Report to: General Committee Report Date: May 15, 2007

SUBJECT: Proclamation of Bill 130 - Amendments to the Municipal Act, 2001

PREPARED BY: Kimberley Kitteringham, Deputy Town Clerk

RECOMMENDATION:

That the report entitled “Proclamation of Bill 130 - Amendments to the Municipal Act, 2001” be received for information purposes;

And that Staff report to Council on specific items arising from the amendments to the Municipal Act, 2001.

EXECUTIVE SUMMARY:

With the exception of a few sections, the amendments to the Municipal Act, 2001 (the “Act”) came into force and effect on January 1^st, 2007. The revised Act appears to confer broader authority on municipalities to govern their affairs with greater flexibility and fewer prescriptive requirements. The Act also introduces provisions designed to foster accountability and transparency with the provision for a code of conduct and the appointment of several integrity officers. These provisions are largely a result of the findings from the Bellamy and Sills inquiries and reflect a growing public concern for ensuring accountability and transparency in municipal administration. It is important to note that the Town of Markham already has a number of by-laws and policies in place to address such concerns. There are a number of areas noted within this report that require further review. The impact of these particular amendments to the Act will be the topic of future staff reports.

FINANCIAL CONSIDERATIONS:

Not applicable

1. Purpose 2. Background 3. Discussion 4. Financial

5. Others (Environmental, Accessibility, Engage 21st, Affected Units) 6. Attachment(s)

PURPOSE:

The purpose of this report is to provide Council with a high-level overview of the amendments to the Municipal Act, 2001 arising from Bill 130. Staff is undertaking a review of current Town by-laws, policies and procedures with a view to identifying opportunities and requirements provided by Bill 130 and will bring forward subsequent reports that will deal with these specific issues and provide recommendations.

BACKGROUND:

In June, 2004, the McGuinty government announced an initiative to review and update the Municipal Act, 2001. As part of this process, the province consulted with the municipal sector and received extensive input from municipal organizations such as AMO and AMCTO. The result of that process, Bill 130, is arguably more important than the 2001 version of the Act in terms of its impact on Ontario municipalities.

Bill 130 (An Act to Amend Various Acts in Relation to Municipalities) received first reading on June 15, 2006. Second reading was given on October 12, 2006. On December 12, 2006 the Bill was reported to the Legislative Assembly by the Standing Committee on General Government. The Municipal Statute Law Amendment Act, 2006 was enacted on December 20, 2006 and was proclaimed in force effective January 1, 2007.

OPTIONS/ DISCUSSION:

The revisions to the Act created by Bill 130 are intended to provide municipal governments with more flexibility in meeting their communities’ expectations and fulfilling their responsibilities. There are many minor amendments contained in Bill 130 which are largely administrative in nature. The changes of particular interest are contained in Schedule A to Bill 130. A complete copy of Bill 130 will be made available to Members of Council by the Clerk’s Department upon request.

For ease of reference, the amendments have been placed into the following five categories: 1. Expanded Municipal Powers; 2. Accountability and Transparency Provisions; 3. Policy Development; 4. Role of Council and Head of Council; and 5. Changes to Other Legislation.

1. Expanded Municipal Powers

Bill 130 has broadened the powers allocated to municipalities to provide services to residents in that municipalities may now provide “any service or thing that the municipality considers necessary or desirable for the public”, subject to certain restrictions. Bill 130 has also added the sphere of “business licensing” to the ten spheres of jurisdiction contained in the Act, in an attempt to make business licensing a more flexible process for municipalities.

In addition to retaining the spheres of jurisdiction and natural person powers as sources of authority, both lower and upper tier municipalities are now authorized to pass by-laws in the following areas:

1. Governance structure of the municipality and its local boards;

2. Accountability and transparency of the municipality and local boards;

3. Financial management of the municipality and local boards;

4. Public assets of the municipality;

5. Economic, social and environmental well-being of the municipality;

6. Health, safety and well-being of persons;

7. Services and things that the municipality is authorized to provide under S. 11(1); and

8. Protection of persons and property. including consumer protection.

In addition to the above-noted additional general powers, Bill 130 also confers the following specific municipal powers:

• Delegation of Powers and Duties – Municipalities now have expanded authority to delegate corporate powers pursuant to the “natural person power” and the authority to empower local boards, committees and individuals to deal with particular issues. This delegation may occur for several reasons, such as improved efficiency. Although a municipality may delegate any of its powers and duties, whether they are administrative, corporate, legislative or quasi-judicial, this authority is subject to certain restrictions.

