District of North Vancouver reunification report by North Shore News

9.4 AGENDA INFORMATION

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Regular Meeting

Date: �,\

Other:

Date:._________

Dept. Manager

Director

The District of North Vancouver REPORT TO COUNCIL April 16, 2018 File: 01.0470.20/001.001 AUTHOR:

Mairi Welman, Manager Strategic Communications & Community Relations

SUBJECT:

North Vancouver Reunification Public Awareness and Engagement

RECOMMENDATION: That Council direct staff to determine public support for examining the costs and benefits of reunification by: •

•

Placing advertising in the North Shore News containing an open letter to the public from Mayor and Council regarding reunification of the District and the City of North Vancouver Conducting a random-sample, demographically and statistically representative public opinion survey of District and City of North Vancouver residents regarding attitudes about identity, joint service delivery, and reunification

REASON FOR REPORT: Council has identified the advancement of reunification of the District and City of North Vancouver as a priority in 2018. SUMMARY: Council wishes to determine whether there is support amongst residents of both municipalities to proceed with further professional investigation of the costs and benefits of reunification by conducting a random sample, statistically and demographically relevant public opinion survey. An open letter to the public published as an advertisement in the local paper will advise residents of the poll being conducted, and encourage their participation. The Mayor and Council of the City of North Vancouver were advised of District Council's intentions, and invited to participate in the process of seeking the public's views. City of North Document: 3528674

SUBJECT: North Vancouver Reunification Public Awareness and Engagement March 27, 2018 Page 2 Vancouver Council considered this invitation in its public meeting of April 9, 2018. While City Council did not indicate a readiness to participate in the survey, the matter was referred to staff for further examination of options and conditions for a potential joint review in the future. With this report, the research completed to-date by the District alone is being made available to the public and the public outreach will be supported by web and social media content.

BACKGROUND: North Vancouver District Council is in favour of exploring the costs and benefits associated with the reunification of the District and the City of North Vancouver. The District recently enabled resident discussion of reunification by establishing and supporting a "Blue Ribbon Committee" of District and City residents , which produced a report in late 2014 that identified the scope of issues associated with amalgamation. (Appendix A) This was followed by various additional background research reports completed by District staff, which are being publicly released at this time. Included in this research are case study summaries of relevant amalgamation process experiences in British Columbia; namely the Abbotsford-Matsqui merger achieved in 1995, and the Duncan-North Cowichan amalgamation study process, which is still underway. (Appendices 8 , C, D, & E). At this juncture Council wishes to take the discussion into the public realm.

ANALYSIS AND APPROACH The public outreach actions specifically requested by Council are an open letter to the public and a statistically relevant, demographically representative public opinion survey of District and City residents. These steps are being taken at this time to raise public awareness in both municipalities, move the conversation on reunification forward , and potentially create enough support for a reunification question to be placed on the ballot in both municipalities during the October 2018 election. Council's decision to proceed with a public conversation on reunification at this time is based on these key points: 1. The citizens of North Vancouver deserve efficient and effective local government, and they may be better served through reunification of the two North Vancouvers.

2. Community Planning and Transportation cannot be managed as effectively by separate organizations as they could with one integrated system.

Document: 3528674

SUBJECT: North Vancouver Reunification Public Awareness and Engagement March 27, 2018 Page 3 3. Our borders are artificial. North Shore residents already move freely between the two municipalities using services, roads and amenities in both communities. 4. A unified North Vancouver will have a stronger, more cohesive voice at the regional table, and will be able to act strategically on funding opportunities for infrastructure investments from the province and federal government. 5. It's time to investigate the costs and benefits of reunification , so that citizens can make a fully-informed , evidence-based decision about the issue for themselves.

Timing Subject to Council direction in accordance with this report, the public awareness plan would proceed as follows : •

Full page newspaper ads will run April 18 & 20, 2018

•

Survey will be conducted April 23 - May 1. Results will be reported in May.

•

Web content will be live April 17

•

Social media content will be posted from April 18 to May 1

Financial Impact: The total cost for the advertising and public opinion survey is estimated at $22,750.00.

Public Input: This project will offer the public in both the District and the City an opportunity to provide input on the topic of investigating reunification.

Conclusion: This report includes the actions requested by Council, along with recommended timing for bringing the discussion on reunification into the public domain.

Options: 1. Council approves the public awareness actions outlined in this report. 2. Council provides staff with alternate direction for public awareness. 3. Council does not approve moving forward with public awareness on reunification

Document: 3528674

SUBJECT: North Vancouver Reunification Public Awareness and Engagement March 27, 2018 Page 4 Respectfully submitted,

Mairi Welman Manager, Strategic Communications & Community Relations

Appendices: A.

DRAFT Open Letter for Newspaper Ad

North Vancouver Reunification Committee Final Report

Merging Municipalities - Insights on North Vancouver Reunification (January 2016)

D. Municipal Mergers in BC - The Abbotsford-Matsqui Amalgamation (June 2016)

E. Duncan-North Cowichan amalgamation Study Review {February 2018)

REVIEWED WITH:

D Sustainable Community Dev. D Development Services D Utilities D Engineering Operations D D D D

D D D D

Clerk's Office

External Agencies :

Communications

D Library Board

Finance Fire Services

Facilities

• ITS D Solicitor • GIS

Human Resources

Parks Environment

• • •

NS Health RCMP NVRC Museum & Arch.

D Other:

Real Estate

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SUBJECT: North Vancouver Reunification Public Awareness and Engagement March 27, 2018 Page 5 APPENDIX A

DRAFT text for open letter to the public newspaper advertisement:

Dear North Vancouver Residents; We all enjoy amenities that make this one ofthe best places in the world to live: a safe community, clean air, and unparalleled access to the forests, ocean and mountains. As your local District government, we take pride in delivering many of services that contribute to the high quality of our North Shore life. At the same time, we also face serious challenges. As our community and region grow and change, traffic congestion has become a real barrier to maintaining that quality of life. And the high cost of living is making things harder for our most vulnerable citizens, reminding us daily that housing affordability issues threaten the very fabric of our community. Now more than ever, we need strong local government to speak up for North Vancouver and tackle these challenges. These issues, and others, are being managed by two separate municipalities, and that means two governments, two mayors, two councils, and two administrations. We all use the same parks, play on the same sports teams, and sit in the same traffic. So we think it might make sense to task one government with solving these problems, and we'd like to hear what you think about that idea. We're convinced that, for instance, with one North Vancouver, we could more effectively plan and manage east-west transportation. We could have a stronger voice at the regional table to advocate for North Vancouver's interests. And we would likely be far better prepared to act quickly and take advantage of funding opportunities from the provincial and federal governments for affordable housing and other initiatives. Our intuition is telling us that not only is there no clear reason to have two separate governments, it might actually be holding us back from handling challenges more effectively, and pursuing opportunities. We've decided to ask you. We'd like to hear from North Vancouver residents to see if you think that, with the common challenges we're facing, now is the time to take a serious look at combining the District and the City of North Vancouver. It would be a long process requiring significant public consultation along the way, and we're ready to take the first step by simply asking the question. Next month, we're conducting a formal public opinion survey to ask whether you support the idea of your two communities partnering up to do the necessary research and determine the true costs and benefits of combining resources. We hope you'll participate, and provide your thoughts on the subject. Sincerely, (Council signatures)

Document: 3528674

North Shore Reunification Committee Report to Council In August, 2014 the District of North Vancouver Council created a Committee to examine the potential impacts of the reunification of the three North Shore municipalities, or a combination thereof. The Committee members deliberated extensively and shared thoughts, ideas, and observations around the notion of reunification. The Committee developed a framework of issues and information required to address them. The issues were grouped into the following six broad categories:

I Governance I

I Organizational

Financial

Operational Planning and Regulatory Cultural

In what ways would the North Shore community, operating as a combined municipality with a population of over 175,000 residents, change by having a single . voice? How would the internal management structure change and how would public perception of it be impacted by a reunification? Is it more cost effective to operate as one instead of three separate municipalities? How compatible are business practices and operational standards? How would the planning and regulatory considerations be dealt with in order to respect the varying characteristics of each municipality? All things considered, does the public in the three municipalities have an appetite for proceeding with further examination of reunification?

Within each of these categories the Committee has provided sub sets of issues and core questions, as well as noting the information required to examine them. The Committee's mandate was to determine the depth and breadth of analysis required to develop a fulsome understanding of the complexities of reunification. This mandate has been fulfilled. Respectfully submitted,

Jeff Muri, Chair

Final report

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Table of Contents Committee Composition ..................................................................................................... 3 Purpose of the Committee ................................................................................................. 3 Committee Findings ............................................................................................................ 4 Committee Conclusions ...................................................................................................... 5 Framework of Issues and Information Requirements ........................................................ 5 GOVERNANCE CONSIDERATIONS ...... ............................................................................. 6 ORGANIZATIONAL CONSIDERATIONS ............................................................................. 7 FINANCIAL CONSIDERATIONS ......................................................................................... 9 OPERATIONAL CONSIDERATIONS ................................................................................. 11 PLANNING & REGULATORY CONSIDERATIONS ............................................................. 12 CULTURAL CONSIDERATIONS ....................................................................................... 13 Appendix 1: Expanded Examples of Information Required ...................................... 14 GOVERNANCE INFORMATION ...................................................................................... 14 ORGANIZATIONAL INFORMATION ................................................................................ 15 FINANCIAL INFORMATION ............................................................................................ 16 OPERATIONAL INFORMATION ...................................................................................... 19 PLANNING & REGULATORY INFORMATION .................................................................. 21 CULTURAL INFORMATION ............................................................................................ 23 Appendix 2: Resources ............................................................................................. 24

Final report

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Committee Composit ion The committee comprised of nine citizens with representation from each of the three municipalities. There is a wealth of land use and infrastructure planning, governance, management and amalgamation experience in the committee. The appointed members are: l.

2. 3. 4.

5. 6. 7.

8. 9.

Mohammad Afsar Bob Boase James Boyd Helen Goodland John Hetherington Greg Lee Jeff Muri Terri Rear James Ridge

The Committee was supported by Graham Fane, contracted by the District of North Vancouver, who facilitated discussions and prepared drafts of the document.

