less productive definition or are considered shallow gas wells, will determine the amount of assessment reduction. Until such time as provincial assessors complete their calculations the exact amount impacting municipalities including the MD will not be known although the Minister did indicate that on average, municipalities will lose about 3 percent of their tax base as opposed to the 7 – 20 percent first anticipated.

Therefore, while the fiscal impacts of the Minister’s decision are not as significant as originally contemplated, the MD will still be impacted in terms of its revenue generated from these non-residential sources and are likely to require some difficult choices to be made. Minister Allard said the province expects municipalities to absorb the cuts without raising taxes: “I expect them to do all they can to avoid increasing costs to ratepayers”. After the three-year reprieve this issue is expected to be front and center. Minister Allard commented: “the interim deal will allow time for a permanent solution to be reached – after the next provincial election”.

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5.0 BENCHMARKING

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5.1 Census Data

A review of Statistics Canada census data over the past twenty years as shown in Table 25 indicates a steadily declining population in both the Town and the MD. Overall, the population percentage of change for the Town is -9.6% while for the MD it is -12.3%.

Table 25 Town & MD Populations 1996 – 2016 (Source: Statistics Canada Census Data) Year Town Population % Change MD Population % Change 1996 3,316 - 1,829 - 2001 3,150 -5.2% 1,806 -1.3% 2006 3,297 +4.7% 1,856 +2.8% 2011 3,162 -4.8% 1,673 -9.9% 2016 2,998 -5.2% 1,604 -4.1%

Census Canada data also provides the distribution of population by broad age groups. Table 26 shows the number of persons in the 0 to 14 years of age category in 2016 to be 5.5 percentage points lower than in 1996 (24.4% versus 18.9%). The 15 to 64 years of age category is almost unchanged while the 65 and over years of age category has increased from 11.7% to 17.7%. This is statistically significant insofar as: • It is the younger generation that will help sustain the Region into the future. Over this twenty-year period, the Region is showing a significant decline in the youth population which has direct impacts on the types of services demanded/supplied by the community/municipality; • The 15 to 64-year-old persons typically are the wage earners and are the ones that contribute to the economic vitality of a community. And while these wage earners as a percentage of the total have not changed much, in absolute terms they have decreased by 370; and • Even with the overall population of the Region having decreased, the number of retirees has increased which has a direct impact on the kinds of services demanded/required by them. This for example would include health care services, housing for seniors, etc.

Table 26 Distribution of Population by Broad Age Groups 1996 and 2016 (Source: Statistics Canada 1996 & 2016 Census Data) Age 1996 2016 Category Town MD Region % of Town MD Region % of Total Total 0 to 14 770 485 1255 24.4% 535 335 870 18.9% 15 to 64 2100 1185 3285 63.9% 1875 1040 2915 63.4% 65 + 445 155 600 11.7% 590 225 815 17.7% Total 3315 1825 5140 100% 3000 1600 4600 100% (Note: Although the census data for the Town and MD do not exactly match in Tables 25 & 26 the discrepancies are minimal)

These numbers should not come as a shock. The population of rural Canada has been declining as a percentage of the total population since the 1850’s. One of the more significant reasons is the decline in youth populations living in rural areas. Young people are leaving their home communities to access higher education, more variety of lifestyle and to compete for higher paying jobs.

With a downward trend in population growth, the ability of the Fairview Region to realize economic growth and prosperity will be a challenge. As a region shrinks in population, the same typically occurs in other components (e.g. good paying jobs).

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5.2 Economic Outlook

The Conference Board of Canada publishes a quarterly economic forecast. The Canadian Outlook Summary was released June 22, 2020 and provides five highlights: 1. The effects of the COVID-19 have been severe and will result in an 8.2% contraction for the Canadian economy this year – the worst annual contraction on record. 2. At its peak, roughly 3 million Canadians had lost their jobs due to the pandemic. The road to recovery will be long and employment will still be nearly 1.1 million lower for 2020 than it was in 2019. 3. Household consumption is expected to drop 57.5% in the second quarter and is not forecast to return to its pre-pandemic level until the second half of 2021. 4. Exports are forecast to contract by 14.3% in 2020. An 11.3% drop in private sector investment is expected this year. 5. The economy is forecast to rebound by 6.7% in 2021 and 4.8% in 2022. When the threat of the pandemic eases, how well the reopening of the economy and the withdrawal of government support is managed will be a crucial determinant of the economy’s trajectory over the next several years.

In the Financial Post, the following headline appeared on July 27, 2020: “After initial economic rebound, brace for a stall-out phase that could last six to 18 months”. Within the article, Canada’s Central Bank is predicting that the bounce from stimulus and the easing of lockdowns will give way to a more subdued and bumpy recuperation period. “Corporate bankruptcies will pick up pace as owners run out of ways to keep their businesses open amid capacity constraints forced by social distancing. That will weigh on hiring. So will weaker exports and lower commodity prices. The global economy will become fitful, as new outbreaks of COVID-19 force new restraints.”

“One in seven Canadian small businesses (is) now at risk of closing for good”

The above headline appeared in the July 29, 2020 Financial Post. The Canadian Federation of Independent Business conducted a survey in late June of small to medium sized businesses and found that 13% are at least somewhat considering bankruptcy or winding down operations as a result of COVID-19. The same survey found that 19% of Alberta businesses face the risk of going under.

“Alberta’s economy is expected to contract by 8.8% in 2020”

“As a result of the pandemic and decline in oil prices, Alberta’s economy is expected to contract by 8.8% in 2020. This decline is expected to be followed by a partial rebound of 4.6% in 2021”. These projections were made in early 2020. Fast forward to today and with the second COVID-19 wave in full force, these earlier projections may be optimistic.

All this points to a rough and rocky road to economic recovery over the near to medium term. How much of this will impact the Fairview Region remains to be seen. Potential closure of the GPRC Fairview Campus is a sign of the economic realities the region is facing today and potentially into the future.

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5.3 Governance Across Canada

Municipal government reform has occurred in many provinces across Canada over the years, either voluntarily or by provincial legislation. The geographical area, population and local economics are important factors when considering change. Legislative changes are typically considered in an effort to improve efficiencies, sustainability and cost reductions for governance, administration, and the delivery of municipal services.

Each of the ten provinces have different structures and have dealt with reform in different fashions over the years. British Columbia utilizes regional districts to provide regional services to unincorporated rural areas. In Saskatchewan rural and urban municipalities are encouraged to collaborate and cooperate in the provision of services. In 1997 Manitoba required all municipalities to have a minimum population threshold of 1,000 resulting in a decrease from 197 municipalities to 137. In Ontario, rural and small urban municipalities were required to negotiate service delivery utilizing provincial criteria resulting in a reduction of municipalities from 815 to 447. In 2001 a revised Municipal Act was adopted that allowed for regional municipalities. In 2003 Quebec enacted new legislation that required smaller municipalities to amalgamate with larger municipalities. And throughout the Maritimes varying degrees of regionalization (including amalgamations) have been mandated.

5.4 Alberta Legislation

The Municipal Government Act is the provincial statute that provides the basis upon which municipalities function and operate in Alberta. As one of the largest provincial statutes, the Act delineates what municipalities can do. If a municipality wishes to do something that is not addressed in the Act, it is likely “ultra vires” to the statute.

In recent years, the Act has seen some major adjustments to its content. One of the more significant changes involved an updated preamble at the beginning of the Act. Cooperation, collaboration, intermunicipal and regional needs were added into the statements. This updated preamble along with a multitude of new provisions creates a new tone and emphasis on how municipalities are to interact.

Section 54(1) of the Act references providing services into other municipal jurisdictions. This provision allows a municipality to provide any service that it provides within its municipal boundaries to be provided in another municipality but only with the agreement of the other municipality. These intermunicipal agreements are the basis upon which regional cooperation and collaboration is actioned and created.

Part 4 (Formation, Fundamental Changes and Dissolution) of the Act contains provisions as it relates to the formation, change in status, amalgamation, and dissolution of municipalities. The legislation is very prescriptive in nature and outlines the processes required to enact those actions being contemplated. A dissolution occurs when one municipality decides it wishes to dissolve and become absorbed by another municipality. Section 130 of the MGA requires completion of a viability review before a municipality can dissolve. Once the viability review is completed, the Minister may make an order to take any actions the Minister considers appropriate to ensure the viability of the municipality or a vote of the electors is held where the electors vote on whether to dissolve the municipality or not. If the majority of electors decide to dissolve, the Minister must recommend to the Lieutenant Governor that the municipality be dissolved.

The procedure for the amalgamation of two or more municipalities may be initiated by a municipal authority, by two or more municipal authorities in accordance with the regulation, or by the Minister. A report must be prepared which includes the results of direct negotiations and covers off all relevant matters, a description of the public consultation process involved in the negotiations, and a summary of the views expressed during the public consultation process. If the Minister believes that the operation of the municipal authority to be formed by the amalgamation will be more effective or efficient, the Minister may initiate the amalgamation. As part of the process, the Minister may invite comments from anyone affected

Town of Fairview & M.D. of Fairview No. 136 Regional Governance Study 2020 FINAL REPORT 59 and may conduct one or more public meetings to discuss the probable effects. If the Minister still believes an amalgamation is in the best interests of the Region, again the Minister must recommend to the Lieutenant Governor that the municipalities amalgamate. There is no requirement in the Act that a vote of the electors occur.

