A merger is the restructuring of the whole or any part of a municipality with another municipality. Mergers result in the incorporation of a new municipality.
Because merger involves the structure of a municipality, all involved municipalities must agree to the restructuring. Municipalities considering a merger are encouraged to negotiate a voluntary restructuring agreement.
Section 53(1)(b) of The Municipalities Act provides the authority for municipalities to apply for a merger.
While not required by legislation, involved municipalities are encouraged to enter into a restructuring agreement to facilitate the merger.
Section 54 of The Municipalities Act permits voters of a municipality to petition their municipal council to apply for a merger. For more information on petitions, please see The Municipalities Act.
The Restructuring Agreement
Section 53 of The Municipalities Act outlines the topics that must be addressed if municipalities decide to enter into a restructuring agreement.
These topics are:
- Structure and Name of the New Municipality
The agreement must identify the parties to the agreement. It must also include a statement that indicates whether the municipalities involved intend to form:
- a new urban municipality; or
- a new rural municipality.
The agreement must also state the name of the new municipality. As part of the review process, a referral will be made to the Geographic Names Board to ensure that the new name is acceptable.
The councils may also give consideration to the creation of a new municipal seal, letterhead, logo and other identifiers that will bear the new name. These do not need to be part of the formal restructuring agreement.
- The Location of the Municipal Office
The restructuring agreement must identify the location of the municipal office.
- Restructuring Principles
The principles that have guided the municipalities through the process so far will be included as part of the restructuring agreement. Accordingly, the involved councils should take care in determining these principles to ensure they are the primary reasons for restructuring.
- Assets and Liabilities
All the assets and liabilities of the former municipalities will be transferred to the new municipality. However, municipalities may negotiate how the assets and liabilities of each municipality will be addressed in the new municipal structure. The outcome of these negotiations may then be included as terms and conditions in the restructuring agreement.
The disposition of grants, surplus funds, and reserves are issues that municipalities must discuss in the process of developing an agreement. The councils may decide to distribute surplus funds across the whole of the new municipality, or they may decide to temporarily retain assets in certain areas of the new municipality. In much the same way, the municipalities will have to consider the manner in which any liabilities of the parties will be addressed through the restructuring agreement.
- Special Levies
The restructuring agreement must set out the terms and conditions of any special levies negotiated by the involved municipalities. Levies may be adopted to:
- equalize municipal mill rates among the parties;
- renew municipal infrastructure;
- remedy and reclaim contaminated sites; and/or
- settle any liabilities of any of the parties.
- A Process for Integrating Municipal Administrations and Service Delivery Staffing Issues
Legislation states that all employees of the former municipalities continue to be employed by the new municipality with the same rights and duties until directed otherwise by the new council. It will be up to the new council to adopt any terms and conditions associated with staffing.
Consolidating Physical Operations
Prior to restructuring, municipalities may wish to negotiate several topics related to municipal operations. The agreement may address a variety of topics including:
- furnishing the municipal office;
- coordinating each municipality’s public vehicles; and
- addressing excess facilities and equipment.
It is also important to note that the records of each municipality involved in the restructuring agreement must be retained by the new municipality. Additionally, the municipalities may want to discuss how they will integrate computer and record management systems.
Consolidating Financial Operations
Prior to restructuring, municipalities may wish to negotiate several topics related to financial management. The agreement may address a variety of topics including:
- integrating accounting systems;
- making banking arrangements; and
- integrating insurance policies
- An Interim Council
Municipalities undergoing restructuring may wish to have an interim council established until a new council is elected to office. If this is the case, the restructuring agreement must make the necessary appointments pending the first election. This may be done to bridge the administration between the date the restructuring is to take effect and the time of the first election.
- Electoral Matters of the New Municipality
The restructuring agreement will set out the structure of the council of the new municipality. This involves identifying the number of council members and whether the head of council will be a reeve or mayor (rural or urban). For RMs this section will also include a description of each council division (or identify that this information is available in an appendix).
The restructuring agreement must also outline the following details for the first election of the new municipality:
- the name of a returning officer;
- the locations of polling stations;
- the deadline for receiving nominations;
- the date of the first election; and
- the date of the first council meeting.
Urban municipalities may also identify whether they wish to adopt a ward system for electing representatives to council. If this is the case, the matters that are to be considered by the wards commission must be included in the restructuring agreement.