Purpose of the Committee As cited in the mandate for this committee, "The purpose of this committee will be to conduct a high level analysis of the approach that should be taken in arriving at a thorough understanding of the reunification issue." The committee will develop a framework which identifies the relevant factors that should be examined in order to fully assess reunification. On completion of the work there will be a comprehensive framework for an analytical process that will guide a systematic and fulsome analysis of the proposition to reunify the City of North Vancouver, the District of North Vancouver and the District of West Vancouver back into a single North Shore municipality.

Final report

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Committee Findings The overarching finding of the committee is that any analysis of the impact of reunification should be conducted through a lens that focuses on changes to service levels and standards that might result from a reunification of municipalities. During committee discussions it became clear that the following questions need to be addressed regarding service levels and standards.

1. Do all the municipalities offer the same types of service? 2. Will the operational costs of sustaining service levels reduce, increase or remain the same with reunification? 3. Are there some services that are offered in one municipality that are not in the others {e.g. energy, WIFI, etc.) that should be extended or discontinued and what are the potential benefits or costs to do so? 4. If there are differences in service levels, quality, and standards of delivery among the municipalities, how would reunification deal with this, i.e. bring services up to the best, articulate an average or leave the difference intact? 5. Are there philosophical or business practice differences between the municipalities in providing services that would be impacted by an reunification? 6. How would the planning and regulatory services be dealt with given the varying characteristics of each municipality? 7. Will an amalgamated municipality that would become the fifth largest in Metro Vancouver provide the North Shore with improved access to and relationship with other government entities? During committee discussions it became clear that the following question also needs to be addressed regarding public support.

8. Given the above, will a well-informed community support continued investigation of reunification? These questions were formulated after the basic framework had been developed. In other words, the committee brainstormed an exhaustive list of issues, sorted them into logical groups, discussed the characteristics that defined the groups, and then developed the overarching questions to be answered .

Final report

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Co mmittee Co ncl usion s

1. The key questions for the individual citizen are: â&#x20AC;˘ â&#x20AC;˘ â&#x20AC;˘

Will my public services improve, deteriorate or stay the same? Will reunification result in a property tax increase, decrease or wi11 it stay the same? Will the new municipality better serve citizen and community interests?

Our framework shows that factual information could be assembled to calculate most costs and benefits so as to give the public and officialdom a reasonably accurate objective assessment of reunification. However, there are also qualitative elements that all stakeholders will have to assess and draw their own conclusions. 2. Gathering the information on reunification is a simple task on some fronts, e.g. the services provided by each municipality, but a complex one on other fronts, e.g. what the new organization would look like and what would be the human resource implications? The conclusion here is that resources will have to be brought to bear in the form of municipal personnel put to the task and the contracting of consultants to undertake the more complex and potentially contentious issues.

3. If this exercise is to proceed it will be important to engage all citizens so that they can provide their perspective.

4. There is a need to assess the level of interest of all North Shore citizens whether they would value the benefits of reunification sufficiently highly to justify the cost of doing so.

5. Should there be a next phase of examination, there is value in forming a citizen led committee to oversee the examination process.

Fram~work of Issues and Information Requ irements The framework which follows gives no weight or ranking of the issues but further work may suggest a ranking or weighting. The "Information required" column contains a high level reference to the type of information which is needed to further examine an issue. A more detailed description of the information requirements is presented in the appendix.

Final report

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GOV ERNAN CE C NS iD'"= Ri\TIO NS In what ways would the North Shore community, operating as a combined municipality. change by having a single voice?

Scope & Vision

CORE QUESTIONS OR ISSUES TO BE EXAMINED

INFORMATION REQUIRED

Would a reunification encourage a broader vision and scope than is currently the case in the three individual municipalities?

An analysis of whether and how a larger vision will result in more influence and better outcomes with neighbouring communities, relevant labour unions, greater Vancouver, the province and beyond.

• Will there be any change to

• Community Engagement

•

existing community consultative processes? Will there be any change to the ability of individual citizens to access elected officials, or senior staff? Would this be an opportunity to rethink the engagement processes? Would voter turnout change in an amalgamated municipality?

Resulting Governance Structure

What is the desired political structure of the amalgamated municipality and how would the existing structures be molded into a new structure?

Relationship with other entities

Would the increase in size bring any change in the relationship with other governing entities?

Final report

There needs to be an understanding of the current processes (list of community engagement policies, committee structures, etc.} in each of the three municipalities for a comparison of similarities and differences along with an assessment of how these could or would change under reunification.

Research needs to be done on the form and structure of a municipal governance structure for an entity of the proposed size and the proposed structure should be compared to existing structures. An analysis of other Canadian reunifications would be conducted for comparative purposes. Establish a liaison with other governing agencies (Metro Vancouver, neighbouring First Nations, etc.), to determine possible impacts on their service models.

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ORGANIZATIONAL CONSIDERATION How would the internal management structure change and how would public perception of it be im pacted by an reunification?

Organizational Process Review

Organizational Culture

Service Expectations of Our Communities

Final report

CORE QUESTIONS OR ISSUES TO BE EXAMINED Are there opportunities for improved organization as work is reorganized and streamlined? Perhaps best practices from the three can be knitted into one organization.

Is there is an opportunity to bring the best work cultures from the municipalities into the new organization?

In each of our North Shore communities, taxpayers, citizens and passers-by have come to expect a level of service quality. The question to examine is whether or not an reunification would impact service quality, and perspectives on service quality

INFORMATION REQUIRED An exploration of existing business process including recent process reviews, with a view to discovering best practices. In addition we need to examine the portability of best practices to the new entity. An exploration of the current organizational culture in each of the three municipalities, and an assessment of the impact of reunification on those cultures, as well as an analysis of opportunities and challenges of bringing a new culture to the new entity. There are at least two distinct elements of service to our communities. 1) Citizens who use services to enhance or protect quality of life. 2) Developers and business people who rely on the city or district to enhance economic opportunity and stimulate business success. The information to be gathered would address the possible impact that unification would have on these groups and their perception of service quality.

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Expectations of external stakeholders

Final report

Currently, the three municipalities work with external stakeholders. The question to address is whether or not an amalgamated entity would be more or less effective in working with Squamish nation, the Port, city of Vancouver, etc.?

Develop an understanding of any and all stakeholders, their formal or informal relationships and their level of satisfaction with current arrangements.

What will the impact be on the various non-profit agencies that operate on the North Shore? Any impact on their funding sources?

Need to discuss with the various non-profit agencies. (North Shore Community Resources Society, Family Services of the North Shore, North Shore Family Court and Youth Justice Committee, etc.) to determine the level of integration they have with the current three municipalities, and how that integration might change if there was an amalgamated entity.

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FINANCIAL CONSIDERATIONS Is it more cost effective to operate as one instead of three separate municipalities?

Commonly applied definition of service levels

CORE QUESTIONS OR ISSUES TO BE EXAMINED In order to facilitate comparison between municipalities there needs to be common benchmarks that can be used to match costs to service levels

Operating BudgetStaffing

What will be the impact on number of management positions, staffing economies of scale, consolidation of service locations, etc., and will the impact result in cost savings?

Operating Budgetunionized personnel

What will be the impact on the number of unionized personnel that may come with economies of scale, consolidation of services etc., and what is the status of current collective agreements?

Operating BudgetService levels/Models

What will be the impact on direct operating costs, economies of scale, consolidation of service locations, etc., and will the impact result in cost savings?

Final report

INFORMATION REQUIRED

An inventory of current service levels and models for each municipality, an identification of those that are common, and those that are unique. An 'all in' analysis of staffing costs which identifies current total costs for each municipality, current costs related to a commonly applied definition of service levels, and a projection of what those costs would be under an amalgamated entity as well as current and projected costs for unique service models. An 'all in' analysis of the costs of unionized personnel, which identifies current total costs for each municipality, current costs related to a commonly applied definition of service levels, and a projection of what those costs would be under an amalgamated entity as well as current and projected costs for unique service models. An 'all in' analysis of the costs of operating service levels (excluding staff and union personnel), which identifies current total costs for each municipality, current costs related to a commonly applied definition of service levels, and a projection of what those costs would be under an amalgamated entity as well as current and projected costs for unique service models.

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What will be the impact on overhead costs, economies of scale, consolidation of service locations, etc., and will the impact result in cost savings? How well matched are the capital structures of the organizations in Capital Assets terms of long term fixed assets and & Liabilities the liabilities associated with those assets? Would the reunification subject Financial one party to unreasonable Assets & exposure to the unfunded liabilities Liabilities of the other? - - -----+ There may be significant one-time costs associated with reunification, One Time including management buyouts, costs systems harmonization, physical moves, and other one-time work. Each municipality has a different tax rate for residential and business taxation. To the taxpayer Taxation there is the possibility that a reunification will alter their taxes in either a positive or negative way. Operating BudgetOverhead

Other Revenues

How well do the sources of other revenue match between organizations?

What is the current borrowing Credit Rating capacity of each municipality and & Borrowing how would total borrowing Capacity capacity be impacted by a _ __combinedentity?_ _ _ _ _

Final report

I An 'all in' analysis of overhead costs which includes total overhead (HR, IT, Finance, Corporate Planning etc.) for an amalgamated entity. A comparative analysis of capital assets and liabilities attached thereto as well as an analysis of redundancies or efficiency gains that could come I from a reunification of capital assets. A comparative analysis of financial assets including a listing of a II unfunded liabilities by municipality with the amounts attached.

I A projection of all one-time costs attributable to each municipality, and

I to the new combined entity.

A comparative analysis of all classes of taxpayer in each of the three municipalities as well as a projection of the tax obligation of each class of taxpayer in an amalgamated entity. A comparative analysis including a listing of other current revenues (i.e. revenues not already included above) by category and amount for each municipality, as well as a projection of opportunities for revenues in a combined entity A comparative analysis of each municipality's current leverage position and a projection of how that leverage position might be impacted through reunification ____ _

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OPERATIONAL CONS IDERATIONS How compatible are business practices and operational standards?