Part 15.1 (Regional Service Commissions) of the Act covers off all the requirements to establish and operate a commission. When two or more municipalities agree to create a commission, and the Minister agrees, the Minister must again make a recommendation to the Lieutenant Governor in Council to establish the regional services commission by regulation. The regulation creating the commission must specify the commission’s name, identify the member municipalities, and the services the commission is authorized to provide. The regulation may regulate the disposal of assets by the commission and deal with any matter respecting the establishment or operation of the commission. As of June 2020, eighty regional service commissions existed in the Province. Over sixty-five of them provide solid waste, water, and waste-water services.

Other provincial legislation that references governance models include the Cooperatives Act, the Societies Act, and the Companies Act. Each of these pieces of legislation also prescribes the nuances when creating a particular governance style.

5.5 Alberta Government

On April 16, 2019 the UCP formed the provincial government in Alberta. In the eighteen months they have been in power the government has had to deal with a global economic collapse of the oil and gas sector and more recently the COVID-19 Pandemic, both of which have had a profound effect on Alberta’s economic fortunes. It is forecast that by the end of fiscal year 2020/21 Alberta will have an accumulated deficit of almost $100 billion.

Even before the Pandemic became an issue, the government appointed a Blue-Ribbon Panel on Alberta Finances chaired by Janice MacKinnon in May 2019. In September 2019, the findings of the panel were released in their report which is known as the “MacKinnon Panel on Alberta’s Finances”. While the report contains 26 recommendations, it states “Alberta faces a critical financial situation that demands decision action”. The report further states:

“Alberta has a spending problem…”

“Alberta has a spending problem and the government needs to act quickly and decisively to reduce its spending. The province needs to go beyond merely cutting spending to transform the way programs and services are delivered”. The province is using the report to help formulate its priorities and budgetary plans. We are seeing in news headlines how the Government is going about the implementation of these actions.

Most recently at the UCP Virtual 2020 AGM (October 16 & 17), various issues were debated and discussed. Of the thirty resolutions, two related specifically to municipalities. Policy 6 reads: “As a party, we stand united on the following principles that guide our vision for a stronger Alberta: (h) control spending and dramatically reduce the size of government and encourage municipal governments to do the same”. Policy 29 reads: “The UCP believes that the Government of Alberta should: (b) not allow municipal governments to run budget deficits”. Both resolutions passed with a strong majority of the delegates. Notwithstanding these resolutions are not binding on the provincial government, they do send a clear message as to what the rank and file of the UCP membership support and arguably what the province is likely to seriously consider adopting as provincial policy and direction.

The next provincial election is in 2023.

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5.6 Alberta Community Partnership Grant Program

As part of our due diligence, we searched the Alberta Municipal Affairs website and reached out to AMA personnel to obtain their input as it relates to provincial financial support to conduct viability reviews and governance studies, including municipal restructuring.

The purpose of the ACP Grant Program is to help improve the viability and long-term sustainability of municipalities. In 2018/19 the total ACP approved projects amounted to $21.37 million with municipal restructuring projects accounting for $4.29 million. Table 27 provides a listing of the municipal restructuring projects.

Table 27 2018/2019 Municipal Restructuring Projects

Participating Municipalities Project Type Amount Village of Wabamun & Parkland County Regional Governance Study $200,000 Village of Gadsby Infrastructure Audit $120,000 Village of Dewberry Infrastructure Audit $120,000 Village of Cereal Infrastructure Audit $120,000 Village of Bawlf Infrastructure Audit $120,000 Town of Granum Infrastructure Audit $120,000 Town of Grande Cache & MD of Transitional Restructuring $3,300,000 Greenview Activities City of Brooks, Town of Bassano, Village Regional Governance Study $189,231 of Duchess, Village of Rosemary & County of Newell

And while approved projects have yet to be posted to the ACP website for 2019/20 and 2020/21, the ACP budget commitment for 2020/21 is $16.5 million. By comparison, in the 2014/15 fiscal year, there were $48.84 million worth of approved projects. The number of projects and the amount of approved grants has been declining significantly over the past six years.

We are advised by AMA personnel that because many approved municipal restructuring projects in the past did not result in the initiation of a formal application to the Minister, the department has changed its approach in dealing with new applications that involve restructuring. Before a restructuring project that examines amalgamation will be approved, the Minister will now require a formal written notice of the proposed amalgamation. We are led to believe that while additional funding of $100K may be available to undertake amalgamation negotiations between the Town and the MD, a formal written notice of the proposed amalgamation must first take place.

The value of grant approvals has DECLINED 66% in 4 years

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5.7 Alberta Trends

While much of Canada has been mandated to regionalize municipal services, Alberta has resisted that requirement. Interestingly, of the “MUSH” sector (Municipalities, Universities & Colleges, Schools and Hospitals) the province has seen fit to mandate regionalization measures for the other three. Why legislation was not adopted mandating municipalities to regionalize is unknown.

Since the mid 1990’s there has been a growing trend where small urban municipalities have undertaken a viability review. From 1995 to 2020, 78 viability reviews were undertaken because of a public petition, the Council itself asked for one, or the Minister initiated the review. Forty-three reviews did not result in a dissolution either because of a vote of the electors or because Municipal Affairs directives were completed. Conversely, there were 35 reviews which did result in the town or village dissolving and becoming a hamlet within the rural municipality. In 1995 there were 376 municipalities in Alberta, while in 2020 there are 341.

Similarly, there have been 17 regional governance/amalgamation projects since 1995. Most of them were not formal in that they did not give the notice of amalgamation to the Minister. Many used the Alberta Community Partnership Grant Program to undertake these projects. Two additional projects can be added to the list (Turner Valley & Black Diamond have recently voted in favour of an amalgamation study and the Fairview Regional Governance Study) as they are currently underway. Of the 19 projects, 3 have resulted in an amalgamation (Cold Lake/Grand Center – 1995; Drumheller/MD of Badlands – 1996; and Town of Lac La Biche/Lakeland County – 2007).

To further comprehend and understand how these governance studies unfolded and ended up, it is worth providing an overview of one that was successful (Lac La Biche/Lakeland County) and another that to date has not resulted in any further action (Flagstaff Intermunicipal Partnership).

2006 Lac La Biche/Lakeland County Amalgamation

Below is a summary of the information obtained from interviews with representatives from Lac La Biche County (past and present) speaking to the process of the 2006 Lac La Biche Amalgamation that resulted in a vote supporting amalgamation.

In order to better understand the governance review and subsequent amalgamation process interviews were conducted with an Elected Official, Appointed Official and present and former Staff from the former and present County.

The culmination of the process and outcome is described in a statement provided by Mayor Omer Moghrabi from Lac La Biche County:

“Lac La Biche County has seen tremendous benefits since our amalgamation in 2007. Although it certainly is hard work, I believe that other municipalities should do the same whenever the option is available. For one, amalgamated regions speak as a larger group, and can more easily appeal to higher levels of government for funding or legislation that support their goals. As long as all councilors, both urban and rural, remember to work in the best interests of the new municipal entity, decision-making on council is easier, since everyone has similar interests and represents the same community. At the same time, everything that made the smaller communities within your region unique will still exist. By amalgamating, you have simply created a new, more inclusive identity that better supports your municipality’s growth without losing the assets that make you special”.

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“Lac La Biche County has seen tremendous benefits since our amalgamation in 2007. Although it certainly is hard work, I believe that other municipalities should do the same whenever the option is available”

• The appointed Review Committee included two elected Officials plus the CAO’s from the Town and County. The Committee mandate to explore the benefits, real and perceived problems with amalgamation, identify and communicate with interest groups and key personalities with varying views. • A Third-Party individual, a respected long-time resident of the Town was appointed as the Project Lead and Facilitator of the possible municipal restructuring review process. He was recognized as a community champion by the Town and County as he played a major role in bringing the two municipalities together. It also allowed Elected Officials to take a nonpartisan role while the public consultation, data collection and research occurred. • Public consultation was well organized including Town Hall Meetings where interaction could occur with the public. Meetings were facilitated with the objective of win/win and need for change. Consultation also included presentations of trends, pro/cons, and research material through a project website and other public mediums. The need to be open and transparent was important and to take all the time needed to communicate with the public to provide information and researched facts. Research is important. Committee Members were encouraged to not overreact to people’s emotions and to continue dialogue encouraging different points of view. • A structured process was developed with extra funds provided for research. Changes to the process occurred as the project moved forward and evaluation of the various steps occurred. It was important to adjust the process if required and to ensure follow up to questions raised by the public was critical. • The “why amalgamation” and “what is amalgamation” were principle questions and responses that were important milestone decisions in the early stages of the process. The detailed question of “how amalgamation” operations occurred was deemed to be a matter for a later date. • Both Councils had developed a relationship based on trust and common interests. Both the Town of Lac La Biche and Lakeland County recognized that there was a dependence on each other including commerce, utilities and sport and recreation facilities. The urban and rural working relationship goes back over 200 years to the fur trade era. • The view of the supporters of amalgamation was that one municipality would result in cost savings including Administration, legal costs and service operations. • The governance changes to become Specialized Municipalities at Wood Buffalo and Strathcona County were reviewed and identified as success stories. • The final decision and recommendation were based on the principle of good governance for the benefit of all citizens within the Region not a straight Business case. • Maturity of the relationship between the Town and County commenced with numerous operating agreements and the joint funding and ownership of Water and Sewer Facilities which were subsequently operated by the Town. • The principles of good governance and decision making in a collaborative environment with both urban and rural municipalities on side with a political will to move forward with change was of critical importance to the process. • The final decision to amalgamate was based on the principle what was best for the Region not a straight Business Case. • The Elected Officials relationship needs to be based on the view that both urban and rural issues are equal and can be addressed by being upfront, building trust and ensuring transparency. • The County had the financial resources and agreed to cover the costs of the outstanding Town infrastructure debt.