For instance, while legislative or quasi-judicial powers may be delegated to a member of Council or a Council committee, only those matters of a minor nature may be delegated to an officer, employee or agent of the municipality. In addition, certain core functions of Council may not be delegated, such as the passage of a zoning by-law or the adoption of the budget.

• Business Regulation – Municipalities now have broader powers to license businesses, subject to certain limits. Specific new powers authorize municipalities to administratively suspend a licence prior to a hearing where there is a danger to health or safety. Municipalities are also now able to require a person pay an administrative monetary penalty if satisfied that the person has failed to comply with a requirement of a municipal licence or permit. Such an administrative penalty is an alternative to the traditional enforcement of by-laws via charges laid under the Provincial Offences Act and prosecuted through the courts.

• By-law Enforcement - Municipalities now have broader enforcement abilities, such as the authority to set fines for by-law offences and an administrative power of entry to determine by-law compliance, subject to special provisions respecting dwelling units.

• Economic Development – Municipalities have greater authority to offer financial incentives within a community improvement plan.

• Business Improvement Areas (BIAs) – Municipalities can now establish their own rules and conditions for BIAs. However, the current BIA rules and conditions in the Act will continue if a municipality does not exercise its new right to do so.

• Housing – Municipalities now have the authority to prohibit or regulate the demolition or conversion of residential rental properties with six or more dwelling units.

• Corporations and Municipal Service Boards – Municipalities now have the ability to establish corporations for any purposes related to their broad powers under their natural person powers, spheres of jurisdiction and/or newly broadened municipal powers. Prior to Bill 130, municipalities were quite restricted in this regard. In terms of Municipal Service Boards, Bill 130 allows municipalities to establish such a board for any municipal service or activity. Prior to Bill 130, municipal service boards could only be established with respect to public utilities, waste management, transportation systems, culture and parks & recreation, and parking except on highways.

2. Accountability and Transparency

The new provisions introduced in Bill 130 reflect a growing public concern for ensuring accountability and transparency in municipal administration, largely resulting from the Bellamy and Sills inquiries.

• Municipal Councils and local boards are now required to give public notice of all upcoming meetings. Under Section 238(2.1) of the revised Act, municipalities must amend their procedural by-laws to provide for public notice of meetings. In the past, many municipalities, including the Town of Markham, passed notice by-laws which centralized all forms, manners and times for notices required under various provisions of the Act. As a result of Bill 130, any provisions for public notice relating to Council or committee meetings are to be set out in the procedural by-law, regardless of whether or not they also appear in another by-law such as a general notice by-law.

• Minutes must be kept at all Council and local board/committee meetings (open and closed). This mandatory provision came into effect on January 1, 2007. In the case of a meeting of Council, the minutes must be made by the Clerk. For meetings of local boards or committees, minutes are to be made by the appropriate officer (who could well be the Clerk). The minutes are to be recorded ‘without note or comment” and the obligation for ensuring meetings are properly recorded appears to now be split between both the Clerk and the municipality.

• In addition to the existing authority to close meetings, a meeting may now be closed to the public for the purposes of educating or training the Members, provided that the business or decision making of a Council is not materially advanced during these meetings. Such closed education and training meetings must be advertised and a record of meeting must be recorded by the Clerk.

• Municipalities are now authorized to establish a code of conduct for Members of Council and local boards. Such a code may speak to matters like the ethical behaviour of Members of Council, standards for appropriate interaction with Town staff, residents and key stakeholders, and appropriate use of corporate resources. It should be noted that several Ontario municipalities have already established a code of conduct and Bill 130 simply now makes the authority to do so clear.

• Section 223.11(1) of the Act now allows Council to create a lobbyist registry and to track and control efforts by registered lobbyists in terms of interaction with Council and staff. The Act includes the option to appoint a Lobbyist Registrar to monitor lobbyist activity and conduct inquiries where there is activity by an unregistered lobbyist or there appears to have been a breach of the code of conduct. The Registrar has powers under the Public Inquiries Act and reports made by the Registrar are open to the public. The City of Toronto appears to be the only Ontario municipality that currently has a lobbyist registry. Toronto’s system was established in 2003 and is voluntary in nature.

