Finding Common Ground: Interlocal Cooperation in Canada

Kate Daley and Zachary Spicer

IMFGNo. 7 / 2018

forum

About IMFG

The Institute on Municipal Finance and Governance (IMFG) is an academic research hub and non-partisan think tank based in the Munk School of Global Affairs at the University of Toronto.

IMFG focuses on the fiscal health and governance challenges facing large cities and city-regions. Its objective is to spark and inform public debate, and to engage the academic and policy communities around important issues of municipal finance and governance. The Institute conducts original research on issues facing cities in Canada and around the world; promotes high-level discussion among Canada’s government, academic, corporate, and community leaders through conferences and roundtables; and supports graduate and post-graduate students to build Canada’s cadre of municipal finance and governance experts. It is the only institute in Canada that focuses solely on municipal finance issues.

IMFG is funded by the Province of Ontario, the City of Toronto, Avana Capital Corporation, Maytree, and TD Bank Group.

Authors

Kate Daley completed a PhD in Political Science at York University in 2017. Her dissertation explained politicians’ commitment to “smart growth” planning policies in Waterloo Region, Ontario.

Zachary Spicer is a Visiting Researcher with the Institute on Municipal Finance and Governance and Senior Associate with the Innovation Policy Lab at the University of Toronto’s Munk School of Global Affairs.

Acknowledgements

The authors would like to thank Christopher Alcantara, Jen Nelles, David Cash, and Emily Harris for their participation and presentations during IMFG’s conference on interlocal cooperation in May 2017, as well as their insight into this Forum paper. The authors would also like to thank Enid Slack and Selena Zhang for their helpful comments and editing on earlier versions of this paper, as well as Philippa Campsie for her careful copyediting.

The authors gratefully acknowledge the financial support of the Social Sciences and Humanities Research Council for providing funding to carry out this research and support this conference and publication. Finally, the authors would like to thank those who attended the conference and provided helpful feedback on the presentations.

Institute on Municipal Finance & GovernanceMunk School of Global Affairs, University of Toronto1 Devonshire PlaceToronto, Ontario, Canada M5S 3K7 e-mail contact: info.imfg@utoronto.cahttp://www.munkschool.utoronto.ca/imfg/ Series editors: Selena Zhang and Philippa Campsie© Copyright held by authorsISBN 978-0-7727-0993-6

Overview

A range of municipalities are considering or already using interlocal agreements in a variety of policy areas. Canadian municipalities with such agreements generally report high levels of satisfaction with them. Surprisingly, however, we find less cooperation between Canadian municipalities than we find in other parts of the world.

In May 2017, the Institute on Municipal Finance and Governance (IMFG) hosted a conference that brought together researchers and practitioners in the field to explore the scope, focus, and future of interlocal cooperation in Canada. The conference included both aggregate research conducted across several Census Metropolitan Areas and detailed case studies of specific governments and agreements. Lessons were drawn both from agreements between municipalities and from agreements between municipal and Indigenous governments.

This Forum paper presents findings from the conference and concludes by providing suggestions for local governments hoping to enter into interlocal agreements. These recommendations focus on strengthening three key areas: relationships, institutional processes, and accountability and democracy.

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Finding Common Ground: Interlocal Cooperation in CanadaIntroduction

Municipalities in Canada face pressure to build or maintain infrastructure and provide high-quality services while relying on limited forms of revenue generation. For many municipalities, limited geographical size or institutional scale make it especially difficult to address these challenges effectively. As a result, municipalities seek to reduce service costs or improve service quality in three main ways.

The first approach is amalgamation, which can increase municipal scale and potentially increase municipal capacity. In practice, however, not only has municipal consolidation been routinely shown to fall short of expectations in terms of efficiency and cost savings (see Miljan and Spicer 2015; Sancton 2000; Slack and Bird 2013), but the process is also politically and administratively difficult.

The second approach involves the privatization of services, which may lower the costs of services and mitigate

risk by transferring servicing responsibility to the private sector. Privatization, however, can be politically controversial and is often opposed by public-sector unions and residents who fear a decline in service quality. Moreover, some have argued that public-sector organizations have a stronger focus on improving service quality and delivery (Dollery and Johnson 2005; Henderson 2015).