CORE QUESTIONS OR ISSUES TO BE EXAMINED

Infrastructure compatibility

The three municipalities have significant investments 'in ground' and above ground infrastructures. In order to experience efficiency gains or cost savings we must understand the degree to which infrastructures are or can be homogenized.

Equipment Compatibility

How well do operational pieces fit together such as field equipment, software and other operating assets?

Asset Management

How compatible are the systems for asset management and how comparable are assets in terms of condition and maintenance history? Some ofthe benefits of reunification have already been realized through shared service agreements.

Shared Services

Final report

The question is whether or not reunification is necessary to realize savings and efficiency gains, or can those gains be realized through enhanced shared service agreements?

INFORMATION REQUIRED A comparative analysis of infrastructures including inventory and specifications of current infrastructure assets, an assessment of the degree of compatibility of those assets, and a projection of the impact on the management of those assets going forward as a combined entity. A comparative analysis of equipment including inventory lists of functional equipment by type, a statement as to their condition and whether mobile or fixed in place. (Can they be used by the new municipality in a new way)? A comparative analysis of asset management practices by municipality, including an analysis of the degree of compatibility moving forward. A comparative analysis of shared services includes a listing of all current shared service arrangements with description of the agreement, as well as an (best available practice); analysis of the potential for increased shared service arrangements going forward.

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PLANNING & RE ULATORY CONSIDERATIONS How to deal with planning and regulatory considerations, respecting the uniqueness of each municipality while capitalizing on planning for an amalgamated municipality?

~ - - -- - - - - - - -- - - - - -- - -- - - - - CORE QUESTIONS OR ISSUES TO

Land use & transportation planning

Currently, each of the three municipalities engage in land use and transportation planning independently of each other, although all function within the various regional planning frameworks. Reunification could create an environment of integrated planning for three diverse regions of the north shore.

Regulation and bylaws

Are there benefits in consolidating regulations and bylaws, harmonizing business licensing for cross-jurisdiction businesses?

Risk Management

What are the differences in risk exposure and risk tolerance and how might those differences affect risk management? What complexities will arise if we try to develop a unified North Shore risk management strategy?

Ecosystem services

Are there benefits expanding and harmonizing the valuation of ecosystem services?

----

Final report

INFORMATION REQUIRED

BE EXAMINED

A comparative analysis of the differences and the challenges of resolving issues such as pace of development, the value of development as a means to support public amenity investment, pace and scope of response to climate change , tolerance for innovation, etc. between the three municipalities. A comparative review of building bylaws and history of interpretations for each municipality, including an analysis of the similarities, differences, and possibly conflicting by-laws currently in existence. A comparative analysis of risk and hazard management programs that are unique to each municipality, programs that are currently shared by all three, and programs that would change or be created under an amalgamated approach going forward . Ecosystem services have been evaluated by CNV but not DNV and DWV. The CNV study should be brought forward for evaluation.

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CULTURAL CONSIDERATIONS All things considered , does the public in the three municipalities have an appetite for proceed ing with further examination of reunification? CORE QUESTIONS OR ISSUES TO BE EXAMINED Does each municipality have its own identity?

Would reunification change the culture of the new community? Community Characteristics

Is it important to preserve distinct municipal characteristics? Is each community willing to make the investment of time and money to continue the dialogue towards unification?

Final report

INFORMATION REQUIRED

A thorough and complete representation of views from each municipality, gathered from a variety of means to ensure there has been an open and encouraging dialogue about the issues.

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Appendi,c 1: Elcpanded Examples of Information Requ ired

These are not exhaustive lists of required information . They are starting points in the search for relevant information.

GOVERNANCE INFORMATION

INFORMATION REQUIRED

•

Scope & Vision

Community Engagement ----

Resulting Governance Structure

Relationship with other entities

Final report

The current scope and vision statements from each of the municipalities in order to evaluate the compatibility of the three • An assessment of the prospect of creating a single vision and scope that builds on the three municipalities while incorporating the implications of a larger entity. _ _ ________ _ "There needs to be an understanding of the current processes (list of community engagement policies, committees' structure, etc.) in each of the three municipalities for a comparison of similarities and differences." • list of community engagement policies, committees' structure, etc. "Research needs to be done on the form and structure of a municipal governance structure for an entity of the proposed size and the proposed structure should be compared to existing structures." • • • •

What are the options (wards, at-large, etc.)? What is the optimal Council size? What are the implications for managing the school system? Are there additional municipal legal responsibilities that come from an increase in size (population or geographical)? "Establish a liaison with other governing agencies (Metro Vancouver, neighbouring First Nations, etc.), to determine possible impacts on their service models.." • • •

Metro Vancouver, Province of BC, North and West Vancouver School Districts., Neighbouring First Nations, etc.)?

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ORGANIZAT10NAL INFORMATION INFORMATION REQUIRED

Organizational Process Review

Organizational Culture

"An exploration of existing work processes including recent process reviews, with a view to discovering best practices. In addition we need to examine the portability of best practices to the new entity." • Business process reviews • Existing business process/procedures "An exploration of the current organizational culture in each of the three municipalities, and an assessment of the impact of reunification on those cultures, as well as an analysis of opportunities and challenges of bringing a new culture to the new entity." •

Service Expectations of our Communities

Expectations of external stake ho Ide rs

The information to be gathered would address the possible impact that unification would have on these groups and their perception of service quality. "There is a need to establish a liaison with the various non-profit agencies (North Shore Community Resources Society, Family Services of the North Shore, North Shore Family Court and Youth Justice Committee, etc.) to determine the level of integration they have with the current three municipalities, and how that integration might change if there was an amalgamated entity." • • •

Final report

Cultural assessment surveys, employee satisfaction, etc.

There are at least two distinct elements of service to our communities. 3) Citizens who use services to enhance or protect quality of life. 4) Developers and business people who rely on the city or district to enhance economic opportunity and stimulate business success.

Agreements, MOUs, etc. Develop a list of any and all stakeholders Are there current commitments in terms of services, projects, programs or other initiatives?

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FINAN IAL IN FORMATION INFORMATION REQUIRED

Commonly applied definition of service levels and models

Operating BudgetStaffing

"An inventory of current service levels and models for each municipality, an identification of those that are common, and those that are unique.''

•

An inventory (and benchmarking exercise) that includes: Service definition and description, Service Level, Service Objectives and influencing conditions (e.g. Access, demographics and economic conditions). "An 'all in' analysis of staffing costs which identifies current total costs for each municipality, current costs related to a commonly applied definition of service levels, and a projection of what those costs would be under an amalgamated entity as well as current and projected costs for unique service models."

• •

Number of positions in each municipality, Remuneration and termination costs, Attrition/retirement estimates • Estimates of positions needed in combined entity • An accurate projection of staff costs, with and without reunification going forward. Comparison across entities to allow for new benchmark • "An 'all in' analysis of the costs of unionized personnel, which identifies current total costs for each municipality, current costs related to a commonly applied definition of service levels, and a projection of what those costs would be under an amalgamated entity as well as current and projected costs for unique service models."

•

Operating BudgetCollective Agreements

Operating BudgetService levels/Models

• • • •

A listing of all collective agreements and their termination dates -Financial commitment for current contracts Flexibility in Contracts for terminations/reorganization Stakeholder listing - Unions involved "An 'all in' analysis of the costs of operating service levels (excluding staff and union personnel), which identifies current total costs for each municipality, current costs related to a commonly applied definition of service levels, and a projection of what those costs would be under an amalgamated entity as well as current and projected costs for unique service models." i.e. Services provided in only one municipality.

•

• Final report

Listing and description of all services provided by municipality highlighting any different services and different service levels Cost of differential for service levels not found in all municipalities

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"An 'all in' analysis of overhead costs which includes total overhead (HR, IT, Finance, Corporate Planning etc.) for an amalgamated entity."

•

Operating BudgetOverhead

Capita I Assets & Liabilities

Financial Assets & Liabilities

One Time costs

Listing and description of all Major Overhead costs provided by municipalities highlighting any differences, such as: Administration (support within a service area) 0 Corporate (HR, Finance, IT, Corp Planning) 0 Facility (space allocations) 0 Fleet (managed centrally) 0 Project Technical Services (supporting project planning, 0 design and implementation • Cost savings from removing duplicates • more detaHed financials and reconciliation of line items to allow for comparison "A comparative analysis of capital assets and liabilities attached thereto as well as an analysis of redundancies or efficiency gains that could come from a reunification of capital assets."

•

Listing of fixed assets, current value, 0 any debt owed on the assets and 0 replacement date 0 Comparison of Capital asset budgets • • Pro Forma combined capital Budget "A comparative analysis of financial assets including a listing of all unfunded liabilities by municipality with the amounts attached."

•

Listing of all unfunded liabilities by municipality with the amounts attached. • List of all non-capital assets, including reserves. • Listing of all Financial assets at FMV (Fair Market Value) • Reconciliation of unmatched financial line items due to differences in accounting practice "A projection of all one-time costs attributable to each municipality, and to the new combined entity."

• •

Taxation

Final report

Listing of all one-time costs showing calculation of the cost by municipality. A projection of one-time costs to be incurred by the new entity .

"A comparative analysis of all classes of taxpayer in each of the three municipalities as well as a projection of the tax obligation of each class of taxpayer in an amalgamated entity."

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- - -

• • •

Listing of the tax revenues by category for each municipality Comparison of Tax rate for each zone, tax base for each zone scenario analysis for various methods of combining and reconciling the differences • Are the tax bases different? • How are the different tax b.:ises in each municipality changing? • What are the multipliers/tax rates for each class in each ,___ _ __ _~ ___ _ municipality? __ _ _ __ _ _ "A listing and comparative analysis of other current revenue by category and amount for each municipality, as well as a projection Opportunities for revenue in combined entity." Other Revenues • Listing of other revenue by category and amount for each municipality • Opportunities for revenue in combined entity, • impact of opportunities not used in other municipalities ''A comparative analysis of each municipality's current leverage position and a projection of how that position might be impacted through reunification ." • Credit Rating & Borrowing Capacity

•

Final report

Financial valuation of impact of different credit rating on Borrowing level, interest costs and PV (Present Value) for each municipality Different borrowing types and limits, o MFA (Municipal Financing Authority debt, o Letters of Credit, o non-bank borrowing (e.g. vendor) An analysis of credit rating and borrowing capacity of an amalgamated entity.