- Establishing Areas for Different Services
Municipalities may wish to establish areas for the purpose of assigning different tax rates and providing different levels of service. This may be an important matter during the negotiation of a restructuring agreement where there is an area of one of the municipalities that currently has different service needs than the remainder of the municipalities, such as a resort area or hamlet.
- The Application of Tax Tools to Tax Levies
If applicable, municipalities may negotiate the application of tax tools to municipal tax levies. Possible tax tools include mill rate factors, a base tax, a minimum tax, and exemption agreements.
- Processes for Amending the Restructuring Agreement
Sometime after incorporation, the council of the new municipality may wish to amend the restructuring agreement. Therefore, the restructuring agreement must address the terms and conditions under which the restructuring agreement may be amended by the council of the new municipality and a minimum period, if any, during which no changes may be made. Provisions may restrict amendments to certain sections of the agreement. Another factor to consider may be the percentage of council needed to be in favour of an amendment.
- Dispute Resolution Process
The restructuring agreement must also include provisions for a process to resolve disputes that arise as a result of the restructuring. Possibilities include third party mediation or actions by the new council. The municipalities may wish to consult legal counsel during this phase of negotiating the restructuring agreement.
Optional Topics in a Restructuring Agreement
In addition to required elements, agreements may outline terms and conditions for other issues municipalities deem relevant to their restructuring initiative. The optional topics that municipalities choose to include will largely depend on the unique circumstances of their restructuring initiative. In addition, the detail of the terms and conditions that municipalities establish to govern certain issues will vary from case to case.
Sharing infrastructure and services may be at the heart of a restructuring initiative. Municipalities may wish to negotiate issues related to municipal services. Some of the services that could be addressed within the restructuring agreement include:
- fire and police services;
- water and sewage systems;
- garbage collection;
- road construction and maintenance;
- recreation and cultural services, including parks and libraries; and
- strategies to blend the former bylaws of the parties together and/or revise municipal development plans.
Finalizing the Agreement
The restructuring agreement must be signed by representatives of each municipality that is party to the agreement and each municipal seal is to be affixed. A restructuring agreement is a legally binding document. As such, before signing and submitting the agreement, each municipality may wish to have their solicitor review the agreement’s terms and conditions.
Should two or more municipalities decide to apply for a merger, or they have been sufficiently petitioned to apply for restructuring, each involved council must prepare a notice to the public outlining its intention to apply for a merger. Each council must undertake the public notification process. It is recommended that additional public consultation be carried out through the restructuring process to further engage the community. Additionally, it is recommended that a joint public meeting be held to hear representations from each involved municipality.
Please note that for the formal notice to the public and the public meeting the submission to government must be complete and available for public viewing. As such, it is recommended that the involved councils undertake additional public consultation early in the restructuring process to engage the citizens of the community. This will allow people who are interested in the restructuring to become involved in the process and allow council to address any concerns.
Additionally, by engaging the public early in the restructuring process, council can incorporate public input into the negotiation of the voluntary restructuring agreement.
The Notice to the Public
The notice must be:
- published once a week for two consecutive weeks in a locally circulated newspaper;
- personally delivered or sent by ordinary mail to:
- each person assessed on the last revised assessment roll with respect to land or improvements located in the area affected by the proposed application;
- the council of all involved municipalities affected by the proposal; and
- the board of all school divisions affected by the proposal.
The notice must contain:
- a map and description of the proposed merger;
- a brief explanation of the reasons for the proposal;
- a statement saying where the proposal may be examined;
- a statement saying that anyone who objects to the proposal may file a written objection, clearly explaining their reasons for objecting to the proposal, with the council within four weeks of the last publication of the notice; and
- the date, time, and place of a public meeting that will be held by council to discuss the proposal. The meeting must be held at least one week after the day on which the notice was last published, delivered, or sent.
The Public Meeting
Pursuant to Section 57 of The Municipalities Act, council must conduct the public meeting and all of the material required to be included with the submission pursuant to Section 59 of The Municipalities Act must be available for public review.
The Possibility of a Vote
Pursuant to Section 58 of The Municipalities Act:
- a vote may be called by a council that is party to the proposal;
- the Minister, if it is considered desirable and in the public interest to call a vote, may require a council to hold a vote; or
- the voters of a municipality may petition their council to hold a vote.