The third approach is interlocal cooperation, which involves either contracting with another municipality for service delivery or pooling resources with other local governments to deliver certain services collectively to residents. This practice can avoid institutional consolidation on one hand and the controversial use of private contractors on the other (Spicer 2014, 2015).

Despite these advantages, the practice is still not widely understood in Canada. Interlocal cooperation was the subject of a full-day conference at the Institute on Municipal Finance and Governance on May 29, 2017, titled Finding Common Ground: Inter-Local Cooperation in Canada. The conference included presentations from:

• Zachary Spicer, Visiting Researcher at the Institute on Municipal Finance and Governance

• Christopher Alcantara, Associate Professor of Political Science at Western University

• Jen Nelles, Visiting Associate Professor at Hunter College, City University of New York (CUNY)

Photo by Doug Kerr via Flickr (http://bit.ly/2AhVEMm)

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• David J. Cash of Cash & Associates Inc., former Chief Administrative Officer of Whitchurch-Stouffville

• Emily Harris, Principal at Acclimatise Fiscal Consulting1

The conference also marked the launch of Zachary Spicer’s new website, which puts interlocal agreements online to make them available to researchers, municipalities, and community members. The website, hosted at www.interlocalcooperation.ca, provides approximately 650 agreements from 12 Census Metropolitan Areas across Canada.

This IMFG Forum paper covers the main themes that emerged at the conference: relationships, institutional processes, and accountability and democracy. It begins by highlighting a curious paradox: there are relatively few interlocal agreements in Canada, even though those that are in place are highly regarded. It examines interlocal cooperation in practice, by considering examples of partnerships between municipalities and between Indigenous governments and local governments. It then addresses some of the challenges posed by interlocal cooperation. The paper concludes with a list of lessons learned in these three areas.

The Paradox of Interlocal Cooperation in Canada

Interlocal cooperation in Canada is characterized by a paradox. There are relatively few such agreements in Canada, despite evidence showing compelling reasons to enter into interlocal agreements and significant success with the agreements that are in place. Survey results have shown that municipal practitioners are interested in interlocal contracting and shared-service relationships and view them favourably. Those who have used interlocal agreements in the

past consider them successful. Nevertheless, the use of such agreements in the Canadian context is not widespread.

How frequently are intermunicipal agreements used in Canada? In six of Canada’s largest Census Metropolitan Areas (CMAs),2 Spicer collected interlocal agreements signed between 1995 and 2013. The study area contains 117 governments covering more than nine million people, or roughly a quarter of the Canadian population. In total, only 352 interlocal agreements were found.

This number is surprisingly small, especially when compared with other jurisdictions. Studies on interlocal agreements in the United States typically cite hundreds, if not thousands, of agreements within metropolitan areas:• Shrestha (2005) found 6,080 agreements among

38 large American cities; • Wood (2005) found 1,638 agreements in the Kansas

City metropolitan area; • Thurmaier (2005) identified nearly 12,000 agreements

signed between 1965 and 2004 in Iowa;• LeRoux and Carr (2007) counted 445 road agreements

in Michigan; • Andrew (2008) found 390 public safety agreements in

Florida. Despite the institutional differences between Canadian

and American municipalities, the small number of interlocal agreements in Canada is nevertheless striking.

Among the few agreements that are in place in the six CMAs listed in Table 1, most are for emergency services. Transportation and administrative agreements are also common, but agreements covering economic development, boundary changes, or social services are rare.

Table 1: Number of Interlocal Agreements in Canada in Six Census Metropolitan Areas, 1995-2013

Census metropolitan area (CMA) No. of municipalities Population Land area (km square) Population density Agreements

Toronto 27 5,583,064 5,906 954.4 130

Winnipeg 10 730,018 5,303 137.7 15

Saskatoon 24 260,000 5,215 50.0 11

Regina 16 210,556 3,409 61.8 13

Edmonton 31 1,159,869 9,427 123.0 153

Calgary 9 1,124,839 5,108 237.9 30

0 20 40 60 80 100 120 140 160

Social Services

Boundary Changes

Economic Development

Number of Interlocal Agreements

Recreation

Waste

Planning

Animal Control

Water/Sewage

Administration

Transportation

Emergency Services

Figure 1: Interlocal Agreements by Policy Area

Source: Spicer 2015

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are focused on service cost and quality, which are also central issues in the amalgamation and privatization debates.

