Local government partnering agreements for service delivery

Regional districts and municipalities have a range of options for providing local or regional services in partnership with another local government, private corporation, not-for-profit organization, First Nation or a public authority such as a school board.

Municipal councils and regional district boards have the power to enter into a partnering agreement with organizations such as public authorities, societies or private corporations to provide a service on behalf of the local government.

Local governments may choose to enter into a partnering agreement for a number of reasons including potential cost savings (for example, value for money or economies of scale), outside expertise, risk sharing and operational efficiency.

Legislation allows the local government, under the partnering agreement, to provide assistance to the partner even if that partner is a business. That assistance may be under the terms of the agreement (such as leasing them property below market value) or a property tax exemption authorized by the legislation.

Certain types of partnering agreements differ for municipalities and regional districts. For example if a regional district board enters into an agreement with public authority from out-of-province, the minister responsible for local government must approve the agreement.

Other rules relevant to partnering agreements are found in the Local Government Act and the Community Charter (for example, providing assistance to the partner in a partnering agreements, and liabilities for local governments under agreements). Certain agreements, such as ones under which the local government incurs liabilities of a capital nature or provides a loan guarantee, must be approved by the electors.

Partnering agreement considerations

Municipal councils and regional district boards can choose to enter into partnering agreements to provide services for a variety of reasons. There are many considerations before entering into an agreement with any partner, whether private or another local government, to provide important local or regional services. Some of those considerations are specific to government-to-government partnerships while others apply to any partnering agreement.

Partnering agreements among local governments may help to capture economies of scale and provide the potential to save money, especially when the service requires significant capital investment (for example, a sewage treatment plant may be run most economically when used by two or more jurisdictions). Or, it may be unnecessary for two or more local governments to each develop the organizations, expertise and acquire the materials to provide the same specialized service.

The potential to improve overall service levels, particularly by offering services that could not otherwise be offered can be important. Local governments may be unable to provide local services on their own such as

  • Recreation services and, in particular, recreation facilities
  • Libraries
  • Theatres
  • Community services, such as social planning

Some of these services can only be provided by pooling local government resources. Several services provided by one local government may have benefits that extend beyond the local government's border. For example, in economic development, the regional district’s efforts to attract and develop business will almost invariably have region-wide effects (for example, increase diversity of the property tax base).

The following steps will help a local government to decide if a partnering agreement is the right approach to providing a service.

1. Identify opportunity or need

Identify a servicing opportunity or need that the local government feels it should address. The specific need might be related to:

  • An existing service that needs to be expanded or improved
  • An existing service that is proving too costly to provide
  • A new service for which the community has expressed a strong demand, that is not presently provided for

2. Consider methods of service provision

Local governments have at their disposal a wide range of methods for providing local services. By carefully examining their needs and objectives related to the service in question, a local government may wish to assess the advantages and disadvantages of the various service provision methods available to them. Questions to guide this assessment may include:

  • Can the local government afford to provide the service on its own, or does it need to rely on others?
  • What is the most cost-effective way of providing the service?
  • What method of provision would result in the highest level of service, for a given price?
  • Will the public accept the involvement of another local government in the delivery of the service?
  • Do the local government's collective agreements allow the local government to consider partnering in the delivery of the service?

3. Explore partnering

If the local government determines that partnering is the preferred method, it then needs to identify and approach prospective partners. Given the nature of local services, in most cases prospective partners will be neighbouring jurisdictions who are close enough to effectively share in the cost and benefits of a particular service. A number of issues need to be discussed with prospective partners, including:

  • Each party's vision for the proposed service, and the extent to which the visions can be made to match one another
  • Each party's view with respect to the scope of the proposed service
  • The anticipated cost of the service, and how costs are going to be shared among the participating jurisdiction

At this step in the process, the local government and its partners should undertake the work required to actually develop the partnering arrangement.