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• Town Council was willing to give up powers by having 2 Elected Officials from the urban area and 6 Elected Officials from the rural area and Hamlets with the Mayor elected at large. • There were no tax rebates to the tax structure change as a result of amalgamation. • Staff retention was a key issue during the process and the Council’s made a commitment that no Staff would lose their jobs, as a result, operational efficiencies were not immediate. An Organizational Structure and Transition Plan was developed identifying existing Staff and equipment resources, office space locations and other operational matters. A Key point, efficiencies come with time. • It was recognized that Lakeland County had the financial resources and the Town of Lac La Biche had compiled significant debt with the need for future infrastructure improvements, a major change in the governance model was required. As result the Town would have to compromise. • The Town of Lac La Biche compromised to ensure that amalgamation occurred in order to access resources for the entire region. The compromise included a Governance Model with a reduced number of Urban Elected Officials and Mayor Elected at Large. In return the new municipality would absorb all of the Town debts. The need for trust and honesty that decisions would be based on the needs of the entire County not specific Divisions or Wards was vitally important. • After the research and consultation process was completed, the Councils of the Town of Lac La Biche and Lakeland County approved motions to proceed to a vote of their respective residents. • The results of the vote: Lakeland County 53% - In Favor; Town of Lac La Biche Vote 93% - In Favor. The two municipalities then proceeded in accordance with the provincial legislative requirements to create a municipal district entitled Lac La Biche County and the appointment of an Interim Council and Interim Chief Administrative Officer to be ratified after the next Municipal Election. • The Amalgamation has resulted in lower Business and Residential Taxes which supports the operations of existing business and in attracting new business and development resulting in benefits to the entire region. • The question of “Why” amalgamation occurred was answered by receipt of urban and rural Business Community support, reduced overhead costs to operate the municipality, access to an improved and more sustainable tax base, economic development opportunities that would be more successful as a Region. • It was important to have full disclosure of all assets of the Town of Lac La Biche and Lakeland County. Reports were prepared identifying future needs and Project Priorities. • As the Leader of the County Council, the Mayor has taken the approach to have Council Members work as a Team for the benefit of the entire community not individual Wards. The Mayor continues to reinforce this philosophy with Council Members and the community. The Council Code of Conduct signed by all Members reflects this approach. The Mayor indicated that occasionally there’s pushback that he directly addresses issues with a supportive approach to determine what is best for the Region. • Council Orientation Sessions are held prior to and after the Council Elections where an emphasis is placed on roles and responsibilities of Elected Officials and using the Team approach in the decision-making process. • Since amalgamation has occurred over $200M of infrastructure improvements have been constructed including recreation facilities, roads, and municipal infrastructure. • The County Administration Offices are located in the urban center and the Operations Building in the rural location. • Specialized Municipality status was implemented twelve years after the amalgamation, the feedback was that it should have occurred at the outset. The benefits are to preserve the split mill rate and to enlarge the Urban Services Area.

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2014 Flagstaff Intermunicipal Partnership

Intermunicipal cooperation in the Flagstaff County region has been longstanding. The Flagstaff Intermunicipal Partnership included eight municipalities at the time of the final report: Flagstaff County, Daysland, Hardisty, Killam, Alliance, Forestburg, Heisler, and Lougheed. The process was initiated in 2014 and finalized in 2020 with no further action. The summary of the Project was provided by the Project Coordinator who was also a CAO for one of the Partner municipalities.

• A Partnership of eleven municipalities commenced in 2003 and at the time included the Town of Sedgewick, Villages of Galahad and Strome. The two Villages subsequently completed viability reviews and dissolved to Hamlets within Flagstaff County. • After regional governance was identified in the 2014 Flagstaff Intermunicipal Partnership Strategic Plan a process commenced with the objective to collaborate and interact with each of the communities to achieve long term sustainability as a regional community. The Town of Sedgewick withdrew from the Partnership in 2018. • Supportive reports and actions were completed including a Public Engagement and Consultation Process, Communications Strategy, Operations and Transition Plan, Level of Service Plan, and an Underground Infrastructure Assessment with a total expenditure of $770,000. • In January 2020 Flagstaff County, the Town of Killam and the Town of Daysland chose not to move forward with amalgamation. The Town of Hardisty, and Villages of Alliance, Forestburg and Lougheed chose to move forward. As a result of the withdrawal of Flagstaff County Council it was determined by the remaining interested municipalities to not proceed with formal notice of a proposed amalgamation. • The involvement of a number of municipalities with varying opinions made it difficult to develop consensus. The outcome can be attributed to the lack of trust among the municipalities and uncertainty of such a significant change to the municipal governance structure for the region.

Notwithstanding these reviews and studies, intermunicipal cooperation and collaboration have existed for decades throughout Alberta with many examples of bi-lateral and multi-lateral agreements in force and effect. Many of these agreements were much less formal and often were a verbal arrangement or an understanding. Most recently, changes to the MGA required municipalities with a coterminous boundary to enter into an Intermunicipal Collaboration Framework (ICF) which requires the formalization of all intermunicipal agreements/arrangements. Municipalities will now be able to show how and where they cooperate and collaborate in the delivery of existing services and the framework for future discussions.

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5.8 Municipal Comparators

As part of our benchmarking review we believe there is merit in showing municipal comparators as part of this review. When deciding what municipalities to compare against there are many criteria that can be used. Typically, we look at those that are similar in size and have similar budgetary constraints. During Phase 2 of this project, the TSI team provided a technical report update to both Councils on October 1, 2020 (Appendix 5). At this time, we heard some concerns in regard to the municipal comparators contained in that presentation. As a result, both CAO’s forwarded a listing of municipalities they felt were most appropriate. The MD submitted five comparators while the Town submitted two listings: one containing ten comparators and the other containing eleven comparators. TSI then adjusted the comparators it used to what the MD submitted and chose five comparators from the two listings submitted by the Town.

We have extrapolated data from Alberta Municipal Affairs website and those of each of the comparators to compare various criteria in order to show how the MD and Town stack up against five other municipalities. We present that data in the form of six tables breaking down the criteria into a statistical profile, finance & debt limit profile, property tax rates & assessment profile, an elected official & actual expenditures profile, and consolidated expenses by object profile. To help further delineate the comparisons we use various ratios and percentages.

The following pages will go in-depth on each of these comparators.

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Table 28 2019 Statistical Profile Analysis

Open Ratio Full-Time Ratio Area of Water Wastewater Number of Ratio Roads Open Municipality Population Municipal Population Municipality Mains Mains Length Dwelling Dwelling Units Maintained Roads to Positions to FTMP's (Mi2) Length (km) (Km) Units to FTMP's (km) FTMP's MDs Birch Hills 1,553 22 71 1,123 1,368 62.18 51 7 661 30 Fairview 1,604 23 70 548 887 38.57 342 9 821 36 Northern Lights 3,656 33 111 7,441 1,934 58.61 506 7 1,691 51 Peace 1,747 11 159 353 560 50.91 214 4 648 59 Smoky River 2,023 38 53 1,116 1,784 46.95 398 4 845 22 Spirit River 700 11 64 265 605 55.00 - - 316 29 Towns Athabasca 2,965 18 165 7 53 2.94 34 51 1,341 75 Black Diamond 2,700 22 123 3 36 1.64 30 28 1,130 51 Fairview 2,998 23 130 4 50 2.17 45 41 1,470 64 Fort McLeod 2,967 30 99 9 48 1.60 52 41 1,414 47 Gibbons 3,159 20 158 4 28 1.40 28 23 1,244 62 Grimshaw 2,718 19 143 2 45 2.37 38 30 1,210 64

Highlighted in the blue columns in Table 28 are the comparative ratios. The first ratio compares population to FTMP’s.

The MD has a 70:1 ratio which is in the middle of rural comparators. The Town has a 130:1 ratio which also is in the middle of the urban comparators. With the exception of the MD of Peace, the rural municipalities have more staff to population than the urban municipalities.

The next ratio compares open roads maintained to FTMP’s. In this instance the MD has 38.57 km of road for each FTMP. Compared to the other rural municipalities this is the lowest meaning the MD has more staff per km of road. Because the urban municipalities have minimal km of roads compared to the rural municipalities, this comparator is deemed less significant for the urban municipalities. Notwithstanding, the Town is again in the middle of its urban comparators.

The final comparison shows the number of dwelling units to FTMP’s. Both the MD and Town again fall into the middle of the pack with their respective comparators.

The relevance of the data and ratios is to show how the MD and Town compliment of personnel rank using full time staff members as the common denominator. The fact that AMA identifies these statistics in its municipal profiles suggests, these are the meaningful measurement criteria that can be readily examined to compare all municipalities in the province.