Those who had experience with interlocal service agreements were also asked for their impressions of those agreements. Respondents were asked to provide feedback on

their experience using a seven-point Likert scale, with 0 being a poor experience and 7 being a highly positive experience.

Officials with experience of interlocal

agreements report being quite satisfied with them, providing high average scores for experience, satisfaction, communication, and effectiveness. Each scored an average of above five on the seven-point Likert scale. In short, municipalities with interlocal agreements report that those agreements are working well.

Yet there are good reasons for municipalities to enter into such agreements, and the agreements that do exist are working well. In July and August 2015 Zachary Spicer conducted a survey of senior staff and politicians in small, medium-sized, and large Ontario municipalities. The survey, which received 707 responses, asked respondents to gauge their experience with past interlocal cooperative activity (if any) and rate their interest in future cooperation under certain scenarios. Data from this survey are presented in Figures 2, 3, and 6.

By far, the most commonly reported reasons for engaging in interlocal cooperation are a need to lower costs, increase efficiency, and provide better service coordination. Reasons such as resident demand or provincial pressure were not commonly reported, indicating that local decision-makers

The most commonly reported reasons for engaging in interlocal cooperation are a need to lower costs, increase efficiency, and provide better service coordination.

Figure 3: Average Experience Rating in Interlocal Agreements

Source: Spicer 2015

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0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Better Service Coordination

Lower Costs

Provincial Pressure

Lower Sta� Work Burden

Increase E�ciency

Resident Demand

Provincial Download

Easier Service Delivery

Unable to Deliver Service Alone

Improve Service Continuity

Better Access to Provincial Resources

Percentage of Respondents Citing Reasons for Entering into an Agreement

Figure 2: Motivation for Interlocal Cooperation

Source: Spicer 2015

0 1 2 3 4 5 6 7

E�ectiveness

Communication

Satisfaction

Experience

Poor Experience Highly PositiveExperience

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Thus, paradoxically, we know that interlocal agreements are popular where they are in place and that local administrators and politicians regularly consider their use, but so far we have not seen significant rates of agreement formation. Why? The next section explores some challenges surrounding interlocal agreements. Interlocal Cooperation in Practice: Relationships and Institutional Processes

A study of specific cases of cooperation highlights two factors that influence whether productive interlocal cooperation will occur: relationships and institutional processes.

One successful example of an interlocal partnership is found in York Region (an upper-tier or regional municipality), where six of the nine lower-tier municipalities came together to create the Northern 6 (or N6). The N6 is a voluntary partnership among Aurora, East Gwillimbury, Georgina, King, Newmarket, and Whitchurch-Stouffville, which have varying population sizes, levels of urbanization, and growth rates.

In 2006, the mayors and chief administrative officers (CAOs)3 determined that partnerships among all or some of the municipalities could create efficiencies or service improvements. They aimed to focus on administrative and operational matters rather than contentious or political issues, to identify areas of common interest, and to pursue cooperation that would improve communities and maintain their distinct identities.

The first major initiative was to provide for an internal auditor, which none of the six municipalities could afford or sustain on its own. All six signed a Memorandum of Understanding with York Region, which hires the internal auditor and bills the municipalities. The N6 municipalities schedule and manage the Internal Auditor’s workplan. Cost-sharing among the municipalities was based on population relative to assessment and on operating costs. The agreement allowed not only for consistency but also for the participating municipalities to learn from the auditor’s recommendations to individual municipalities.

Subsequent initiatives, based on the success of the first, operate under a four-stage process, illustrated in Figure 4.

First, a baseline review identifies existing costs that can be saved or future costs that can be avoided. (As David Cash noted at the conference, it is usually more difficult for elected officials to recognize savings based on future costs that will not be incurred under a new arrangement, compared with current expenditures that can be reduced.)