In addition to the above accountability/transparency measures, municipalities can now appoint several Integrity Officers, namely, an Integrity Commissioner, an Ombudsman, an Auditor General, and a Closed Meeting Investigator. The appointment of these “Integrity Officers” is discretionary rather than mandatory. If appointed however, they would have wide ranging investigative powers, including the right to examine persons under Oath. If a municipality should decide to make any of these appointments, the duties do not have to be carried out by staff. The appointments can be done on an ad hoc basis or can be shared jointly by a number of municipalities.

At the time of the preparation of this report, the following municipalities have publicly expressed an interest in establishing at least one of the Integrity Officers noted below:

• Town of Markham - Auditor General
• City of Hamilton - Integrity Commissioner and Accountability and Transparency Sub-Committee
• City of Kitchener - Accountability and Transparency Committee
• Town of Meaford - Integrity Commissioner
• Town of Woodstock - Integrity Commissioner

It should also be noted that as a result of the passage of the City of Toronto Act, the City of Toronto in 2006 appointed individuals to the positions of Auditor General and Integrity Commissioner in 2006. The City also plans to appoint an Ombudsman in 2007.

A. Integrity Commissioner – Under S. 223.3(1) municipal Councils may now appoint an Integrity Commissioner to perform functions related to the application of the code of conduct and other procedures, rules and policies regarding the ethical behaviour of Members of Council and local boards. At the request of Members of Council or the public, the Integrity Commissioner would conduct an inquiry. The Integrity Commissioner has powers under the Public Inquiries Act and has the right to access all documents and reports necessary to conduct the inquiry and prepare a public report. If the Commissioner reports that a member of Council has contravened the code of conduct, a Council may either issue a reprimand or suspend the remuneration paid to the member for a period of up to 90 days.

B. Ombudsman – Under S. 223.13(1) municipalities may now appoint an independent Ombudsman who would (upon complaint) investigate any decision, recommendation or act in the course of the administration of the municipality. The Ombudsman is given broad investigative powers which are similar to those found in the Public Inquiries Act and include the right to access to any documentation. Upon completion of the investigation, the Ombudsman would prepare a public report containing such recommendations as he or she sees fit. There is no review by the courts of the proceedings or decisions of the Ombudsman, except on the grounds of jurisdiction.

C. Auditor General – Under S. 223.19(1), Bill 130 further permits the appointment of an Auditor General who has powers under the Public Inquiries Act and would be responsible for assisting Council in holding itself and municipal administrators accountable for the quality of stewardship over public funds and for the achievement of value for money in municipal operations. The responsibilities of an Auditor General do not include the responsibilities of the municipal external auditor.

D. Closed Meeting Investigator

Although this section has yet to be proclaimed, Bill 130 introduces provisions which will allow any person to request an investigation as to whether the municipality has complied with the requirements governing closed meetings. A municipality may appoint an investigator for this purpose. The investigator has the power to conduct an investigation and make recommendations to Council. If the municipality does not appoint an investigator, the investigation is conducted by the provincial Ombudsman appointed under the Ombudsman Act.

3. Policy Development

The concepts of transparency and accountability are also now captured in a section in the Act that requires Council to establish and maintain six specific types of policies:

1. Sale and other disposition of land;
2. Hiring of employees;
3. Procurement of goods and services;
4. Notice provisions;
5. Accountability and transparency of municipal operations; and
6. The delegation of its powers and duties contained within the Municipal Act or Planning Act.

Although this provision is not yet in force, municipalities are being advised by the Province to consider preparing the mandatory policies now (to the extent they do not already have them) in order to be ready for the proclamation.

The Town of Markham currently has policies relating to the sale and other disposition of land; hiring of employees; procurement of good and services, and notice provisions. However, staff will undertake a review of these policies to ensure the new provisions of the Act are being met. The policies relating to accountability and transparency and to the delegation of powers and duties will be completely new. As such, no decisions have been made with respect to how to proceed with this task. Staff will report back to Council in due course. In the interim, it is important to note that the Town currently demonstrates accountability through such means as business plans and financial reporting in the budget review process and through Council meetings, public information sessions, public hearings, and appropriate notice. New strategies, including customer service goals, review of corporate policies and procedures and enhanced corporate communications will also support the Town’s accountability and transparency measures.