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OPERATIONAL INFORMATION -

----------

-------------------

INFORMATION REQUIRED

"A comparative analysis of infrastructures including inventory and specifications of current infrastructure assets, an assessment of the degree of compatibility of those assets, and a projection of the impact on the management of those assets going forward as a combined entity." •

Infrastructure compatibility

• • •

Existing reports about and differences in the municipalities' deferred maintenance requirements Differences in existing long term plans for future projects development, i.e. need, location, cost estimates Differences in the definition of infrastructure and what it includes/ does not include? Differences in the design, investment, operational policies, practices and accomplishments related to public infrastructure that have to be addressed, such as: o water pressure, o system and component maintenance schedules, etc.

"A comparative analysis of equipment including inventory lists of functional equipment by type, a statement as to their condition and whether mobile or fixed in place (can they be used by the new municipality in a new way?). Equipment Compatibility

Asset Management

• •

Inventory lists of functional equipment including specifications A report on potential aspects of incompatibility relating to equipment, software licensing, etc. • Statement of condition for all classes of equipment • Location and potential mobility of all classes of equipment "A comparative analysis of asset management practices by municipality, including an analysis of the degree of compatibility moving forward." • •

Final report

Listing of asset management policy and practice by municipality highlighting any differences An assessment of the need for and complexity of achieving a uniform approach going forward.

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,~ -

"A listing and comparative analysis of shared services of all current shared service arrangements with description of the agreement, as well as an (best available practice), analysis of the potential for increased shared service arrangements going forward ."

Shared Services

• • • •

Final report

listing of all current shared service arrangements with description of the agreement An analysis of how existing shared service arrangements might be impacted by a reunification? An analysis of potential opportunities for shared services coming from existing service models for each municipality. An analysis of how shared services are currently, or could be extended to neighbours (such as the Squamish nation, the port etc.)

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20 I I

PLANNING & REGULATORY INJ:O MATION

INFORMATION REQUIRED

"A comparative analysis of the differences and the challenges of resolving issues such as pace of development, the value of development as a means to support public amenity investment, acceptance of climate change, tolerance for innovation, etc. among the three municipalities. • North Shore (NS) development maps and projected growth studies (e.g. City of North Vancouver (CNV) 100 year plan, University of British Columbia (UBC) 4m people study, etc.).

•

Land use & transportation planning

Comparisons & review of regional, provincial and national commitments (signatory to climate goals, etc.), Official Community Plan zoning policies, development bylaws, planning and development strategies and projects. Review of Metro Vancouver regional growth strategy, affordable housing targets, transportation plans Memberships in city "clubs" such as C40, ICLEE, etc. and commitments implied from such memberships.

•

Review of NS transportation and ridership studies (CNV transportation study - 85% of Single Occupancy Vehicle journeys within the north shore).

• •

Review ofbuilding stock- age, type, use, etc. Map of distribution of demographics and aging - Brooks & Associates GIS map of age of homeowners in Edgemont /Delbrook, etc. Surveys of developmentindustry: Urban Developn)ent Institute, National Association of Industrial and Office Properties, Canadian Home Builders Association

•

• • •

Comparison of total annual development and building permit revenues and costs and as% of total revenues List of citizens' commissions and advisory boards and their terms of reference Extent and impacts of sea -level rise and other natural hazards .

•

Comparison of development cost charges (DCCs) and total cost of development {NAIOP survey) Comparison of funding strategies for community amenities and other capital investments (e.g. how to evaluate the fact that the users of recreation centres are in CNV but DNV has the land and therefore pays for them) . CNV builds amenities into residential development projects, DNV & DWV do not.

Final report

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211

j• •'.

"A comparative review of building by-laws and history of interpretations for j each municipality, including an analysis of the similarities, differences, and possibly conflicting by-laws currently in existence.'' Regulation and bylaws

Risk Management

•

• •

Review of building by-laws and history of interpretations . Review of fees and processes Number of experts {such as green building, social housing, healthcare liaisons, etc.)

"A comparative analysis of risk and hazard management programs that are unique to each municipality, programs that are currently shared by all three, and programs that would change or be created under an amalgamated approach going forward ."

•

Review of all insurance policies coverage, deductibles, etc. for limits, type of coverage and any self-insurance programs • Review all other risk and hazard management programs Ecosystem services have not been evaluated by DNV and DWV. Ecosystem services

Final report

RE. CNV study httQ:L[www2.cnv.orr!./Cit~ShagingL12aeersLDiscussion%20Pa1;1er%20%20Sustaining%20Our%20Natural%20Cagital.Qdf

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CULT RAL INFORMA ION

INFORMATION REQUIRED

"A thorough and complete representation of views from each municipality, gathered from a variety of means to ensure there has been an open and encouraging dialogue about the issues."

Community Characteristics

• •

• • •

Final report

Demographic analyses required for each of the municipalities An assessment of ethnic diversity in the North Shore communities Input from the communities - survey, town hall meetings, community gatherings. Any past surveys done? Input from the various neighborhoods and communities. List of arts and cultural services offered in each of the municipalities.

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Appendix 2: Resources

• • • • • • • • • • • • • • • • • • • • • • • • • • • • • •

Terms of Reference DNV 2013 Annual Report CNV 2013 Annual Report DWV 2013 Annual Report Comparison Data for 2012 Too Big, Yet Too Small The Mixed Legacy of the Montreal and Toronto Amalgamation (2014) Merging Municipalities is Bigger Better (2013) Quantifying the Costs and Benefits to HRM, Residents and the Environment of Alternate Growth Scenarios Final Report (2013) Bibliography of Rescaling and Regional Cooperation (2010) 5t. John's Amalgamation Review (2011) Inter-Municipal Collaboration Through Forced Amalgamation A Summary of Recent Experiences in Toronto & Montreal (2007) Are Services Delivered More Efficiently After Municipal Amalgamation (2005) Citizen Satisfaction with Municipal Amalgamation (2005) Why Municipal Amalgamation Halifax, Toronto, Montreal (2003) The Financial Implications of Amalgamations The Case of the City of Toronto (2001) Local Government Amalgamations Discredited Nineteenth-Century Ideals Alive in the Twenty-First (2001) Transitional Impacts of Municipal Consolidations (2000) Amalgamation vs. Inter-Municipal Cooperation Financing Local and Infrastructure Services (2000) Municipal Consolidations in the 1990s An Analysis of Five Canadian Municipalities Reducing Costs by Consolidating Municipalities New Brunswick, Nova Scotia and Ontario (1996) North Vancouver City and District The Amalgamation Issue (1987) Staff Amalgamation Study Committee Report on Joint Services of the City and District of North Vancouver (CNV DNV 1977) Amalgamation Correspondence {1974-1983) Amalgamation Correspondence (1969-1971) Amalgamation Brochures (CNV DNV1968) Proposed Amalgamation Agreement (CNV DNV 1968) Staff Amalgamation Study Committee Report on Facilities (CNV DNV 1968) Staff Amalgamation Study Committee Report on Finances (CNV DNV 1968) A Statement on Amalgamation (DNV CNV 1968) North Shore Amalgamation Study Committee Final Report and Recommendations {DNV 1966)

Final report

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24 1

• • • • • • • • •

Integration of the City of North Vancouver and The District of North Vancouver An Economic Analysis (CNV 1966) A Perspective on Amalgamation (CNV 1966) City Hall Study Preliminary Report on Space Requirements (CNV 1965) City Hall Report (CNV 1965) Amalgamation Study (CNV DNV DWV 1963) Amalgamation of CNV and DWV Fire Departments (DNV 1960) Saskatchewan Ministry of Government Relations A Guide to Voluntary Municipal Restructuring (2008) BC Ministry of Municipal Affairs Managing Changes to Local Government Structure in British Columbia A Review and Program Guide (2000) CNV Restructure Report to Council (2014)

Final report

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2s I

MERGING MUNICIPALITIES

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insights on north vancouver reunification

DNV CORPORATE SERVICES | JANUARY 2016

Contents .................................................................................................................................................. 1 > EXECUTIVE SUMMARY ........................................................................................................ 3 > INTRODUCTION .................................................................................................................... 5 1. BACKGROUND AND CONTEXT ........................................................................................... 6 1.1 Historical Background ....................................................................................................... 6 1.2 Past Initiatives .................................................................................................................. 7 1.3 Legislative Context ..........................................................................................................10 1.4 National and International Context ...................................................................................10 1.5 Regional Context .............................................................................................................12 2. UNDERSTANDING AMALGAMATION IN NORTH VANCOUVER ........................................14 3.1 Reasons for Reunification ................................................................................................15 3.2. Evaluating Reunification .................................................................................................16 3.2.1 Cost Efficiency ..........................................................................................................16 3.2.2 Functions and Services .............................................................................................20 3.2.3 Conclusion ................................................................................................................24 4. DRAWBACKS AND CONSIDERATIONS ..............................................................................25 4.1 Service Delivery...............................................................................................................25 4.2 Appropriateness ..............................................................................................................26 4.3 Equity and Fairness .........................................................................................................27 4.4 Transition Costs and Complexity .....................................................................................28 > DRAFT CONCLUSIONS ........................................................................................................30 > BEST PRACTICES ................................................................................................................32 > RECOMMENDED NEXT STEPS ...........................................................................................33 PROPOSED REUNIFICATION RESEARCH PLAN: 2016-2018 ..............................................34 APPENDICES ...........................................................................................................................38 Appendix A ............................................................................................................................38