Second, a project review is conducted, using seed money provided by the municipalities. This review could involve a consultant or a municipal staff member dedicated to the project review.

Third, if the review shows that cooperation would be warranted, the CAOs of the participating municipalities approve the project.

Finally, council approval is secured based on a public staff report. Usually one CAO drafts the report for council, which serves as a template for the report to each municipality, so that all reports have the same format and the same recommendations. This helps ensure that the elected officials from all the municipalities are receiving the same information from staff about the proposed initiative.

Once an initiative is in place, annual meetings of the mayors of participating municipalities provide updates and review accomplishments. These meetings play an important role in maintaining political support for the agreements. Major initiatives in the N6 under the partnership have included solid waste collection and recycling, economic development, staff training, website development, insurance and risk management, animal control, and drinking water quality.

The main benefits to the partnership are monetary savings and avoidance of future costs, as well as enhanced customer service. Other benefits include knowledge sharing, positive media coverage for local government success, and greater clout at the regional level for the smaller municipalities of York Region.

In 2015, as a result of the partnership’s evolution over a decade, it was formalized through a partnership protocol. The partnership protocol is based on five guiding principles: • sharing ideas;• exploring opportunities without sacrificing a municipality’s

own needs;• the ability to opt out: all six members need not participate

in all projects; • fair cost-sharing models;

• supporting change to successfully implement projects.

Project review conducted

Approval by CAOs

Council approval secured

Baseline review identi�es existing costs thatcan be saved or future costs that can beavoided

Figure 4: Four-Stage N6 Approval Process

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Case Study: The N6 Solid Waste Recycling Project

Starting in 2007, the N6 solid waste recycling project began in response to York Region’s decision to increase waste diversion targets to 70 percent. At the time, there was no “green bin” program (collection and processing of organic material), so an increased level of service was necessary. All six municipalities participated in the project, and a consultant was hired to develop a request for proposals, which was eventually issued by one municipality. This led to a joint contract with one waste collection provider.

One challenge of the project was the existence of different service levels in each municipality. For example, some communities allowed free collection of a smaller number of garbage bags than others. In the final contract, this problem was addressed by allowing each municipality to set its own service level for garbage bags.

The contract also featured a “cancellation for convenience” clause that allowed a municipality to withdraw from the contract for reasons unrelated to contractor performance, and specified the additional fees such an action would incur. This clause was necessary to gain political support from Whitchurch-Stouffville, in response to concerns about its council’s ability to make changes and secure a different provider during the term of the contract. This type of cancellation provision may be important when financial commitments span multiple terms of political office (in this case, 10 years for municipalities with four-year Council terms).

The service had a joint launch, as well as shared communications, a customer call centre, and complaint tracking. As a result of the joint contract, waste costs in Whitchurch-Stouffville did not increase in the first several years of the contract, despite substantial increases in population over the term of the contract. The project was so successful that the municipalities issued another RFP for another 10-year contract to continue the project. Thus, the waste project passed the ultimate test.

For more information on this project, see Cash (2014).

Beyond partnerships between municipalities, important lessons can be learned from partnerships between municipalities and other governments. In their 2016 book, A Quiet Evolution: The Emergence of Indigenous-Local Intergovernmental Partnerships in Canada, Christopher Alcantara and Jen Nelles explore the emergence and character of relationships between local and Indigenous governments in Canada.

While solutions to challenges facing Indigenous communities are usually assumed to lie at the federal, provincial, or territorial levels, some of the most innovative and transformative solutions are arising at the local level. These relationships are a key part of the evolving Indigenous–non-Indigenous relationship in Canada.

Alcantara and Nelles identified four main categories of agreements:

• jurisdictional negotiation agreements (most common), which mostly involve the provision of services for a fee, although some are for joint management or programs;

• relationship-building agreements (second-most common), which set the stage for further cooperative action; they are intended to be a precursor to deepening ties between local and Indigenous governments;

• decolonization agreements (less common), which make an explicit recognition that Indigenous signatories historically occupied the lands that are now administered by the local government;

• capacity-building agreements (most rare), which commit local governments to assist Indigenous governments in establishing their governing structures or community.