In addition to the above, staff will be reviewing the ways and means that Council may wish to further delegate its powers and duties. A subsequent report on this matter will be brought back to Council.

4. Roles of Council and Head of Council

Role of Council

Bill 130 expands the role of Council to include two additional responsibilities: to ensure administrative/controllership policies, practices and procedures are in place to implement decisions of Council; and, to ensure the accountability and transparency of the operations, including activities of senior management. This latter responsibility is directly linked to the new accountability and transparent provisions introduced by Bill 130. Although these amendments highlight the need for Council to have an on-going interest in municipal operations, they were not intended to turn Members of Council into municipal administrators.

Head of Council

Bill 130 also strengthens the chief executive officer dimension of the role of head of Council and provides a detailed list in Section 226.1 of the new mandatory activities to be performed:

• Uphold and promote the purposes of the municipality;
• Promote public involvement in municipal activities;
• Act as representative of the municipality and promote the municipality locally, nationally, and internationally; and
• Participate in and foster activities that enhance the economic, social and environmental well being of the municipality and its residents.

Although the head of Council has always been responsible for presiding over Council meetings, Bill 130 expands this role to include presiding over Council meetings so that its business can be carried out “efficiently and effectively” and also charges the head with specific responsibility regarding accountability and transparency matters.

5. Municipal Finance Provisions

Bill 130 allows municipalities to adopt a budget for a period of five years. For second and subsequent years, the municipality is required to review the budget for the year, make required changes, and then re-adopt the budget for that year and subsequent years.

Bill 130 also contains several other relatively minor legislative and regulatory changes with respect to municipal finances related to the following areas:

Legislative Changes

• Property Taxation
• Tax Collection
• Tax Sales
• Fees and Charges

Regulatory Changes

• Area Rating
• Tax Sales
• Fees and Charges
• Local Improvement Charges

In terms of Legislative changes, of particular interest is the fact that municipalities were not given the broad taxation powers afforded to the City of Toronto through the City of Toronto Act. However, municipalities were given increased flexibility to collect for any services through a special services area levy.

As for regulatory changes, it is noteworthy that municipalities can re-advertise a property that has failed a tax sale and attempt to sell it a second time. In addition, housekeeping changes have been made in order to provide greater clarity and reduce previous process and notice requirements in favour of the municipality’s general notice policies. Municipalities can also now undertake any type of capital work as a local improvement.

Bill 130 has also brought about changes in the areas of debt and investment, municipal corporations, community improvement places, business improvement areas, municipal capital facilities and small business programs. The changes are largely housekeeping in nature and have resulted in the removal of detailed and prescriptive regulations.

Finally, Bill 130 has amended regulations relating to municipal services corporations which provides municipalities with broad permissive powers to establish corporations once a public consultation process has been conducted.

6. Changes to Other Acts

In addition to changes to the Municipal Act, 2001, Bill 130 also impacts several other pieces of legislation. The Acts affected include, but are not limited to:

• Highway Traffic Act
• Line Fences Act
• Liquor Licence Act
• Retail Business Holidays Act
• Home for the Aged and Rest Homes Act
• Ontario Heritage Act
• Housing Development Act
• Social Housing Reform Act
• Ontario Housing Corporation Act
• Municipal Freedom of Information and Protection of Privacy Act

Of particular interest to Council may be the new authority afforded to municipalities to:

· Set speed limits for all highways under municipal jurisdictions (not just in increments of 10 km/h and not to exceed 100 km/h);

· Regulate holiday store closings; and

· To pass by-laws extending the hours of sale of liquor by licence holders in all or part of a municipality.

FINANCIAL TEMPLATE: (external link)

Not applicable

ENVIRONMENTAL CONSIDERATIONS:

Not applicable

ACCESSIBILITY CONSIDERATIONS:

Not applicable

ENGAGE 21^ST CONSIDERATIONS:

Not applicable

BUSINESS UNITS CONSULTED AND AFFECTED:

Not applicable

RECOMMENDED BY:

________________________ _____________________________

Sheila Birrell Andy Taylor

Town Clerk Commissioner of Corporate Services

________________________

Catherine M. Conrad

Town Solicitor

ATTACHMENT:

None