67 Table 29 2019 Finance & Debt Limit Profile

Unrestricted & Restricted Equity as a 2019 Equity in Debt Unrestricted Restricted Surplus as a Percentage of Actual Municipality Accumulated Tangible Servicing Surplus Surplus Percentage of Accumulated Servicing Surplus Capital Assets Limit Accumulated Surplus Surplus

MDs Birch Hills $ 55,472,878 $ 5,633,809 $ 17,861,992 $ 31,977,077 42% 58% $ 1,686,683 $ - Fairview $ 28,629,389 $ 1,177,457 $ 7,039,917 $ 20,412,015 29% 71% $ 1,558,823 $ - Northern Lights $ 125,223,758 $ 4,731,845 $ 35,679,110 $ 84,812,803 32% 68% $ 4,837,683 $ 1,508,700 Peace $ 22,804,456 $ 1,698,870 $ 8,054,357 $ 13,051,229 43% 57% $ 1,033,973 $ - Smoky River $ 64,670,345 $ 699,739 $ 11,464,587 $ 52,506,019 19% 81% $ 2,915,096 $ 236,160 $ $ 33,950,669 $ 11,082,228 $ 22,868,441 33% 67% $ 1,061,965 $ - Spirit River - Towns Athabasca $ 33,369,410 $ 820,348 $ 2,240,480 $ 30,308,582 9% 91% $ 1,894,480 $ 552,632 Black Diamond $ 44,759,959 $ 1,257,945 $ 9,273,523 $ 36,744,381 18% 82% $ 1,640,466 $ 176,138 Fairview $ 42,063,997 $ 605,120 $ 5,060,613 $ 36,398,264 13% 87% $ 1,830,309 $ 320,334 Fort McLeod $ 56,046,679 $ 1,920,032 $12,597,804 $ 41,528,843 26% 74% $ 2,790,742 $ 511,191 $ $ 31,901,807 $ 1,195,145 $ 30,706,662 4% 96% $ 1,743,360 $ 745,490 Gibbons - Grimshaw $ 30,123,685 $ 2,526,279 $ 2,949,293 $ 24,648,113 18% 82% $ 1,404,912 $ -

Table 29 shows each municipality’s accumulated surplus along with how that surplus is broken down. The percentage columns reflect what portion of the accumulated surplus is in unrestricted and restricted reserves, and what portion is equity in tangible capital assets.

The MD has the second lowest amount of unrestricted and restricted surpluses at 29% while the Town is in the middle of the urban municipalities at 13%. The Actual Servicing column shows the amount of debt each municipality incurred during 2019.

It is worth noting, that these numbers simply reflect where each municipality is positioned at the end of 2019. They are subject to considerable change at any given point in time depending upon the spending and debt incurred by each jurisdiction. Notwithstanding, the takeaway from this indicator is that the rural municipalities seem more inclined to have little or no debt while the urban municipalities all have some debt albeit nowhere near their debt servicing limit.

68 Table 30 2019 Property Tax Rates & Assessment Profile

2020 2020 2020 2020 Non- 2020 Res/Farm Non-Res Res 2020 Equalized Municipality Res Live Assessment Live Live Mill Assessment Mill Total Assessment Assessment Rate Rate Percentage Percentage

MD's Birch Hills 10.7395 20.0533 $ 294,472,630 35% 65% $ 303,244,876 Fairview 9.0000 21.5000 $ 333,057,380 52% 48% $ 347,675,594 Northern Lights 6.2016 14.0093 $ 1,307,404,450 32% 68% $ 1,342,530,030 Peace 5.2207 14.9331 $ 318,810,680 53% 47% $ 288,766,660 Smoky River 5.3000 16.9080 $ 524,570,520 45% 55% $ 539,409,107 Spirit River 7.2000 15.5270 $ 227,807,580 31% 69% $ 231,729,689 Town's Athabasca 8.1862 16.6816 $ 356,349,920 72% 28% $ 371,984,597 Black Diamond 7.4030 8.5350 $ 383,454,400 89% 11% $ 391,936,345 Fairview 9.7500 14.4500 $ 292,155,159 76% 24% $ 291,433,709 Fort McLeod 6.2278 12.2070 $ 371,488,550 71% 29% $ 357,978,450 Gibbons 6.7540 15.1538 $ 381,984,200 92% 8% $ 375,485,082 Grimshaw 8.7607 11.9794 $ 242,769,270 81% 19% $ 254,390,312

With a mill rate of 9.000 for residential, the MD has the second highest amongst the five rural comparators, while its non-residential mill rate is the highest at 21.5000 as shown in Table 30.

The Town residential mill rate of 9.7500 is the highest amongst the urban comparators while its non-residential mill rate is in the middle of the pack.

The percentage splits between residential/farmland and non-residential indicate the MD has an almost equal split (52/48) which compared to the other rural municipalities is towards the higher end.

The Town has a 76/34 split which is again middle of the pack in the urban comparisons. The equalized assessment comparison shows both the MD and Town are neither the highest nor the lowest.

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Table 31 2019 Elected Official & Actual Expenditures Profile

2019 Elected 2019 Elected Live 2019 2019 Elected Official Official Assessment to 2019 2019 Taxes Elected 2019 Live Net Municipality Official Salary & Salary & Salary & Elected Official Actual Budget as a % of Officials Assessment Total Municipal Benefits Range Benefits Benefits Salary & Expenditures Expenditures Taxes Total Average Benefits Ratio

MDs Birch Hills 7 $12,016 - $21,938 $ 112,895 $ 16,128 $ 335,420,280 0.000337 $ 10,004,124 $ 4,931,384 49.29% Fairview 5 $33,920 - $53,822 $ 229,153 $ 45,831 $ 333,061,620 0.000688 $ 7,165,620 $ 5,285,000 73.75% Northern Lights 7 $16,952 - $53,254 $ 234,225 $ 33,461 $ 1,351,602,290 0.000173 $ 18,957,461 $ 15,462,404 81.56% Peace 5 $25,596 - $39,143 $ 167,026 $ 33,405 $ 318,803,380 0.000524 $ 3,951,741 $ 2,987,393 75.60% Smoky River 6 $30,586 - $36,861 $ 195,257 $ 32,543 $ 539,145,280 0.000362 $ 14,151,670 $ 7,169,270 50.66% Spirit River 4 $24,497 - $36,124 $ 115,047 $ 28,762 $ 234,412,850 0.000491 $ 4,905,463 $ 3,036,562 61.90% Towns

Athabasca 7 $13,050 - $22,967 $ 129,960 $ 18,566 $ 363,670,380 0.000357 $ 9,440,413 $ 3,975,423 42.11% Black Diamond 7 $14,976 - $23,461 $ 125,275 $ 17,896 $ 384,944,610 0.000325 $ 7,227,196 $ 2,977,317 41.20% Fairview 7 $9,562 - $15,250 $ 84,507 $ 12,072 $ 291,416,988 0.000290 $ 7,779,938 $ 3,217,006 41.35% Fort McLeod 7 $14,964 - $23,731 $ 123,925 $ 17,704 $ 360,050,650 0.000344 $ 8,750,401 $ 2,822,392 32.25% Gibbons 7 $18,425 - $28,944 $ 149,453 $ 21,350 $ 379,197,090 0.000394 $ 8,126,291 $ 2,752,954 33.88% Grimshaw 7 $3,917 - $10,404 $ 47,479 $ 6,783 $ 333,025,310 0.000143 $ 5,921,469 $ 2,367,300 39.98%

Table 31 shows not only the number of elected officials and their range of salary & benefits, but also shows an average per elected official.

In this context, the MD is significantly higher than all of its rural comparators while the Town is at the lower end of the urban comparators. The live assessment to elected official salary & benefits ratio for the MD shows the MD again is the highest.

Conversely the Town is second lowest against its urban comparators.

The final column shows what percentage municipal taxes are of actual expenditures. The rural percentages are much higher than the urban percentages indicating that the rural municipalities rely upon property taxes more to cover their expenditures than do urban municipalities. In both instances, the MD and the Town are mid-range.

70 In Tables 32and 33, 2019 Consolidated Expenses by Object are shown for both rural and urban comparators. These are the expenses as of December 31, 2019 and can vary considerably from year to year.

Table 32 2019 Consolidated Expenses by Object Profile -Rural (rounded to the nearest 000’s)

Total expenses for 2019 indicate the MD (just over $7M) is in the middle of the pack. Northern Lights is the highest at almost $19M while Peace is the lowest at almost $4M.

Looking at salaries, wages & benefits as a percentage of the total expenditures, the MD (at just over $2.6M) is the highest at almost 37%. The next closest is the MD of Peace at just over 32%. And combining all transfers, the MD is second highest at 10.51% of total expenditures. The average between the six rural comparators is 6.95%.

71 Table 33 2019 Consolidated Expenses by Object Profile (Urban)

Total expenses for 2019 indicate the Town (just over $7.2M) is in the middle of the pack. Athabasca is the highest at almost $9.5M while Grimshaw is the lowest at almost $6M.

Looking at salaries, wages & benefits as a percentage of the total expenditures, the Town (at almost $2.4M) is the second lowest at just over 30.5%. However, the separation between this and where most of the comparators fall is not that much different. And combining all transfers, the Town is near the bottom at .61% of total expenditures. Notwithstanding there are two comparators that are zero, the average between the six comparators is 3.97%.

All the data contained in Tables 28 thru 33 reflect a snapshot in time and how the comparators stack up against one another.

Aside from the statistical references shown in the aforementioned Tables, noteworthy to the conversation is how often dissolution and amalgamation discussions/actions have arisen with the comparators. Table 33 below shows two dissolutions (Eaglesham and Wanham) have occurred while four viability reviews/amalgamation studies were conducted but did not occur.