Alcantara and Nelles classified relationships based on (a) their level of engagement, in the form of communication, and (b) their intensity, in the form of how much autonomy was sacrificed. This produced four types, shown in Table 2.

Table 2: A Typology of Indigenous-Local Relationships

Engagement

High Low

Intensity

High Strong Synergy In the Loop

Low Agreement- Centred

Business as Usual

Source: Christopher Alcantara and Jen Nelles (2016)

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Two major lessons can be drawn from both the N6 and examples of Indigenous-local cooperation. First, relationships are crucial. The N6 partnership relied on a spirit of mutual trust and respect among the parties, and on valuing joint benefits over the partners’ own interests. While one municipality might incur a disproportionate share of the work for any individual initiative, the workload balances out over several initiatives. Staff continuity is helpful in seeing the benefits of working together over the long term.

Similarly, productive relationships between Indigenous and local governments depend on trust. For Alcantara and Nelles (2016), the variable of community capital attempts to evaluate trust based on the practices to which it leads. When relationships are between individuals in different governments, high rates of turnover can make cooperation difficult, as rebuilding relationships with new people takes time and effort. Like the N6 partners, however, Indigenous and local governments can identify comparative advantages and alignments of policy priorities, and work on building community capital. Individuals within these governments can establish relationships with their counterparts, while community members and civic leaders can forge their own partnerships. Successful relationships look different depending on the goals, but productive cooperation cannot be built without positive relationships.

Second, institutional procedures can facilitate successful cooperation. In the N6 partnership, initiating a potential partnership begins with an “Opportunities Assessment,” so the decision to examine a potential initiative does not incur any risks. The CAOs meet regularly and play an active role in identifying areas for cooperation. Initiatives focus on administration and operations to facilitate political support, which is maintained through meetings of the mayors and through approval by councils and regular reporting. Despite an inclination to delegate agreement signing to staff, including the agreements themselves in reports to council helps support awareness at the council level.

Institutional procedures can also facilitate Indigenous-local government relationships. Federal, provincial, and territorial governments can create opportunities for cooperation, such as provincial funding competitions. Locally, Indigenous and municipal governments can design their institutional processes to be compatible on matters such as timelines.

In both interlocal and Indigenous-local cooperation, building relationships based on trust can be aided by the efforts of individuals and by the adoption of institutional processes to support potential collaboration.

Two Case Studies: Cooperation Between Local and Indigenous Governments

Alcantara and Nelles compared two relationships: one Strong Synergy relationship (Village of Teslin and the Teslin Tlingit Council in the Yukon), and one Business-as-Usual relationship (Sault Ste. Marie and the Garden River First Nation and Batchewana First Nation in Ontario). They found the relationships in these cases were explained by differences in institutions, resources, external interventions, history and polarizing events, imperative (perception of a shared problem and solution), and community capital.

The relationship between the Teslin Tlingit Council and Village of Teslin was productive and positive. The governments had a number of formal agreements governing matters such as a sewer line, a skateboard park, sustainability planning, and recreation, as well as informal cooperation on municipal services, boundary expansions, land use planning, and lobbying the territorial government. A modern treaty provided meaningful responsibilities and resources for the Indigenous government, improving its position as a partner with the municipality. The needs that matched between the two governments were high-level priorities, and thus collaboration was necessary and advantageous. Community capital in the area was high: community members on both sides shared a common civic identity, and borders between the communities were invisible.

In comparison, the relationship between the City of Sault Ste. Marie and the Garden River First Nation and Batchewana First Nation was strained and negative. Cooperation was hindered by incompatible government process timelines, higher levels of staff autonomy in the municipality relative to the First Nations, and poor fiscal health within the First Nations governments. Interventions by the Ontario government also impeded collaboration. Significantly, past events had already damaged the relationship between the governments, particularly allegations of an unpaid bill that distracted many participants. The needs shared by the governments were low-level and focused on services. Community capital was low: while there were many interactions between members of the communities, those interactions were often negative and characterized by racism. The Indigenous communities believed this hostility affected how the city responded to collaboration efforts.

For a more detailed description of these case studies, see Alcantara and Nelles (2016).