DNV | JANUARY 2016

> EXECUTIVE SUMMARY Around the world local governments are counted on to perform a large array of functions. In Canada, these functions include political representation of citizens on local issues and providing a basket of local services, from firefighting to parks planning. In large continuous urban areas, however, it is often unclear where boundaries for political representation should begin and end, while many services that local governments are charged with providing spill between municipalities and even across entire regions. North Vancouver has a unique municipal history, and a distinct local governmental structure. The re-merging of the District and the City, separated over a century ago, is a conspicuous and perpetual topic of debate. But upon close examination many of the broader issues around local governmentsâ&#x20AC;&#x2122; jurisdiction are present in this â&#x20AC;&#x153;reunificationâ&#x20AC;? debate: how do we determine which citizens a local government should represent? Why are borders drawn where they are between municipalities? And which services should local governments provide? The push for municipal consolidation is often driven by the same imperatives: a quest for more appropriate political representation, a desire for cost efficiency in local government, or a belief that a reduction in the number of governments is best for the effective delivery of services. These, too, are present in the debate on North Vancouver reunification. North Vancouver, however, can benefit from research on previous restructurings to understand which benefits are most likely to be gained from a merger, and at what cost. The first lesson is that local context is important. This refers to a host of factors that varies from city to city: how big the cities are; how well-developed the region is, and its mix of urban and suburban forms; which services are provided, and at what level; what form political representation takes; what the history of the cities are, including how closely they have cooperated in the past; and the attitudes of citizens towards amalgamation. For North Vancouver, one of the most important considerations is local political structure. Municipalities in the province provide local services in conjunction with Regional Districts, a system that has been praised for its flexibility and effectiveness. In the Lower Mainland, Metro Vancouver provides many of the services that impact the region as a whole, and has the ability to add more as its members see fit. This flexibility has led to a generally wellregarded equilibrium: a multiplicity of small local governments represent comparatively small

DNV | JANUARY 2016

groups of citizens and attend to local matters, while Metro Vancouver takes responsibility for tasks such as air quality, solid waste disposal, and regional planning. Indeed, one commentator noted, in comparing BC’s inaction to other Canadian provinces’ rush to amalgamate municipalities, that “British Columbia’s position on consolidation has been attributed, in large part, to the success of the province’s regional districts in responding to necessary changes in service delivery and municipal governance.” Understanding this local context informs the question of whether North Vancouver residents will benefit from an amalgamation. Because of the effectiveness of the Regional District system, many of the benefits of amalgamation that other provinces’ municipalities may have realized would not apply. Importantly, this includes most of the “cost efficiency” argument: in general, the regional services that represent economies of scale are already being provided on a regional basis: liquid and solid waste disposal, water provision, and so on. Combined with the high one-time costs of merging municipalities and the tendency of unionized wages to harmonize upwards, the “cost savings” rationale for a reunification is tenuous at best. This does not mean that reunification should be abandoned, however. The research also indicates that there are a number of areas where amalgamation results in clear benefits. One is strategic capacity: a united North Vancouver could do more than two separate municipalities. In regional forums, negotiations with external partners, and intergovernmental relations, North Vancouver would have a stronger voice and more influence. Another is North Shore transportation and planning. One municipality would be able to take a holistic view of the area, optimizing transportation and planning initiatives to reflect current work and residence patterns. Having two municipalities does not mean that services for residents are suffering, but it does mean that collectively we are missing opportunities – opportunities that could be realized by a unified local government. A firm determination of whether reunification will be good or bad for North Vancouver may not be possible to arrive at, just as it is difficult to pick an optimal size for a municipality. But we are able to draw out the key benefits and pitfalls of a merger, and use these to inform engagement and planning on the issue. Assertions in the debate on reunification in North Vancouver have a tendency to repeat themselves; thorough study of the issue can equip council members, staff, and residents alike to have a more informed conversation.

DNV | JANUARY 2016

> INTRODUCTION The reunification of North Vancouver is a perpetual public policy issue on the North Shore. The region’s history as formerly one municipality and colourful past attempts at reunification give the question an enduring appeal. Yet a sober and thorough examination of the policy’s benefits and drawbacks has, to date, been absent. This report attempts to begin this process by providing a comprehensive overview of the issues involved in a municipal merger in North Vancouver, informed by a review of scholarly literature. From there, it suggests a research plan that will follow through on the most important avenues of investigation. The report is organized as follows: Section 1 provides the background and context for a revisiting of reunification’s feasibility. Section 2 outlines the analytical approach used by the report to assess the issue. An analysis of the reasons for reunification is located in Section 3. Section 4 outlines the broad drawbacks and other considerations of reunification. This is followed by a summary of the draft conclusions we can draw from this preliminary analysis, as well as best practices from other jurisdictions and a suggested further research plan. Why is this exercise important? Many amalgamations around the world are rushed into by governments attempting to gain the benefits of a merger. A thorough evaluation of the issue before implementation allows for the identification of key goals and desired outcomes, as well as understandings of potential pitfalls and how to mitigate them. Detailed study will produce a plan for reunification that is grounded in fact, explicit in its expected results, mindful of difficulties, and persuasive to potential partners. In this way the plan is more likely to succeed, and, potentially, close the debate for future generations.

DNV | JANUARY 2016

1. BACKGROUND AND CONTEXT This section provides the background and contextual information that is necessary to allow comprehensive evaluation of the question of North Vancouver reunification. First, it explains how North Vancouver came to be three separate municipal entities, and traces the origins of reunification and opposition to the idea as well as past initiatives in the region. Next it lays out the legislative requirements for considering amalgamation. Section 1.4 offers the international context in which to understand amalgamation, while Section 1.5 outlines amalgamationâ&#x20AC;&#x2122;s local and regional context.

1.1 Historical Background Residents of the North Shore were citizens of the same municipality in the late nineteenth century. In 1891 at incorporation, the District of North Vancouver covered the area from Deep Cove to Horseshoe Bay, with the exception of the community of Moodyville near the mouth of Lynn Creek. In 1905 a group of forty-five ratepayers submitted a request to Council to consider the secession of a segment of the District to form a new municipality. In 1907 the City of North Vancouver was incorporated, constituting approximately 3,300 acres around Lonsdale Avenue; Moodyville later joined the new municipality. In 1912 the area west of the Capilano River seceded as well, forming the District of West Vancouver. At the time of the Cityâ&#x20AC;&#x2122;s secession, Lonsdale Avenue was the commercial hub of the north shore and the surrounding area was much more highly developed than the rest of the District. Population estimates in 1912 put the population of the City of North Vancouver at 7,000, compared to 2,500 in the District and just 600 in West Vancouver. Growth on the North Shore continued and led to the construction of the Second Narrows Bridge in 1925 and the Lions Gate Bridge in 1938. Development greatly accelerated following the Second World War, particularly in the District; by 1966, the populations of the District and City were 48,000 and 26,500, respectively. Further, the District was growing at close to twice the rate of the City. Development and settlement largely ignored the distinction between the two municipalities. The building of single-family homes first occurred in the City, but the majority of construction eventually shifted to the District due to the availability of more land. Commercial

DNV | JANUARY 2016

and business development continued to take place around Lonsdale Avenue even after the City’s secession, meaning the District had little commercial development outside a few local centres. Residents commonly lived in one municipality and worked in the other; ignorance of jurisdiction was widespread. Industrial projects similarly disregarded the City/District division and located projects where needed land was available. For a long period of time from inception onwards, the City/District divide was largely a footnote in day-to-day life on the North Shore.

1.2 Past Initiatives Interest in a merger, amalgamation, or reunification of some or all of the North Shore municipalities has been present to a greater or lesser degree in all North Shore municipalities since they separated. Many formal and informal discussions, public consultations, professional evaluations, and even referenda have taken place over time, some with the express goal of rejoining the municipalities. The most significant of these initiatives are outlined here. Discontent with the separation of the municipalities on the North Shore coalesced in the late 1950s as municipal and business leaders began discussing the issue. According to the North Vancouver Chamber of Commerce in 1963, these discussions “were prompted by an unbiased desire for greater economy in administration, broader utilization of equipment, and more integrated planning and development.” The City of North Vancouver commissioned an accounting firm in 1957 for “an investigation of the relative financial positions of the City and District.” The two Councils decided that further study was needed to assess broader administrative impacts, and struck a joint committee to call for bids. Mr. C.A.P. Murison, a former Reeve of North Cowichan, was recommended by the committee, but final negotiations failed in 1960 and no study was undertaken. In 1961 the Public Affairs Bureau of the Chamber of Commerce of North Vancouver decided to undertake its own investigation into amalgamation. The West Vancouver Board of Trade was included in a joint committee of all three North Shore municipalities. The study was completed in 18 months and drew a number of detailed conclusions, in addition to recommending the hiring of professional consultants. The City and District received the report and, having met to discuss next steps, jointly hired Ward and Associates to review the complete amalgamation of the City and District. The

DNV | JANUARY 2016

Ward study was completed in October 1966 and found that consolidation could result in significant annual cost savings. The report “was well received by the District,” and resulted in a motion calling for a referendum, but “was not well received by the City.” The City commissioned a separate study by Stevenson and Kellogg, completed in November 1966, which criticized the Ward study and disputed its findings of cost savings. In particular, it found that a merger would benefit District taxpayers and penalize City taxpayers. Subsequently “City Council decided to drop the amalgamation issue for a ten year period.” The next important development was the intervention of Provincial Government in1967, with the Minister for Municipal Affairs threatening unilateral provincial action to force amalgamation. City Council sent out a postcard ballot and, with the majority favouring another study of amalgamation, believed they were required to act. Thus two joint committees were formed between the City and the District, one of politicians and one of staff. These committees reviewed joint services, by-laws, finances, and facilities in detail. The outcome of the joint meetings was a by-law which acted as a referendum question in a plebiscite held in September 1968 in both the City and the District. Prior to the referendum both the City and District held public meetings. However, “separate amalgamation leaflets were distributed by the District and the City because an agreement on the wording could not be reached.” The City had once again commissioned Stevenson and Kellogg to prepare a report, which was distributed exclusively to City residents. This report listed the pros and cons of amalgamation but did not make a firm determination. Some City councilmembers vehemently opposed amalgamation, with the Mayor declaring that she would resign rather than govern a united municipality. The vote revealed that District residents were overwhelmingly in favour of amalgamation, while City residents were split:

DNV

CNV

Yes

8,678

2,284

970

2,283

% in Favour

90%

50%

% Turnout

48%

47%

DNV | JANUARY 2016

At the time provincial law required a 60% majority in both municipalities for the vote to be considered an approval of amalgamation, and thus the referendum failed. In the years following the vote, interest in the issue among elected officials led to several more attempts to examine the feasibility of amalgamation and gauge public opinion. None was as extensive or impactful as the initiatives of the 1960s, however. Examination of past attempts at amalgamation is relevant to the issue today for a number of reasons. First, it reveals an enduring interest in re-unifying the North Vancouvers. Many residents were and continue to be unaware of the distinction between the two municipalities, and a pervasive view remains that it was inappropriate to have split the municipality a century ago. Past initiatives also provide insight into the genesis of opposition to reunification. At the time of secession, what was to become the City was the commercial centre of the District. It seceded, ostensibly, because this characteristic rendered it sufficiently distinct from the rest of the large, mostly sparsely populated tract of land north of the Burrard Inlet (that was not yet connected by bridge to the more developed parts of the region). The Cityâ&#x20AC;&#x2122;s secession helped validate this understanding of the North Shore and allowed it to persist â&#x20AC;&#x201C; even after accelerated connectedness and development rendered formal political distinction largely unnecessary. A more salient issue in the recent past has involved fairness in taxation and finances. This notion has roots in the historical understanding of the City being distinct due to higher density and commercial development. It was undoubtedly enflamed, however, by studies such as the Stevenson and Kellogg report and by political rhetoric during referendum campaigns. Regardless of their current validity, fairness and tax differentials will likely recur as debate topics due to their prominent role in previous initiatives. Finally, the history of reunification demonstrates that the complexity of the topic allows ample room for disagreement and confusion around the issue. Throughout their histories the two North Vancouvers, as well as consultants in their hire, have disagreed on the impacts and merits of consolidation. To this day research on the subject can be taken both by those in favour and opposed as support for their respective positions.

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1.3 Legislative Context The legislative requirements for amalgamation of municipalities have changed over time. The current provision in the Community Charter reads as follows: No forced amalgamations 279 If a new municipality would include 2 or more existing municipalities, letters patent incorporating the new municipality may not be issued unless: (a) a vote has been taken in accordance with Section 8 of the Local Government Act separately in each of the existing municipalities, and (b) for each of those municipalities, more than 50% of the votes counted as valid favour the proposed incorporation

A key feature of section 279 of the Community Charter is the assurance of no forced amalgamations. This provision is in contrast to other jurisdictions in Canada and around the world that have witnessed forced municipal restructurings on the order of higher levels of government. Section 8 of the Local Government Act can be found in Appendix A and specifies how and under what circumstances a vote is to be taken in the area in question.

1.4 National and International Context 1.4.1 Local Government The issue of amalgamation is part of a broader set of questions faced by governments around the world â&#x20AC;&#x201C; where should municipal boundaries be drawn? How and by whom should local services be delivered to residents of a given area? Worldwide the answers to these questions have been diverse â&#x20AC;&#x201C; Australian municipalities are on average smaller than in the UK, but larger than in other European countries. Within countries municipal composition can vary across similarly-sized urban areas: the population of the American city of Atlanta is less than half a million, while the population of Los Angeles is 3.8 million, despite both cities being the centre of a much larger urban agglomeration. Similarly, different structures exist to coordinate delivery of services across municipalities. In the United States some cities have merged with counties to create city-

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counties in which county government is consolidated within city government. Notable examples of this are Jacksonville, Florida, and Philadelphia, Pennsylvania. Particularly large and important cities within countries often possess unique administrative forms to enable region-wide governance, such as New York City and London, UK. In Germany, Berlin and Hamburg are both cities and states. In Canada, administrative divisions for local government vary by province: for example, British Columbia has Regional Districts while neighbouring Alberta has no such system. 1.4.2 Amalgamation Consolidation or amalgamation – and de-amalgamation – of municipalities occurs around the world, though prevalence varies by country. For instance, amalgamation is not common in the United States and Switzerland due to the importance placed on local autonomy. Amalgamations can be one-off cases or great waves of reform, as in post-World War II UK and Eastern Europe in the 1970s. Further, municipalities have amalgamated in different ways for different reasons. Some are resident-driven through a referendum or similar vote; others are mandated from a higher order of government. Common reasons for amalgamation are as follows, with many overlapping and non-exclusive: •

desire to reform and modernize local governance

•

pursuit of cost savings and economies of scale

•

pursuit of greater simplicity and coordinated governance

•

ideologically-driven belief in “less government”

•

desire for greater coordination of growth and transportation planning

•

desire for greater integration of large-scale services

•

local government financial duress during economic downturns

Recent national and international examples of amalgamation are Eastern Canada’s amalgamations in the 1990s and the Australian state of Queensland’s in 2007. These largescale initiatives were driven by the desire of the provincial or state government to reduce the number of municipalities, and both were mandated by government statute largely against public will.

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1.5 Regional Context 1.5.1 Local Government in BC The District and City of North Vancouver are two of the 162 municipalities in British Columbia. At respective populations of 85,000 and 50,000, they are the 12th and 20th largest municipalities in the province. They are mid-sized in relation to the 19 other municipalities in greater Vancouver; if combined, they would constitute the fifth-largest city in the region. British Columbia maintains a two-tier municipal government system, with incorporated municipalities also members of Regional Districts. The role of Regional Districts varies by region, as they may service municipalities, unincorporated communities, or rural areas. Both the District and City are members of Metro Vancouver (formerly the Greater Vancouver Regional District). Since the region is composed almost entirely of large, sophisticated municipalities, Metro Vancouver’s primary services are those which are best suited to regional cooperation. These include air quality, environmental regulation and enforcement, water, liquid and solid waste, and regional planning. 1.5.2 Amalgamation in BC In BC, municipal amalgamations are rare. As noted, the Community Charter prohibits a forced amalgamation of municipalities without the consent of their citizens, meaning there have been no provincially-mandated reforms like those other Canadian provinces experienced. The Local Government Department of the Ministry of Community, Sport, and Cultural Development noted in 2000 that “the relatively low rate of amalgamation can be explained by the following factors: •

the presence of a flexible regional district system allows municipalities to achieve the advantages of amalgamation, for example economies of scale, by creating regional district service areas or purchasing services from regional districts;

•

the Ministry of Municipal Affairs’ grant programs, especially the Small Community Protection component of the basic grant under the Local Government Grants Act, provides a basic level of provincial financial support for small communities. This level of support has been a long-established feature of provincial policy;

•

the existing police cost formula discourages small municipalities from amalgamating with their neighbours. Communities under 5,000 in population do not pay for the cost of

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policing while those above pay between 70 and 90 percent of the cost, depending on their size.” The most recent municipal amalgamation in BC occurred in 1995 when the Districts of Matsqui and Abbotsford merged. The municipalities were distinct political entities but both were involved in the administration of regional issues such as transportation, planning, and largescale projects. The two cities also had arrangements for the joint funding or provision of several services, including fire protection and a recreation commission. Considerable growth in the late 1980s and early 1990s fueled concerns about the ability of the two entities to jointly manage large issues facing the region, and consolidation was seen as a potential solution. Amalgamation was also driven in part by a desire to resolve issues with these shared services, including funding disagreements, governance issues, and anticipated increases in cost. Two referenda were held on the question to amalgamate. The 1990 referendum failed, with the “yes” vote representing 86% of citizens in Matsqui and 45% in Abbotsford. A 1993 referendum was successful, however, with corresponding “yes” votes of 77% and 58%. The eventual success of the initiative was attributed to a number of factors, including a history of municipal collaboration indicated by the numerous shared services agreements. The City Manager of Abbotsford also noted at the time that “since discussions on amalgamation had been taking place for roughly two decades, the public was well informed and generally supportive of the restructuring.” North Vancouver’s situation shares numerous similarities with that of Matsqui and Abbotsford in the 1990s. The two cities in North Vancouver share a geographic area and represent smaller regional municipalities, although the North Vancouvers have a larger population than the Fraser valley Districts did. There is a long history of municipal cooperation, as well as the resultant benefits and drawbacks of shared services. This cooperation has also taken place within the context of British Columbia’s Regional District system. Further, in both regions amalgamation has been an issue of relevance for residents; it is not an initiative imposed by a higher level of government. A deeper understanding of Abbotsford’s experience is a necessary first step for considering amalgamation in North Vancouver.

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2. UNDERSTANDING AMALGAMATION IN NORTH VANCOUVER Amalgamation is a perennial issue on the North Shore in part because a definitive answer does not exist – as Section 1 indicated,

there are many ways to organize local

government in any given geographic area. The question of amalgamation is also extremely complex since it has the potential to impact every facet of the municipalities’ current structures and operations. Service delivery, taxation, government finances, administrative structure, and many other features of the North Shore’s local government may change with an amalgamation. What is the best way to sort through this complexity and attempt a sober evaluation of the benefits, drawbacks, and impacts of a consolidated North Vancouver? Perhaps the best way to begin is to ask a simple question – why merge the City and District of North Vancouver? The answer to this question depends on who is asked; a resident might point to greater simplicity, a politician may highlight a reduction of superfluous government, while a city planner would praise the possibility of a unitary vision for the North Shore. In fact, amalgamation is a solution to many problems, from small to very big, that exist simply because this section of the North Shore is governed by two municipalities. Whether and how amalgamation would solve these problems is crucial to deciding whether to consolidate or not. In some cases, the conclusions are obvious: it is certain that total amalgamation would reduce the number of mayors, councilmembers, and senior staff. In other cases, finding answers might require months of detailed study: would amalgamation result in a lower combined operating budget? Section 3.1 provides the primary arguments that have been put forward in support of reunification on the North Shore. Then, with help from a review of literature on consolidation and District interviews, Section 3.2 aims to provide a preliminary analysis of which benefits are likely to materialize from a merger with the City of North Vancouver. The second portion of analysis, Section 4, identifies and evaluates drawbacks and other considerations around reunification. These include concerns about equity and fairness, transition and one-time costs, and maintenance of service levels. The section also touches on questions of local “distinctness,” community, and culture that recur in the reunification debate. Identifying the likely benefits and drawbacks of reunification in this way allows for a clearer picture

the

tradeoffs

involved,

and

informs

further

study

and

decisionmaking.