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Table 34 Municipal Comparators Dissolution and Amalgamation Actions (Source: Alberta Municipal Affairs staff)

Municipality Year Action Initiated Municipality(s) Outcome Notes MDs Regional Town of Fairview Study in Initiated by both Fairview 2020 Governance & MD of Fairview progress Councils Study Birch Hills 1996 Viability Review Village of Village Initiated by Eaglesham Eaglesham dissolved Council

Birch Hills 1998 Viability Review Village of Village Initiated by Wanham Wanham dissolved Council

No towns or villages are now located within Birch Hills County

Peace 2015 Viability Review Village of Berwyn Stopped Initiated by Berwyn after a vote Council

Smoky River 2008 Viability Review Town of Fahler Stopped Initiated by Fahler after a vote Council Towns Fairview 2020 Regional Town of Fairview Study in Initiated by both Governance & MD of Fairview progress Councils Study Athabasca 2003 Amalgamation Town of Vote held Initiated by both Athabasca & and did not Councils. Town residents County of amalgamate voted in favour while Athabasca County residents voted against amalgamation

Whether it be these comparator municipalities or municipalities across the province, it is clear, more and more municipalities are examining how municipal services and programs can be delivered in the most efficient and effective manner.

The municipal landscape is rapidly changing due to external influences such as COVID-19 and possible changes to oil and gas property assessment. Municipalities that embrace these changes and adjust their service and program delivery systems will be the municipalities best equipped moving forward with a sustainable future.

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5.9 Curent Collaborative Initiatives & Joint Services

A summary of all MD and Town documents reviewed is shown in Appendix 3. While each document has important data and information, five stand out in regard to governance and collaboration.

1. Intermunicipal Collaboration Framework The ICF between the Town and the MD was agreed upon at the beginning of 2020. Contained within the framework are those collaboration arrangements the Parties have agreed upon. Included are: a) Joint Volunteer Fire Dept. b) FCSS c) Animal Shelter d) Library e) EEO Community Hall f) Medical Clinic Operating Society g) Health Professional Enhancement Committee h) Airport i) Recreation j) Joint Emergency Management k) Heart of the Peace Economic Development l) Cemetery m) Water Supply n) Water/Wastewater operations o) Arts, Culture and Tourism p) Public Works Services – reference to MD supplying road maintenance services and Town supplying street sweeping services

These agreements/arrangements further demonstrate the symbiotic relationship between the MD and the Town when it comes to cooperation and collaboration.

2. Integrated Community Sustainability Plans In June of 2020, Town Council updated and approved its “Integrated Community Sustainability Plan 2020 – 2022”. The Plan targets goals, strategies, costs, and outcomes related to Governance, Financial/Economic Development, and Social/Culture activities. The MD in May 2020 updated and approved its “Integrated Community Sustainability Plan”. The MD Plan targets strategies, activities, costs, and target dates for twelve different goals: Administration, Emergency & Protective Services, Infrastructure – Water & Wastewater Systems, Infrastructure – Roadway Systems & Bridges, Gravel Services, Airport Services, Agricultural Services Board, Cemeteries, Tourism Recreation & Culture, Development & Land Use Planning, Economic Development, and Equipment Purchases.

Both Plans articulate a similar mission statement (the MD mission statement is embedded within its vision statement) related to being fiscally responsible, having a safe, sustainable, and growing community, providing a high quality of life and service while maintaining a strong sense of community pride. And while most of the reasons why the Town and why the MD both exist align with one another, it can be argued both municipalities are experiencing significant challenges that are preventing them from achieving those things they have identified as being important.

3. Intermunicipal Development Plan In September 2019 both municipalities gave third reading to an IDP Bylaw. Section 1.1 (Purpose) states:

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“The overarching goal of the Fairview IDP is to establish a regional framework for managing land use, growth and development within what has been defined as the IDP (or Plan) Area. The benefits of adopting this IDP include: 1. Ensuring optimal use of land within the Plan Area; 2. Minimizing the prospect of incompatible land uses and developments within the Plan Area; 3. Identifying and protecting environmentally and economically significant lands, to promote sustainable development; 4. Facilitating a collaborative approach to land use planning and development decision-making; 5. Promoting a regional lens to land use planning and service delivery; and 6. Strengthening the existing intermunicipal relationship.”

Both Councils have subscribed to the above six benefits with a reference to “collaboration”, “a regional lens” and “strengthened intermunicipal relationship”. The significance of these references demonstrates both municipalities are committed to maintaining a harmonious relationship that portrays future development in a regional context.

4. Municipal Development Plan Both the MD and the Town have adopted MDP Bylaws. MD Bylaw 868 was adopted in June 2008, while Town Bylaw 1003-DP-2013 was adopted October 2013. As both are required statutory documents per the MGA, both Plans address the mandatory requirements as well as touch on areas that are discretionary. The MD Plan identifies as its overall goal “to provide opportunities for economic development to encourage growth” with agriculture being its most important activity. The MD Plan also identifies as one of its goals to “encourage good communication channels with neighbouring municipalities”. Similarly, the Town Plan stipulates as one of its goals “to maintain mutually beneficial relationships with neighbouring municipalities, authorities and other agencies in the region”. Reference is also made to the “Cooperative Delivery of Services” and the goal “the Town shall continue to cooperate with neighbouring municipalities, other agencies and non-government organizations to explore cost- effective ways of delivering municipal services, recreational services and the development of recreational facilities that will benefit taxpayers”.

In both MDP’s, each municipality has articulated the importance of communications, cooperation, and relationships with each other. Each recognizes that they cannot function in isolation and have developed their respective priorities recognizing the importance in keeping the other party informed and often involved in their growth and development.

5. Municipal Growth Plan The Town has in place their “Municipal Growth Plan 2019 -2023” which includes the current strategic plan, current operational budget, three-year operational budget, five-year capital budget, and items that may need to be considered for future sustainable development. The Plan indicates there are five factors likely to influence the Town’s future growth in the next five years. Those factors include: • Stabilization & Recovery of Oil & Gas Sector; • Agriculture; • Prism Diversified; • Grande Prairie Regional College; and • MGA & Statutory Plan requirements.

While the MD does not have a comparable document, much of the same information is found in their Integrated Community Sustainability Plan.

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6.0 GOVERNANCE MODELS

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There are a number of possible governance models that could be adopted to address enhanced municipal cooperation and collaboration. Governance options should be looked at as a spectrum of opportunities in whole or part. On the far left of the continuum there are wholly autonomous municipalities; on the far right is the ultimate in collaboration: amalgamation of two or more municipalities. In between are a variety of options in which local authorities can address specific areas or whole-of-governance approaches. Below provides a visual depiction of how these models might appear on a horizontal continuum. With the exception of the Regional Municipality and amalgamation models, all of the options preserve the existence of separate independent municipalities with varying degrees of collaboration and cooperation.

Municipal Collaboration & Cooperation Continuum

In the publication “Governance Options for Municipal Regional Services in Alberta” (produced by Government of Alberta), seven governance models are identified and explained. An eighth option was added relating to Growth Management Boards and is covered in Part 17.1 of the Municipal Government Act. Shown on the next page in Table 35 are some of the provisions relating to each of the various models. While any one of these models is a potential option to improve collaboration and cooperation between the MD and the Town, six of them (Municipal Controlled Corporation; Cooperative; Society; Part 9 Company; Public Private Partnership; and Growth Management Board) are deemed inappropriate as they are the least likely to be embraced or improve the existing delivery of municipal services. That leaves two models (Intermunicipal Agreements and Regional Services Commission) for further review and analysis. For the purposes of our analysis, we will categorize our viable options into three categories: status quo; enhanced inter-municipal collaboration; and amalgamation. All three are reviewed in the next section of this report.

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Table 35 Governance Options for Municipal Regional Services in Alberta Inter- Regional Municipal Growth Part 9 Public Private Municipal Services Controlled Cooperative Society Management Company Partnership Agreement Commission Corporation Board Separate legal entity X X X X X X X Can borrow and incur debt servicing X X X X X X costs Can directly expropriate land X Can make a profit and distribute to X X X members Requires provincial government X X X X X X X approval for establishment Ministry/parties Municipalities Municipal responsible for Municipalities Municipal Affairs Service Alberta and Partners Affairs establishment Legislation Cooperatives Societies Companies restricting types of MGA MGA Act Act Act services provided

• Regional services commissions are restricted to providing services as described by the commission’s regulation. • Municipal controlled corporations may be owned by a municipality or group of municipalities and provide services to a region. • Societies are restricted to any benevolent, philanthropic, charitable, provident, scientific, artistic, literary, social, educational, agricultural, and sporting activities. • Part 9 Companies are restricted to promoting art, science, religion, charity, and recreation activities. • Public-private partnerships may be a separate legal entity depending on the partnership agreement. • Regional services commission is the only governance option that can directly expropriate land. Expropriation of land for inter-municipal agreements, municipal controlled corporations, Part 9 companies and societies may be completed by a municipality who is a member of that organization to enable that organization to carry out a development.

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7.0 VIABLE MUNICIPAL OPTIONS Analysis

7.1 Option 1- Status Quo

As the name suggests, this option involves no change in the governance structures of the MD and Town. Both municipalities would continue delivering the programs and services that, in the opinion of each council, are necessary or desirable for all or a part of their respective municipality.

While programs and services are provided independently by each municipality, there are many examples of services being provided vis-à-vis bi-lateral and multi-lateral intermunicipal agreements, by societies (e.g. Agricultural Societies and Community Associations), and by a regional service commission. Between the MD and Town there are thirteen intermunicipal agreements (shown in Appendix 4). In each instance, the MD and/or Town continue to exercise their jurisdictional authority and can withdraw from the agreement pursuant to the withdrawal provisions as contained in each agreement. As long as both the MD and Town mutually believe the agreement provides value to one another, the agreement is likely to prevail.