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Challenges of Interlocal CooperationDespite a record of successful efforts, interlocal cooperation can face challenges regarding resources, accountability, and democracy.

The most immediate challenge is resources. While interlocal cooperation may save money, sustaining the kind of collaboration seen in the N6 requires an investment of both time and resources. Maintaining communication can be difficult. Successful initiatives rely on the leadership of the CAOs and councils. Staff try to maintain continuity using education, and to keep the initiatives a priority by including them as an item at senior management meetings each month. Maintaining the partnership also relies on equitable sharing, so that one municipality is not providing a disproportionate share of the costs.

Another challenge is accountability, which involves democratic control, compliance, and continuous improvement in the use of public authority and resources. Accountability requires transparency; to understand interlocal cooperation in Canada, researchers and practitioners need access to the agreements being used in different municipalities. While such agreements are technically public documents, in practice those documents can be very difficult to obtain, even for seasoned researchers with the time and resources to collect them. It is not clear that members of the public are aware of the agreements in which their municipalities are engaged, or that they can gain access to the documentation governing these relationships. Transparency of these agreements is limited.

Access to Documents

Zachary Spicer’s experience while collecting data for the study presented at the conference demonstrated that staff members in many of the Greater Toronto Area municipalities examined have a limited understanding of the mechanics of their interlocal agreements. The accessibility of agreements was also generally low: to provide copies of their agreements, 19 of 27 municipalities in his study required a formal Freedom of Information request, and only two of the 19 provided the agreements within the provincially mandated 30-day timeframe. While these types of challenges provide additional hurdles to conducting research in this area, the biggest concern is that residents of these municipalities lack easy access to this documentation, if they wish to review it or better understand servicing in their communities.

Yet accountability concerns go well beyond transparency. Interlocal agreements shift traditionally conceived ideas about accountability in local government services. When a municipality uses tax revenues to provide a service directly, people know where to go with concerns about service performance. If there is a broken swing set, a pothole in the road, or poor garbage collection, it is clear who is ultimately responsible. If the problem is not addressed, an election serves as a clear forum for residents to punish those responsible if they are unsatisfied with a particular service. These mechanisms provide incentives for decision-makers to respond to residents.

However, when services are contracted out to other parties, whether private companies or other municipalities, the chain of accountability is broken or at the very least weakened, and it is easier for the parties involved to avoid blame for poor performance. When a municipality provides services to residents outside the municipality, it is not clear how committed the municipality is to maintaining the quality of those services. The challenge, then, is for municipalities to design arrangements that balance the benefits of flexibility in service provision that interlocal contracting allows with robust accountability and transparency regimes. This is no easy task.

Measuring Agreement Quality

Spicer modified a framework borrowed from the United Kingdom, called the Governance Assessment Tool (GAT), for use in a Canadian context, and applied it to agreements collected in the Toronto Census Metropolitan Area. The modified tool covers three dimensions: public access, internal governance, and accountability. It rates five measures of each on a scale of 1, 0.5, or 0. In his analysis of the Toronto CMA, Spicer evaluated 132 agreements signed between 1995 and 2013, and found that the agreements scored an average of only 4.66 out of a possible 15. Many agreements were poorly constructed, having been finalized without key information, such as servicing costs and resource allotment.

In addition to concerns about resources and accountability, interlocal agreements hint at big-picture questions about democracy, and the difference between government and service provision. In her presentation at the conference, Emily Harris suggested that provincial governments, by prescribing specific service levels, have taken a lot of the “local” out of local government service

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provision. Indeed, she argued that no one really knows where provinces stop and cities start in terms of who is responsible for how services are delivered. And, if residents understand that local governments are responsible for delivering services, there is the further question of who is actually responsible when services are delivered through an interlocal agreement.

KPMG’s 2011 “Core Services Review” for the City of Toronto found that 54 percent of the City’s operating budget was spent on provincially mandated services, such as emergency services and water treatment. Another 37 percent was spent on functions essential to city operations, including financial planning and information technology. The remaining 9 percent was spent on services categorized as “traditional,” “common,” or “need-based,” such as parks and business services. It seems that provincial control extends to 91 percent of the City’s expenditures.