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3. WHY REUNIFY? 3.1 Reasons for Reunification The District of North Vancouver is in a somewhat unique position since amalgamation is not being forced by a higher level of government, or driven by dire economic circumstances; the issue is instead being championed by residents and leaders in the community. It is nonetheless important to be explicit about why reunification is on the agenda and what benefits are anticipated to follow. Doing so in the early stages of debating the issue helps to find common ground and build consensus while allowing for strategic planning of the amalgamation process. Proponents of municipal consolidations around the world, as well as some commentators on the North Shore, commonly advance similar arguments in favour of amalgamation. These can be grouped into three main categories:

I I

Culture Key reason: the North Shore “should” be reunified, and there is no good reason to be separate.

Finances Key reason: amalgamation would result in increased cost efficiency for services, including economies of scale, and reduced duplication and administration.

Local Government Services and Functions Key reason: amalgamation would result in North Vancouver’s local government being able to function more effectively and provide better services to residents in the region. The first two categories are most often heard in the debate to reunify the North Vancouvers. First, culture: since the two municipalities were once one, many hold to the notion that they will reunite. A related sentiment is that there is no longer a compelling reason for the municipalities to be distinct; the City is geographically small and entirely surrounded by the District. Politically, there similarly seems to be no compelling reason for two mayors and twelve councillors to represent the citizens of the area. This paper does not provide any further analysis into this issue, though it is revisited in the “Next Steps” section.

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The economic perspective is also frequently voiced. Having two municipalities can be considered wasteful and an unnecessary duplication in many areas. Further, economies of scale may be achieved when municipalities are combined. These claims are unpacked and examined in Section 3.2.1, with insights from other jurisdictions that have consolidated. Last, amalgamation may result in benefits to the many services and functions that local governments provide. For instance, two smaller communities may not have had the requisite capacity to build a sewage treatment plant, which was undertaken after consolidation. Another example could be the elimination of conflicting zoning requirements allowing for smoother development. Section 3.3.2 attempts to examine the District of North Vancouverâ&#x20AC;&#x2122;s key functions and services to identify areas where amalgamation could improve residentsâ&#x20AC;&#x2122; experience.

3.2. Evaluating Reunification In trying to understand whether reunification will result in the benefits that are anticipated, it is worth noting that learning from other cities that have amalgamated is difficult. In the word of one scholar: The success of consolidation in achieving greater efficiency and effectiveness in governance and service delivery will depend on the distinct history and geography, as well as the economic and political circumstances of the region that is considering restructuring. For some municipalities, consolidation will be more appropriate than for others â&#x20AC;&#x201C; given their history of intermunicipal cooperation, financial arrangements, collective agreements, political structure, spatial organization, and political will to amalgamate.

Hence while the following sections draw on the experiences of other jurisdictions, their applicability is often limited since unique circumstances can have a significant impact on how consolidation impacts any given municipality.

3.2.1 Cost Efficiency Rationale Around the world, amalgamation of municipal units is often driven by a desire for greater efficiency in local government. From Nova Scotia and Ontario to the United States and Australia, calls recur from within municipalities or higher levels of government for less bureaucracy and more efficient spending. The quotes below are taken from consolidation initiatives in Eastern Canada in the 1990s:

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•

[with consolidation] “…provision of services on a broader basis does allow for the economies noted above. Moreover, it allows for cost containment which may be very important in the future.” – New Brunswick

•

[with consolidation] “the inefficiencies in multiple bodies with overlapping tasks are avoided. It is more economical than the combined units it replaces.” – Nova Scotia

•

“taxpayers deserve a restructuring of these cumbersome bureaucracies.” – Ontario

A few key themes are usually invoked in calls for amalgamation on grounds of greater efficiency. The first is a search for economies of scale in the provision of services: the idea that average costs for a service will be lower in a larger municipality because more of that service is being delivered. A second is the notion that “bureaucracy” is reduced when municipalities are merged. Since there are fewer decisionmakers in a given region, any differences in how services are delivered will be eliminated, meaning less administration and cost. The third common theme is the elimination of duplication – either in services or administration, amalgamation would correct the tendency of multiple governments to overlap. Analysis Since cost efficiency is a common justification for municipal amalgamations, many scholars have attempted to determine whether these benefits exist. To summarize the literature to date, evidence that suggests consolidated municipalities operate more efficiently is “tenuous at best.” It is accepted that “studies on municipal amalgamation have never presented conclusive proof that municipal efficiency improves when the organizations changes from a fragmented to a consolidated political structure.” 1 None of the major municipal consolidations in Canada over the past twenty-five years has resulted in discernible cost savings, while instead resulting in cost increases (particularly when accounting for transition costs). Most scholars agree that while it is possible for consolidations to result in overall cost savings, a number of factors make this unlikely.

A confounding factor that studies have attempted to control for is differences in services levels; if two municipalities that have differing service levels merge and change those levels, has cost efficiency increased or decreased? Decisions on service levels need to be an explicit component of an amalgamation initiative.

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First, economies of scale do not apply to all services provided by local government. Rather, they apply mostly to capital-heavy services such as sewerage and water treatment/provision. Many big-ticket services provided by government are labour-intensive, such as policing and fire, and thus do not benefit from economies of scale since unit costs are constant. Some of these services display diseconomies of scale, meaning average costs rise when more of the service is provided. Studies attempting to determine economies of scale in local government have found different cost curves for each service. Some services, such as solid waste disposal, see operating costs at low levels for small municipalities (5000 people), then increases for cities as large as 325,000 people, after which point they decrease again. Thus it is difficult to conclude that savings will result from amalgamation on the basis of economies of scale alone. Some efficiencies can be achieved in the reduction of duplication and the streamlining of administration. The Abbotsford-Matsqui merger is one example of a city that saw lower administrative costs post-merger. In most instances, though, these savings are not assured. Usually mergers result in higher wages for most employee groups since there is a tendency to harmonize different wages levels upwards rather than downwards. Moreover, amalgamations tend to result in harmonization of service levels upwards as well. This is particularly true of large-scale amalgamations of denser cities taking in more sprawling suburbs. Further factors that make cost savings an unlikely result of a municipal merger involve incentives in service provision. Local governments can be viewed as arrangers of services, rather than providers. The fact that different services are most efficiently delivered at different population levels, as noted above, â&#x20AC;&#x153;makes it impossible for any one organization to be an efficient producer of all local government services.â&#x20AC;? Professor Robert Bish notes: Adaptation to the diverse production characteristics of local government services has resulted in production systems consisting of organizations of many different sizes, especially in urban areas, and exhibiting much more complexity than the organization of local governments themselves. In so adapting, local governments have learned to contract out or enter into joint agreements for the production of many activities.

Smaller municipalities, rather than providing services inefficiently, may in fact benefit from the ability to be nimble and contract out services to other specialized or larger producers. The opposite may be true of larger municipalities, which suffer from bureaucratic congestion as they take on the delivery of more services internally than is efficient to do.

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Application to DNV It is impossible to make a firm determination of whether a combined North Vancouver would see cost efficiencies post-merger. Some broad conclusions can be drawn, however. First, the City and District are part of BC’s local government system, which includes Regional Districts. This system of government is widely admired for the flexibility Regional Districts have to provide the services that residents most need in their respective areas. For the North Shore, this means that many of the services that would benefit from greater coordination or exhibit economies of scale are already being provided by another governmental form. Solid waste disposal is provided by Metro Vancouver, as is liquid waste treatment. Metro Vancouver is responsible for the region’s reservoirs and water treatment. Less important needs that nonetheless benefit from centralized provision, such as labour relations, are contracted out. Amalgamation would have almost no effect on how much these services cost North Shore residents. Services that extend beyond the District’s borders but affect the North Shore are generally shared with the City already, meaning significant cost efficiencies in the delivery of those services are unlikely as well. Areas such as policing and recreation and culture have some degree of coordination, and so financial benefits of combined provision would already be evident. In areas such as fire and policing (some 30% of current municipal budgets in the City and District), experience elsewhere suggests costs would almost certainly rise due to diseconomies of scale and upward harmonization of wages. The typification of local governments as “arrangers of services” certainly seems appropriate in the case of North Vancouver District. A consolidation would likely result in some administrative and operational cost efficiencies, however. The combined entity would employ fewer back-office staff, and may be able to realize efficiencies in facilities and inventories of certain goods. Moreover, all resources currently invested in issues arising from inter-municipal cooperation and arrangements could be used elsewhere (for example, discussions around cost sharing arrangements in shared services). On the whole, though, the many studies into the issue find almost no instance of dramatic savings from an amalgamation. This is in part due to a final and sometimes underestimated pressure on costs: the cost of transition itself. From a purely financial

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perspective, the usually significant capital costs associated with amalgamation are generally financed by debt since there is often an aversion to increase taxes for this expenditure. This not only adds to the debt load of the municipality but increases its debt servicing costs (Section 4.4 deals with transition costs more rigorously). In summary, when transition costs are included, realizing cost efficiencies from a municipal amalgamation is almost impossible, and particularly so for a local government with DNVâ&#x20AC;&#x2122;s characteristics. Preliminary evidence suggests that currently the City and District succeed in efficiently delivering services, with little overlap of consequence and few economies of scale to be gained from a merger.

3.2.2 Functions and Services Amalgamation is an initiative that may impact, in theory, every aspect of a local government. Some of these impacts may be positive and worth pursuing through the process of amalgamation. Local governments provide a large array of services and functions which vary in many ways. Some services are hyper-local, such as the decision to build a playground in a park or approve the construction of a laneway house. Others are regional or crossboundary, such as roads and protection of rivers. Others still may be either local or regionally-planned: municipalities can operate their own cemeteries or share them. This also extends to bigger issues: climate change adaptation and mitigation is one area that may require local action, but regional cooperation. An exhaustive analysis would assess every facet of local government, from dog licensing to water main construction, to determine the impact of amalgamation. An appropriate shortcut, however, is to examine those issues that affect North Vancouver or the North Shore as a whole and on which we currently cooperate â&#x20AC;&#x201C; or not â&#x20AC;&#x201C; with the City. Is there an incentive to amalgamate from the perspective of these regional (North Shore) services? Are services for citizens suffering because we are separate? And in what ways would these services improve or deteriorate if we merged? This section investigates three areas: our current shared services with the City, the notion of strategic capacity, and planning and transportation. 2

This study did not examine many of the services that the District provides; others that may factor in the analysis include social planning, fire and policing, animal welfare, emergency management, and the school district.