There are two Agricultural Societies and many community associations each responsible for providing specified community services. In many instances either the MD or Town or both provide financial assistance or support to assist with the service delivery. Notwithstanding, as separate legal entities, these organizations are autonomous and have the ability to determine their purpose and how they will deliver their services. However, because of their existence, and willingness to provide specified services, this helps address the demands for services that the municipalities often are requested to provide were it not for these not-for-profit organizations.

The North Peace Regional Landfill Commission is an example of cooperation and collaboration between four municipalities (the MD, the Town, Clear Hills County, and the Village of Hines Creek). In this instance all four municipalities have entrusted a separate legal entity with requisitioning power, to provide a landfill service. In doing so, each municipality has relinquished its control to deliver solid waste services to the Commission.

Each of these examples and governance structures, illustrates that the provision of programs and services for public consumption can be accomplished using a variety of methods and models. The most common governance structure is through the use of intermunicipal agreements. Whether additional agreements can be agreed upon for new services remains to be seen. Under this governance model, both municipalities continue to exist and play a role in the determination of their community’s future.

Here are the advantages and disadvantages of this governance model:

Advantages Disadvantages • Requires no changes to current style of • Duplication of services continues to prevail governance • Staff recruitment challenges continue to exist • Still allows for new intermunicipal arrangements/agreements on a bi-lateral or • Independent municipal corporations result in multi-lateral basis added operational and capital costs that could otherwise be significantly reduced if services • Maintains good paying jobs for municipal were consolidated employees and contractors • Additional time required negotiating and administering intermunicipal agreements

This style of governance still allows for new intermunicipal agreements/arrangements such as a mutual aid agreement. While mutual aid agreements are common across Alberta in emergency/fire services, they can also be adopted elsewhere. The Town of St. Paul and St. Paul County have a mutual aid

Town of Fairview & M.D. of Fairview No. 136 Regional Governance Study 2020 FINAL REPORT 80 memorandum of understanding for various transportation services. When the Town requires something from the County and the County requires some help from the Town, both parties have agreed to help one another out. Subject to having the technical expertise and/or applicable equipment, when one party needs help that the other party can provide, the exchange of service is tracked and reconciled at the end of the fiscal year.

In summary, status quo indicates both municipalities continue to function and operate, with no impact to level of service or financing of said services. If any new intermunicipal services or programs are agreed upon, those agreements do not constitute or require a change in this style of governance.

7.2 Option 2 – Enhanced Inter-Municipal Collaboration

Under this governance style, intermunicipal cooperation and collaboration is taken to a higher level than the status quo model. Using the various governance styles outlined in the continuum shown on page 77, three models are presented for consideration and review:

1. Regional Authority/Council; 2. Contract for Service; and 3. Regional Services Commission.

In all three instances the development of an agreement or regulation that specifies the terms and conditions upon which the arrangement will function is required.

Regional Authority/Council Under this form of governance, a regional authority is created which usually requires one of the participating municipalities to be the host vis-à-vis the agreement. The regional authority assumes full responsibility for delivery of the program(s) and/or service(s) and has its own organizational structure. Representation on the regional council typically consists of elected officials from the participating municipalities. In some instances, public members at large may also be incorporated. The service usually is singular in nature. This however does not preclude the ability to have multiple services included if the participating parties agree. A regional council could for example have jurisdiction over and make decisions on FCSS, the Airport, Cemeteries, Fire Services, Parks & Recreation, and whatever other services both municipalities mutually agreed upon.

Here are some of the advantages and disadvantages of a regional authority/council:

Advantages Disadvantages • Eliminates duplication of those programs and • Requires the creation of an administrative services the authority is given jurisdiction to oversight/organization to deliver program(s) provide and/or service(s)

• Any property or assets typically remain with • Risk and liability remain with the municipalities the participating municipalities • Most often does not result in financial cost • Relatively easy to withdraw if required savings

• Reduces the amount of service provided by each independent municipality

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There are many examples of regional authorities operating in Alberta today. One of the more common is a regional landfill/solid waste authority. In these instances, one of the municipalities usually steps forward to provide the service and most often designates certain employees as being responsible to provide the service. For example, the Town of Redcliff and Cypress County have created the Redcliff Cypress Regional Waste Management Authority. The Town of Redcliff provides the administrative oversight and has assigned various Town employees to provide the service. Administrative oversight is provided to a Board consisting of elected official from both municipalities. Both municipalities pay towards the operating costs of the service and both municipalities are joint owners of the landfill property.

Contract for Service This form of inter-municipal agreement involves one municipality agreeing to provide a specified program/service to the other on a fee for service basis. The supplying municipality accepts full responsibility for providing the level of service the requesting municipality requires. This could be in the form of multiple contracts for multiple programs/services, or it could be a single contract for service involving one or more programs/services.

The advantages and disadvantages of this model include:

Advantages Disadvantages • Becomes one less service the requesting • May involve cost consequences the requesting municipality must administer and manage municipality cannot afford

• Expertise and manpower may not be • Requesting municipality now relies upon another readily available in the requesting jurisdiction to provide the service municipality • Time to prepare and administer the contract • Simple fee for service

• Municipalities who have difficulty in recruiting and resourcing the human capital are still able to provide the service to their residents

• Potential for increased service level

This governance arrangement can also be found throughout the Province. The Town of Bruderheim has a contract for CAO services and bylaw enforcement services from Strathcona County. The County has assigned a County employee to perform CAO duties and responsibilities. Any bylaw enforcement assistance also has County peace officers responding when required. This arrangement involves a fee for service which Bruderheim has paid to Strathcona for over two decades.

Regional Services Commission The creation of a regional services commission is the creation of a legal entity with requisitioning powers. Two or more municipalities must agree that the provision of a specified service(s) is more efficient, and effect using the commission model and make application to the Minister of Municipal Affairs. Under this form of governance, the participating municipalities agree to relinquish to the commission, all service delivery. The participating municipalities are also agreeing that the commission can bill them for the cost of providing the service with no recourse on the amount.

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Here are some of the advantages and disadvantages of a regional services commission:

Advantages Disadvantages • Separate legal entity • Loss of autonomy

• Reduces duplication of service resulting in • Participating municipalities cannot refuse the cost efficiencies and savings requisition

• Participating municipalities continue to have • Potential for increased costs due to the the ability to influence decision making establishment of a separate organizational processes vis-à-vis their appointed structure representatives • The Province (vis-à-vis the Minister of Municipal • All risk and liabilities related to the service Affairs) determines and sets all the rules around are transferred to the commission operations and governance

As of June 2020, there were eighty regional service commissions in Alberta with more than 75% of them providing water, wastewater, and solid waste services. An example of a regional services commission that provides more than one service is the Cold Lake Regional Utility Services Commission. This commission consists of the following members: City of Cold Lake, Cold Lake Indian Reserve No. 149, Cold Lake Armed Forces Base, and the MD of Bonnyville No. 87 and provides water and waste- water services to its members.

Commissions have been created for airport services, assessment services, emergency/fire services, and transit services.

A “Super Regional Services Commission” is a potential offshoot that consolidates multiple services into a single governance entity. While very few of these exist, Part 15.1 of the MGA prescribes all the requirements. The services listed in the “Regional Authority/Council” example could be grouped together to create the super commission.

From a level of service perspective, a regional council could lead to fewer advisory committees, yet still provide effective governance oversight of many programs. Policies developed could help staff become more efficient, without having to wait to two councils to make decisions.

Contracting staff from one municipality to another, such as in health and safety or utility billing, would lead to efficiencies. In the most extreme case, another commission could be created, in water & sewer utilities, and possibly solid waste. Due to a relatively low population in the overall area, a commission with its own board of directors may not be worth the cost.

Savings can be achieved when two municipalities work together through enhanced inter-municipal collaboration. Municipalities provide similar services and require similar supplies and contracted services.

Working together, they can achieve economies and savings. Some examples are: • Holding joint staff training sessions • Joint purchasing of items such as road maintenance materials, tools, equipment and office supplies. • Combining the scope of work for contracted services to achieve a better price, such as residential garbage collection, information technology and software maintenance. • Joint tendering of capital projects and capital equipment replacement.

The Town and MD already work together for some services under formal agreements or bylaw, but there are more opportunities to work together to achieve savings.

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7.3 Option 3 – Amalgamation

Amalgamation is the merging of two or more municipalities into a single municipality. In the continuum shown in Table 11, we have referenced the establishment of a regional municipality. While a regional municipality is not a recognized type of municipality, the name does suggest the municipality has regional significance.

Section 77 of the Act specifies the types of municipalities that may be formed. There are five: municipal district (MD), village, town, city and specialized municipality. Note that an MD and a County are the same governance structure, simply just a different name. The Act further indicates under what conditions each type of municipality prevails. When an urban jurisdiction and a rural jurisdiction combine, there are only two types of municipalities that can prevail: a municipal district or a specialized municipality.

Here are some of the advantages and disadvantages of amalgamation:

Advantages Disadvantages • Eliminates duplication of all programs and • Perceived loss of autonomy services • Challenges may exist with combining • Eliminates inter-municipal conflicts organizational cultures

• Potential long-term cost savings to • Initial short-term costs to implement ratepayers

Within Alberta there are six specialized municipalities (Lac La Biche County, Mackenzie County, Municipality of Crowsnest Pass, Municipality of Jasper, Regional Municipality of Wood Buffalo, and Strathcona County). With the exception of the Municipality of Jasper, the other five municipalities all involve both urban and rural areas. There are sixty-three municipal districts within the Province.