Increasingly, local governments are using service delivery organizations to provide front-line services, choosing to focus on public policy development and program coordination – steering, as opposed to rowing, in Osborne and Gaebler’s (1993) terms. Service providers do not necessarily inspire loyalty or help “get out the vote;” instead, the key question for them is, “How can municipalities be more effective, efficient service delivery agencies?”

The provision of services using interlocal agreements can therefore serve as a window into much broader questions about local democracy. To what extent can municipalities

make meaningful choices about the delivery of provincially mandated services? How much democratic influence do local constituents have over such services?

How a city sees itself and its role can help explain its use of the shared-services model. These factors influence the way that we conceptualize and evaluate interlocal cooperation.

Thus interlocal cooperation raises issues of resources, accountability, and local democracy. Overall, however, research suggests that such challenges are not insurmountable. Evidence from the survey of municipal politicians and administrators that was mentioned earlier provides us with a picture of the type of challenges local decision-makers face in the execution of interlocal service agreements.

When asked to identify challenges, municipal officials most commonly identified communication problems between partners, financial disagreements, staffing changes, and concerns regarding the commitment levels of partner municipalities. Overall, however, these challenges are not reported with great frequency.

It seems that municipal officials are mainly concerned about risk and instability. If such conditions are present, agreements and relationships can be terminated, but only a minority of survey respondents had such concerns or experiences. Combined with evidence of high municipal satisfaction with existing agreements, this data suggests it is worth supporting greater use of interlocal agreements.

Figure 5: Span of Municipal Control in Toronto

Source: Emily Harris

5060

70

80

90

100

40

30

20

10

0

Percent of gross service costs ($8.7 billion)

Mandatory costsrequired bylegislation

i.e. emergencyservices and water

treatment

54%$4.7 billion

Essential to city operationsi.e. financial planning and elections

37%$3.2 billion

Traditional / common / need-based servicesi.e. parks, business services, youthdevelopment and waste diversion

9%$0.7 billion

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Lessons Learned

While interlocal agreements are not as common in Canada as they are in other jurisdictions, those that are in place are generally regarded as effective. Interlocal agreements can help address difficulties in the provision of services, and support productive and rewarding relationships, as seen in the examples of the N6 partnership and the collaboration between Teslin Tlingit Council and Village of Teslin. However, relationships between governments can also be unproductive and fraught with difficulties.

The following suggestions can help improve current and future agreements, by strengthening relationships, institutional processes, and accountability and democracy.

Relationship Building

• Governments must be prepared to invest time and energy into building and maintaining the relationships needed to establish and oversee interlocal agreements. Much of this work should occur before any type of agreement is signed, but it must also continue throughout the term of the agreements.

• Since much relationship-building occurs at the individual level, CAOs, mayors, councillors, and other decision-makers, such as band chiefs and administrators, need to make an effort to build

relationships with their counterparts. Much of the work involved in forming interlocal relationships occurs at senior leadership levels.

• When trust levels are low between Indigenous and local governments and this lack of trust impedes the development of relationships between counterparts, community members need to work to build relationships across divides.

• Sustained interlocal partnerships must be based on equitable cost-sharing between governments over the long term. Sharing requires agreements that are flexible and can be adjusted to meet changing conditions so that they remain fair and equitable to all parties during the life of the arrangement.

Institutional Support

• Municipal staff should provide consistent and regular updates to heads of councils on existing and potential interlocal agreements. Agreement monitoring may be costly, but it can help municipalities avoid unpleasant surprises and negative political reactions later in the relationship.

• In municipalities with interlocal agreements, those agreements should be a recurring item on the agenda of municipal managers’ meetings.

Figure 6: Interlocal Cooperation Challenges

0 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Communication

Percentage of Respondents Citing Challenges

Financial Disagreements

Council Buy-in

Sta� Changes

Partner Commitment Level

Changes in Agreement Structure

Monitoring Agreement

Provincial Policy Changes

Political Instability

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• Where possible, agreements should focus on administrative and operational matters rather than contentious issues.

• To facilitate future cooperation, governments should align their institutional processes on items such as approval timelines.

Accountability and Democracy

• Municipalities should post all interlocal agreements on their municipal websites.