Once the municipalities have completed the required public consultation, an application for municipal merger may be submitted to the department. An application includes a completed Form E from The Municipalities Regulations and the following schedules:
- Schedule 1: a certified copy of the resolution of council requesting the merger.
- Schedule 2: a map or plan showing the boundaries of the merger, including a legal description of the proposed boundary change, verified by the administrators of the municipalities affected by the proposal.
- Schedule 3: an outline of the future growth or development of the municipality as a result of the merger.
- Schedule 4: a proposed operating and capital budget for the municipality formed following the merger.
- Schedule 5: a certified complementary resolution from the municipality affected by the merger.
- Schedule 6: a copy of the public notice and any written submission respecting the proposal that was received by council.
- Schedule 7: minutes from the public meeting held to discuss the proposal.
- Schedule 8: a statement setting out the population, total taxable assessment, total number of dwellings and lots for each municipality involved in the merger. Population and dwelling unit data can be found from Statistics Canada Community Profiles website.
- Schedule 9: attach a signed copy of any voluntary restructuring agreement.
If necessary, the Minister may request further information or clarification respecting any aspect of the application.
Additionally, the Minister may request the Saskatchewan Municipal Board to review an application for merger.
After a review of the submission, if the Minister is of the opinion that the municipalities resulting from the merger will be viable entities, the Minister may issue an order causing the municipalities to be restructured. The order will include the terms and conditions of the voluntary restructuring agreement and, if necessary, appoint persons to comprise an interim council until an election is held. The order will state the effective date of the merger and will describe the area being merged and the new boundary of the resultant municipality.
From the effective date of the order, all previous boundary description orders are repealed and the new boundary description is conclusively deemed to be the legal description of the municipality.
It is important to note that all bylaws and resolutions in force in the former municipality continue in force as bylaws and resolutions of the new municipality until they are repealed or others are made in their place. This primarily affects planning and land use bylaws that will follow the land and the resulting municipality will have to amend its planning bylaws to ensure they appropriately cover the newly merged area.
If the application to the Minister is rejected, the Ministry will provide reasons for the decision and publish a notice of the decision in a newspaper circulated in the area of the proposal. If an application be rejected, no subsequent application that is substantially similar may be made for three years.
Once a restructuring order is made, on and from the effective date of the order:
- subject to clause (c) below, the members of the council of the former municipality cease to have any further authority;
- the persons designated by the minister shall immediately make the necessary arrangements for the election of the council of the new municipality;
- the interim council designated in the order will continue in office until the first meeting of the elected council of the new municipality;
- if the order provides for the new municipality to be divided into wards, the order has the effect of a bylaw passed pursuant to section 83 of The Municipalities Act;
- all bylaws and resolutions in force in the former municipality continue in force as the bylaws and resolutions of the new municipality for one year or until they are sooner repealed or others are made in their place;
- each employee of the former municipality continues as an employee of the new municipality with the same rights and duties until the council of the new municipality otherwise directs;
- all taxes and local improvement charges due in that portion of the former municipality that is merged or incorporated as a new municipality at the time of the merger or incorporation are deemed to be taxes and charges due to the newly merged municipality and may be collected and dealt with as if they were imposed in accordance with this Act or The Local Improvements Act, 1993;
- all rights of action and actions by or against the former municipality may be commenced, continued or maintained by or against the new municipality;
- all land or improvements vested in the former municipality are vested in the new municipality and, subject to any trusts or other conditions that may be applicable, may be dealt with by the new municipality in its own name;
- all other assets, liabilities, rights, duties, functions and obligations of the former municipality are vested in the new municipality and may be dealt with by the new municipality in its own name; and
- any proceedings commenced by the former municipality pursuant to The Tax Enforcement Act on any real property within that portion of the former municipality that is incorporated as the new municipality are, for all purposes, deemed to have been commenced by the new municipality, and after the order is made the administrator of the new municipality shall carry out all the duties imposed by The Tax Enforcement Act respecting redemption and furnishing of returns to the Registrar of Titles, and title to the real property is to be issued in the name of the new municipality.
Once part of a municipality is merged with another municipality, as soon as possible after the date of the merger, the administrator of the municipality from which the land is taken shall provide to the administrator of the other municipality that is gaining the land:
- a copy of the assessment and tax roll for the part of the municipality that is added to the other municipality; or
- a statement setting out the pertinent details of the information reflected in the assessment and tax roll for that part of the municipality.