While all staff would maintain their jobs at amalgamation, eventually there would be changes. A single Public Works Director would be appointed, but there may be a need for an urban and a rural roads foreman. Eliminating one council would reduce the number of meetings staff would have to attend, saving on salary costs (or in lieu of overtime). The elimination of the boundary line would mean staff work in the whole district and do not have to stop just because of a political line. Agricultural mowers could do some work in the former Town and Town parks mowers could travel to the hamlets. The new council would review all policies and service levels may change. These changes take place over many years.

Reduced expenditures will be achieved through amalgamation. This will be done not by reducing services, but by eliminating duplication in governance, senior administration and administrative support services. This can be achieved without reducing services to the residents and businesses.

If the Town and MD amalgamate, they will not only have the financial opportunities mentioned above in ‘enhanced collaboration’, but they will achieve increased savings by eliminating duplicate costs.

The new regional municipality: • will only require one Council. The region is currently being led by 12 elected officials. The new regional municipality could be governed by 7 elected officials. This will result in less committees as well. • will not require two Chief Administrative officers. • will not require two senior leadership teams including the directors of public works and agriculture, corporate services, legislative services and the chief financial officer. • the administrative support staff for council and senior administration can be reduced.

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• corporate support services can be reduced by eliminating duplication is human resources, finance, information technology, taxation, utility billing. • savings may be achieved when hiring professional services under one municipality such as assessors, legal services, auditors and consultants.

It will take time to fully achieve these savings with amalgamation. Do not expect to achieve all the savings in the first year. The transition to a regional municipality will result in a reduced staffing level and it is typical to manage this through attrition, bridging early retirements and offering severance packages.

It should be noted that there will likely be little if no job loss for staff working directly in outside operations, including public works, utility operations, fire and bylaw services, recreational services and parks operations.

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8.0 CONCLUSIONS

Up to this point, a virtual picture has been painted that describes the many aspects and components of a regional governance study. While there are any number of conclusions that might be drawn from the data collection and analysis, the following are what we see as the more salient conclusions that can be drawn from all of the information:

1. During the public stakeholder engagement, we heard many people ask questions that related directly to amalgamation when in fact this is regional governance study, not an amalgamation review. Notwithstanding, because of the perception by many that amalgamation may be a logical way for the MD and County to go, more information should be collected and assessed in order to help further decipher whether amalgamation is or is not something to pursue.

2. There was no appetite for reducing or eliminating services. Eventually, revenue reductions may result in the need to reduce the level of services in the municipalities. However, jointly contracting services currently provided by both municipalities or sharing staff specialties may lead to some efficiencies. Implementing more joint service agreements should be investigated in the near future.

3. Notwithstanding how the MD or Town have chosen to indicate their listing of programs and services, most are very similar in nature albeit the MD focus includes more roads, bridges and agriculture while the Town focus is more recreational.

4. There are a number of third-party companies or agencies providing services to both municipalities and additional joint contracts may be feasible.

5. Sharing of staff specialties could improve service and enable hiring of more qualified, less generalized staff.

6. There are many committees, both internal and external, that may be costly in elected official pay and expenses, and senior staff time.

7. The Town and MD are viewed as one community, the councils get along well with each other and numerous collaborative agreements are in existence.

8. Now that the oil & gas assessment review has resulted in an interim three-year deal, the impacts on the MD will be less than originally contemplated. Notwithstanding, the MD will still need to make some difficult choices in the short term.

9. With a trending population decline in the Region, an unfavourable economic outlook across the country and province, changes to property assessment, reduced provincial grants, reduced municipal revenues and regional governance trends, maintaining a governance model based upon the status quo does not address the inherent question of “how can we as municipal corporations be more effective and efficient while being fiscally responsible to all our residents and ratepayers”. The status quo (continuing as two independent municipal corporations) may allow for short to medium term sustainability. But, it is expected in the medium to long term that financial sustainability will become more and more difficult to achieve without significant changes to service levels and service delivery.

10. The statistical data (Tables 28 thru 33) indicates both the MD and Town stack up reasonably well against other municipalities. There are a few areas the MD appears too high in: elected official compensation and its aggregate amount of salaries/wages/benefits. The elected official compensation can be attributed to the methodology (per diem) used to calculate the annual earnings and benefits for each council member along with the number of committee’s council members are

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appointed to. Another methodology to consider that could potentially save on costs would be providing a salary and eliminating all per diems. Out of pocket expenses should not be impacted.

11. The Intermunicipal Collaboration Framework, the Integrated Community Sustainability Plans, the Intermunicipal Development Plan, the Municipal Development Plans and the Municipal Growth Plan, all demonstrate a high level of cooperation and collaboration between the MD and Town including many overlapping goals and objectives.

12. Notwithstanding how the MD or Town have chosen to indicate their listing of programs and services, most are very similar in nature albeit the MD focus includes more roads, bridges and agriculture while the Town focus is more recreational. As two relatively small municipalities, consolidation of additional services or even all services should be carefully reviewed and discussed.

13. Given the three viable governance options (Status Quo; Enhanced Inter-Municipal Collaboration; and Amalgamation) and all the factors that impact fiscal sustainability, the most compelling path forward appears to be amalgamation. However, until such time as more details and information are available on what an amalgamation may entail, the pursuit of this option should be limited to initiating further discussions and negotiations before arriving at amalgamation as being the solution for regional governance in the Region.

14. The Chief Financial Officers (CFO) for the Town and the MD fully understand the details of their operating budgets. The project required a deep dive into the financials for both municipalities and this resulted in both CFOs contributing a lot of time and effort to answer many questions regarding their budgets.

15. The operating budgets for both municipalities are balanced and are well constructed. The financial documents provided for the project analysis were easy to understand and provided the notes and context required.

16. The Town and MD work together under some service agreements and bylaws but short of that the financial departments do not communicate. Financial contributions provided between the municipalities do not balance each other. An example would be the Town budgets a $71K contribution to the MD’s airport and the MD budgets to receive $80K from the Town. There are opportunities for efficiencies if there is greater communication between the two CFOs.

17. Debt is not an issue for the region. The MD has no debt and the Town has very low debt. This would not be an issue if the two municipalities decided to amalgamate.

18. Both the Town and the MD contribute to operating and capital reserves. Both municipalities have sizable reserves saved up for future needs. The Town charges a capital fee on the utility bills that is transferred directly to reserve. Both municipalities would bring attractive reserve assets to an amalgamation. (MD $7.1M and Town $5.1M)

19. The Town and MD have very similar residential mill rates (MD 9.00 and Town 9.75) This is important because during an amalgamation the residents would not be significantly impacted by changes to the property taxes they are charged.

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9.0 RECOMMENDATIONS

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Transitional Solutions Inc. offers the following recommendations for enhanced regional collaboration between the Town of Fairview and the Municipal District of Fairview based on the research, stakeholder engagement and analysis of all data inputs acknowledged in this report. They are compartmentalized by plausible implementation time:

Short-Term Recommendations

1. That the MD and Town negotiate joint contracts with the Mackenzie Municipal Services Agency for all planning and development services, with Prairie Disposal Ltd. for all waste management collection services and KCL for all property assessment services for both organizations as a single identity. • Currently the MD and the Town both utilize some of the services of the Mackenzie Municipal Services Agency for planning and development, through a separate contract • A joint contract should take some load off Town or MD staff by using the specially trained staff of the Agency • A single contract with Prairie Disposal Ltd for both municipalities should lead to some cost efficiencies as a result of increased waste and recycling volumes and may save both municipalities funds. • KCL is the assessor of choice at this time, so a joint contract should lead to some cost efficiencies as a result of increased volumes and may save both municipalities funds

2. That the MD contract the Town for regional fire services, based on the current bylaws. • The Fire Advisory Committee is a mixture of elected officials and staff • Fire services missing from both organizational charts • Fire Chief reporting structure is not clear and a contract for service would clarify this. • Levels of Service should be determined by bylaw, not a joint staff/councillor committee.

3. That the MD and Town sign agreements to formalize current ad hoc cost sharing for cemetery maintenance and the airport operation. • Currently the Town budgets to pay the MD $7500 annually for cemetery maintenance and $60,000 annually for airport operations • There is no written agreement for these arrangements • The ICF mentions the need for cemetery and airport agreements.

Mid-Term Recommendations:

4. That the MD and the Town investigate the feasibility of providing all IT services jointly and consider a consistent website for the two jurisdictions or a joint website which will enable residents to easily be informed • It is difficult to obtain the services of professional IT assistance and with both municipalities utilizing one IT staff member or contractor, there may be sufficient volume to engage the services of a more qualified individual. There should also be cost savings with a single contract/staff member. • There would be advantages to having consistent websites for both jurisdictions, or even having a common website for both. This will make it much easier for residents to obtain information on both municipalities • This could be very significant if the Town and MD were to ever have offices in the same building.

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5. That the MD of Fairview and the Town of Fairview investigate the feasibility of employing an Occupational Health & Safety Officer that provides the service for both municipalities (this could be a contract position). • There is probably insufficient work in either municipality on its own to hire an Occupational Health & Safety Officer; however, they could jointly hire a staff member/contractor to provide services for both municipalities. • Having one individual should result in a higher level of service and less cost by sharing the cost between two municipalities. • A quality safety program is very important, for the health of employees, and from a legal standpoint.