• Agreements should include a clear indication of who is responsible for which actions and how decisions will be reached. Municipalities should ensure that staff understand the agreements in place across the organization.

• Contact information should be made available to members of the public for each agreement, in case they have questions about the service.

• Minutes should be made available for related meetings, clear budgeting should be required, and most agreements should be subject to an external audit or review.

• Municipalities should be mindful of issues related to accountability and pursue policy that would allow for more scrutiny of interlocal arrangements by the public.

Works CitedAlcantara, Christopher and Jen Nelles. 2016. A Quiet Evolution: The Emergence of Indigenous-Local Intergovernmental Partnerships in Canada. Toronto: University of Toronto Press.

Andrew, Simon A. 2008. Governance by Agreements: Why Do Local Governments Enter Into Multilateral Agreements? Paper 37. Detroit, MI: Working Group on Interlocal Services Cooperation, Wayne State University.

Cash, David. 2014. “An Insider’s Assessment of the York N6 Municipal Collaboration.” Public Sector Digest. December.

Dollery, Brian and Andrew Johnson. 2005. “Enhancing Efficiency in Australian Local Government: An Evaluation of Alternative Models of Municipal Governance.” Urban Policy and Research 23 (13): 73–85.

Henderson, Alexander C. 2015. Municipal Shared Services and Consolidation: A Public Solutions Handbook. New York, NY: Routledge.

KPMG, LLP. 2011. City of Toronto Core Services Review. Toronto: KPMG.

LeRoux, Kelly and Jared B. Carr. 2007. “Explaining Local Government Cooperation on Public Works: Evidence from Michigan.” Paper 26. Detroit, MI: Working Group on Interlocal Services Cooperation, Wayne State University.

Miljan, Lydia and Zachary Spicer. 2015. Municipal Amalgamation in Ontario. Vancouver: Fraser Institute.

Osborne, David and Ted Gaebler. 1993. Reinventing Government: How the Entrepreneurial Spirit is Transforming the Public Sector. New York: Plume.

Sancton, Andrew. 2000. Merger Mania: The Assault on Local Government. Montréal and Kingston: McGill-Queen’s University Press.

Shrestha, Manoj. 2005. “Inter-Local Fiscal Cooperation in the Provision of Local Public Services – The Case of Large US Cities.” Paper presented at the annual meeting of the American Society for Public Administration. Milwaukee, Wisconsin, April 2–5.

Slack, Enid and Richard Bird. 2013. Merging Municipalities: Is Bigger Better? IMFG Paper 14. Toronto: Institute on Municipal Finance and Governance, University of Toronto.

Spicer, Zachary. 2014. Linking Regions, Linking Functions. Inter-Municipal Agreements in Canada. IMFG Perspectives 10. Toronto: Institute on Municipal Finance and Governance, University of Toronto.

Spicer, Zachary. 2015. “Regionalism, Municipal Organization and Inter-Local Cooperation in Canada.” Canadian Public Policy 41: 137–150.

Thurmaier, Kurt. 2005. “Elements of Successful Interlocal Agreements: An Iowa Case Study.” Paper 2. Detroit, MI: Working Group on Interlocal Services Cooperation, Wayne State University.

Wood, Curtis H. 2005. “The Nature of Metropolitan Governance in Urban America: A Study of Cooperation, Conflict and Avoidance in the Kansas City Region.” Paper 9. Detroit, MI: Working Group on Interlocal Services Cooperation, Wayne State University.

Endnotes1. The presentations and ensuing discussions covered a range of expertise and insights on interlocal cooperation in Canada. Spicer, Nelles, and Alcantara are primarily academic researchers who have devoted significant attention to the question of why and how governments (both local and Indigenous) cooperate. Cash and Harris are practitioners who have extensive experience in government, forming and maintaining interlocal relationships. Both are now in private consulting practices, where they help local governments enter into and manage interlocal arrangements.2. Census Metropolitan Areas are defined by Statistics Canada and provide a standardized measure of metropolitan areas in Canada. 3. Conference presenter David J. Cash of Cash & Associates Inc. is a former CAO of Whitchurch-Stouffville, and was a member of the N6.

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