6. That the MD and the Town investigate the feasibility of one jurisdiction controlling and managing a single utility invoicing system • Currently the MD and the Town each maintain their own utility receivables which may not require a full-time staff member. • With one jurisdiction being responsible for this task it should reduce the operational cost for this function for both municipalities. • A contract for service may be a good option.

7. That the MD of Fairview implement a plan to move to a fully funded utility system within the next three years. • The MD operates water and sewer services and charges fees for this service, but the water and sewer fees do not cover the cost of the utility operations. This shortfall in funding is covered from municipal taxes. The MD should set their utility fees so that they cover all operational expenses. • The MD should add a new capital fee on the monthly utility bills for both the water and sewer operations. This fee should be transferred to a dedicated capital reserve to fund future capital rehabilitation and replacement project in the water and sewer operations.

8. That the Town and the MD initiate discussions through the ICF Committee to determine if efficiencies in service delivery can be achieved by entering into a Master Bilateral Services Agreement. Services to be examined might include: a. Airport b. Bylaw Enforcement c. Cemetery d. FCSS e. Fire f. Recreation g. Water & Wastewater

• With thirteen current intermunicipal agreements in place, the idea of consolidating most of these and perhaps new funding arrangements into one master agreement is seen as an efficiency involving less administrative oversight on an ongoing basis. • The Town currently provides an annual grant to the MD for airport operating costs without any agreement in place. • The Town currently contracts to a third-party bylaw enforcement. The MD conducts its bylaw enforcement practices with existing administrative staff who are usually preoccupied with other

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municipal matters. As a result, there is minimal enforcement of MD bylaws and regulations unless a complaint is received. A joint bylaw enforcement officer may provide for a more effective service at a reasonable cost. TSI has been advised that the bylaw enforcement position is currently being discussed between both Parties. • The MD currently operates and maintains a cemetery that is used by both rural and urban residents. And while the Town does provide an annual grant to the MD to assist in these costs, there is no formal agreement in place. • Both municipalities by bylaw and agreement fund and provide a joint FCSS program. • Fire currently is provided vis-a-vis a bilateral agreement. It is interesting to note, that Fire Services are not reflected in either the MD or the Town organizational charts. • The MD currently provides an annual grant for recreation on behalf MD residents. A bilateral agreement is in place for this arrangement. • Library services are another service the MD and Town have determined to jointly participate in again vis-à-vis a bilateral agreement. • Both municipalities provide water and wastewater services. Given the difficulties in recruitment of qualified personnel, this is something that should be explored.

Long-Term Recommendations:

9. That amalgamation proceedings be initiated by both the Town and MD in accordance with Part 4, Division 5 (Amalgamation) of the MGA. • While we believe that amalgamation is the best path forward, we recognize and understand there are many issues and questions that need to be addressed before a final decision to proceed with amalgamation can be made. • Taking this course of action does not automatically mean an amalgamation will occur. However, it does indicate that subject to the negotiation results, this is a distinct possibility. • The sooner this occurs, the sooner the Town and the MD can apply for provincial financial assistance which would be used to enlist the services of a third party to help guide the negotiations process. It is estimated the negotiations process would take approximately eight months to complete. • The Town and the MD have received provincial funding support to undertake this regional governance review. Further funding is only available if the Town and the MD provide written notice of the proposed amalgamation to the Minister of Municipal Affairs. Without this provincial financial support, it is unlikely further study and review of amalgamation would occur. • During the two public workshops held in July many concerns and issues were raised as it related to amalgamation. A key messages manual was prepared articulating the concerns and issues. Responses to these questions were prepared and circulated to the Town and the MD. Until such time as the Town and the MD commence discussions/negotiations on how to specifically address all the concerns and issues, many of the questions cannot be resolved. • An amalgamation report must be prepared describing the results of the negotiations. The report requires a description of the public consultation processes involved in the negotiations. Therefore, before any decisions are made, the public must be given the opportunity to be involved in the process. The report also requires a summary of the views expressed during the public consultation processes. • Because the long-term financial sustainability of both the Town and MD as two separate entities is questionable, further discussions/negotiations on the creation of a single entity is

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viewed as being a reasonable and realistic way to advance the conversation and potentially chart a path forward that is in the best interests of the community at large.

10. That consideration be given to conducting a vote of the electors at the October 2021 Municipal Election on whether or not there is public support for an amalgamation. • This provides added legitimacy to the public consultation process. • Assuming the amalgamation negotiations commenced in January 2021 and took approximately eight months to complete, it would take until September 2021 for the process to be almost complete. During this time many of the questions raised and heard during this regional governance review would have been addressed and could be shared with the public so that they are making an informed choice should they be given the opportunity to vote on the issue. • Part of the negotiation process requires public consultation. Allowing the electors to express their opinion by voting on the amalgamation question is one of many ways to involve the public in the discussions/negotiations. • The results of the vote would form part of the amalgamation report.

11. That application to the ACP Grant Program to assist with amalgamation negotiations be submitted to Alberta Municipal Affairs. • AMA personnel have suggested that additional funding may be available subject to giving formal written notice to the Minister that the Town and the MD wish to initiate amalgamation proceedings. • Given the desire by the Province to cut expenditures, the sooner application is made the sooner it will be known if the application is approved or not.

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10.0 CLOSING REMARKS

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While the above recommendations do not specifically recommend amalgamation, they do encourage further dialogue and discussion to ascertain whether this is the best course of action for the Fairview Region or not. To go down this path will require faith and trust in one another. It means having an open mind and a willingness to have some give and take. As Mayor Moghrabi from Lac La Biche has pointed out “as long as all councillors, both urban and rural, remember to work in the best interests of the new municipal entity, decision-making on council is easier, since everyone has similar interests and represents the same community”. While the Mayor’s quote relates to once amalgamation has occurred (the MD and Town are not there), TSI believes that fruitful negotiations to address all the questions raised during the public consultations, workshops, interviews and surveys will provide the necessary background information to make an informed decision on how to best proceed.

“As long as all councillors, both urban and rural, remember to work in the best interests of the new municipal entity, decision-making on council is easier, since everyone has similar interests and represents the same community”

Recommendation 9.10 is about collecting more information on how an amalgamation potentially might unfold. Recommendation 9.12 is about accessing a provincial grant so that local taxpayer dollars are not required to pay to further the proceedings. If these two recommendations are approved by the MD and Town Councils (and the grant application is approved by AMA) this will enable the next phase of this complex issue of regional governance to be fully examined.

If the councils decide to amalgamate it would not happen in time for the fall elections and probably would not happen until 2023 or 2024.

If these recommendations are not accepted, the amalgamation issue will likely stall with no further discourse occurring in the short term. Both municipalities will continue to exist and face the challenges of meeting taxpayer expectations with a potential revenue shortfall. And while efforts can be made vis-à-vis the ICF Committee and collaboration process contained in the ICF Agreement to find services that can be delivered in a different manner so that benefits accrue to both parties, the proverbial “elephant in the room” of addressing duplication of services is not likely to occur. If amalgamation talks stall or fail to materialize, the Town could pursue dissolution, and if the town ratepayers vote in favor, the MD would get the Town whether they want them or not. Similarly, the MD could pursue dissolution, and if the MD ratepayers vote in favor, the Town could get the MD.

The external environment has changed significantly in a short period of time (fewer grants, COVID-19, new policing costs, etc.). With more change on the horizon, (e.g. provincial assessment review), municipalities and regions that adjust will be the jurisdictions that have prepared for ongoing fiscal sustainability and are able to aspire to achieve their vision for the future. Those that choose not to embrace change will fall behind and may fail in their quest to deliver municipal services in a cost effective and efficient manner.

The current range of political opinions and beliefs held by both the Town and the MD are such that they often promote collaboration and cooperation in their service delivery. By continuing to work through their collaboration frameworks, TSI believes the two municipalities can further create a community well prepared for future growth.

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11.0 REFERENCES

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1. MD Website 2. Municipal Affairs Website (Government of Alberta) 3. Municipal Government Act RSA 2000 Chapter M-26 June 2020 4. Staff Listing – MD 5. Staff Listing – Town 6. Statistics Canada Census Profile 2016 7. Statistics Canada Census Profile 2011 8. Statistics Canada Census Profile 2006 9. Statistics Canada Census Profile 2001 10. Statistics Canada Census Profile 1996 11. Website – Birch Hills County 12. Website – County of Northern Lights 13. Website – Lac La Biche County 14. Website – Municipal Affairs 15. Website – MD of Fairview 16. Website – MD of Peace 17. Website – MD of Smoky River 18. Website – MD of Spirit River 19. Website – Town of Athabasca 20. Website – Town of Black Diamond 21. Website – Town of Fairview 22. Website – Town of Fort McLeod 23. Website – Town of Gibbons 24. Website – Town of Grimshaw

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12.0 APPENDICES

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1. Key Messages Manual (22 Pages) 2a. Combined Public Survey Results (48 Pages) 2b. MD Survey Results (31 Pages) 2c. Town Survey Results (50 Pages) 3. Listing of all MD and Town Documents (1 Page) 4. Intermunicipal Agreements between the Town and the MD (1 Page) 5. Phase 2 Presentation to Council (44 Slides) 6. Financial Detail by Account Report (9 Pages) 7. Individual Department Reports (60 Pages)

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