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Shared Services The District shares or cooperates on many services with the City. Some of these arrangements are largely financial, such as policing on the North Shore, while others are actively managed bilaterally (such as Recreation and Culture). Would any of these services benefit from a merger with the City? 3 A few broad statements can be made on the issue of shared services. First, as long as there are two (or three) distinct political entities involved, there will be some inevitable disagreement and inefficiency. Negotiating and communicating around shared services, as well as sharing decisionmaking responsibilities, necessarily involves staff time and effort. Further, as with any political issue, there is always potential for distrust, obfuscation, and fingerpointing, with certain shared services exhibiting these qualities to a greater degree than others. After a period of transition to a single operational unit through reunification, all of these issues would no longer be present. Second, it can generally be said the level of quality of these services is high. The fact that the services are jointly funded does not result in obvious reductions in service quality. For example, even though RCMP is a jointly funded service, the quality of policing on the North Shore is high. Does this mean that the services currently under “shared services” would not improve if the North Vancouvers reunified? Not necessarily: a high quality of service does not preclude the possibility of improvement. The North Vancouver Recreation and Culture Commission is a prominent shared service between the City and District that demonstrates this characteristic. The function is wellestablished as an area of joint jurisdiction since it was initiated over 40 years ago. Because staff report to a separate and unique joint body of political and citizen representatives, the Commission must operate externally from other municipal departments. This separation (caused by the nature of the service as “shared” and cross-jurisdictional) results in both benefits and drawbacks. Being external to other departments leads to an autonomy that allows for greater freedom to make operational decisions that are best for the Commission, for instance. Being external also isolates the Commission from other departments with which it may need to cooperate, however. Parks and Social Planning are two areas that are intimately connected to

3 As with most of the content in this report, this analysis is extremely preliminary and does not fully investigate any shared service. The insights here were mostly determined via conversations with senior staff and other jurisdictions’ experiences.

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Recreation and Culture in their goals and objectives, yet the Commission is not able to systematically engage with either function as easily since it is a separate entity. Does this lead to a decline in the level of service provided by parks, social planning, or recreation and culture? Likely not, though opportunities for cooperation and synergy will be missed. It is possible to maintain high levels of service within an operational structure that leads to missed opportunities for North Vancouver citizens, a fact that is sometimes lost in debate on the topic of reunification. Strategic Capacity Around the world the debate around municipal consolidation is far from settled and many alleged benefits and drawbacks are contested. One benefit recurs in cities that have amalgamated, however: enhanced strategic capacity. In short, this is the ability that consolidated municipalities have to act in ways neither could as a separate smaller entity. This enhanced capacity may manifest in individual services as economies of scope â&#x20AC;&#x201C; the building of a large waste facility that was hitherto impossible, for instance â&#x20AC;&#x201C; or as a stronger collective voice in regional affairs. The amalgamation of the City of Toronto had many welldocumented drawbacks, but one of the primary benefits after the dust settled was the increased political clout that the merger gave the residents of the city relative to actors such as the province of Ontario. In North Vancouver, a united political entity would see benefits in a number of ways. First, having one voice instead of two would eliminate the possibility of disagreement from official representatives on the North Shore on issues of regional concern. In whatever forum these issues are discussed, be it Translink, Metro Vancouver, the provincial government, or the Union of BC Municipalities, the residents of North Vancouver would speak with one official voice. Second, the resulting municipalityâ&#x20AC;&#x2122;s size would give it greater leverage in regional affairs. By population it would be the fifth-largest municipality in Greater Vancouver, with a larger budget and larger individual financial contributions to organizations such as Metro Vancouver. A unified North Shore would have more clout in discussions of distribution of resources, such as transportation. It may also be able to negotiate better outcomes from other groups as well such as organized labour and outside contractors. Since a major function of local government is the representation of its citizens and their interests in larger forums, enhanced strategic capacity in this regard should not be overlooked when evaluating amalgamation.

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Planning and Transportation Planning and transportation is perhaps the single most important function of regional significance within the basket of local government roles. The issue is so complex, in fact, that every level of government is involved: the federal government through funding, certain nationwide transportation projects (railways, pipelines), and as a landowner (CMHC’s ownership of Granville Island, for instance). The provincial government plays a large role in the region’s highways and bridges. Metro Vancouver takes on the role of regional planning and is responsible for the regional growth strategy; Translink is implicated in many important transportation issues in Greater Vancouver. Finally, municipalities are the primary agent for questions of local planning and transportation, while liaising with every other actor in the process. How coordinated are decisions regarding planning and transportation in North Vancouver? Currently, the District of North Vancouver is required to demonstrate how our Official Community Plan acts in accordance with Metro Vancouver’s regional growth strategy, as is the City of North Vancouver. Further, there are channels of discussion between the City and District on major initiatives and on issues concerning shared borders and bordering areas. These areas are largely the extent of coordination, however. The OCPs are developed independently, informed by each council and municipality’s separate goals, incentives, ideologies, and influences. What effect does this have on community and economic development and transportation patterns in North Vancouver? First, it is important to note that the DNV and CNV are very different cities. They differ in size and shape and in the amount and type of residential, commercial, and industrial property. And, simply put, a planning department will act differently when considering a city with the characteristics of the DNV compared to a city comprising all of North Vancouver. For the District, our strategy of developing regional town centres as dense hubs makes sense given the makeup of the municipality, as well as economic and other incentives. Does it make sense for North Vancouver as a whole to densify and diversify these areas? That question is open to debate, although it is not a stretch to suggest the development plan would be different. This issue is similar to that of shared services; different development patterns do not necessarily mean that the “quality” of the planning function is low. The District and City employ capable staff that pursue development of opportunities for a high quality of life, work, and play

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for their citizens. Separate development incentives will result, however, in missed opportunities. A unified North Vancouver, for instance, may have a comprehensive cross-municipal transportation network along the waterfront; in the current situation this would require a degree of cooperation and coordination that is not realistic, or at the very least unlikely. Having distinct political entities also results in a default setting of inaction on joint issues. On the question of Keith Road bicycle lanes, staff agreed on a proposal but municipal councils did not. Whether these bike lanes would have improved life on the North Shore is immaterial; what is significant is that in the event of a disagreement on issues of joint concern in planning and transportation, inaction predominates. Planning and transportation is an area of great importance to the citizens of North Vancouver. Although there is nothing wrong with the District and Cityâ&#x20AC;&#x2122;s current strategies from their respective points of view, the political divide between the two may cost citizens in the form of missed opportunities for regional strategic planning. This is one of the key benefits of amalgamation and warrants much further investigation.

3.2.3 Conclusion The preliminary analysis suggests several key conclusions. First, the economic rationale for merging municipalities is in general over-emphasized, and in the case of the District of North Vancouver there may not be any economic gains to be realized at all. Second, there do not appear to be many obvious imperatives for reunification from a service perspective. City and District staff work effectively to provide a high quality of service to residents in North Vancouver, even in areas of shared jurisdiction. Last, there are areas where services could be more effective if the North Vancouvers reunified, particularly in planning and transportation, and there would also be improvements in the strategic capacity of local government on the North Shore. In this way reunification is the dog that didnâ&#x20AC;&#x2122;t bark: since service quality is not suffering, there does not appear to be an imperative to merge. Yet what is not taken into account is the cost of missed opportunities and the possibility for improvement in outcomes for North Vancouver residents. The realization of these missed opportunities ranks as one of the strongest rationales for a reunification of the District and City.

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4. DRAWBACKS AND CONSIDERATIONS In addition to its potential benefits, reunification faces significant obstacles and may have considerable negative consequences. This section introduces some of the major issues around reunification in North Vancouver that would require attention if residents and politicians were to consider amalgamating. Other jurisdictions that have amalgamated have faced similar issues, although North Vancouver has several unique characteristics that require special focus. The Blue Ribbon Committee that reported to council in the fall of 2014 identified many of these issues as well as barriers to accurate assessments. Using the Blue Ribbon report and information from other jurisdictions, this section has broken down the issue into four major topics (service delivery, appropriateness, equity and fairness, and transition costs and complexity) and offers a summary of the issues and a preliminary analysis.

4.1 Service Delivery Section 3.2.2 investigated whether amalgamation would positively impact the delivery of services; it is also important to assess which services may suffer from an amalgamation. This issue is particularly important when considering the impact a reunification would have on residents â&#x20AC;&#x201C; would the level of my services decrease? What would happen to the service level in North Vancouver is difficult to predict. However, other municipalities have conducted surveys post-amalgamation to assess whether residents had perceived changes in the level of their services. The conclusion of a study on the issue states: The title for Shakespeareâ&#x20AC;&#x2122;s play, Much Ado about Nothing, best describes the amalgamations. This finding is similar to that by Wim Derksen in his study of several European jurisdictions. In all three cases analysed in this article, there was a great outpouring of both positive and negative rhetoric in the lead-up to amalgamation. The provincial government and others who supported amalgamations promised significant cost-savings and efficiency improvements, whereas opponents predicted chaos and great citizen dissatisfaction resulting from the loss of the smaller units of local government. However, judged by citizensâ&#x20AC;&#x2122; perceptions of the quality of service, not much happened. There were clearly pockets of dissatisfaction, but most residents did not see a significant change in the quality of services.

Many of the cities examined in this study were small- to medium-sized; roughly the same size as the City and District. Although service changes may be more pronounced in larger cities (such as following the Montreal and Toronto amalgamations), it appears that citizens in general do not experience large fluctuations in service pre- and post-merger. Nonetheless since this DNV | JANUARY 2016

particular consideration is so important to residents, further work on a reunification should focus on addressing it comprehensively.

4.2 Appropriateness Appropriateness often features in the debate around reunification in North Vancouver, as well as other municipal consolidations around the world. The notion has several components. The first is political or cultural appropriateness. Would a cultural distinctness be at risk by merging the municipalities? One extreme example of this is a hypothetical merger of the three North Shore municipalities and two North Shore First Nations – this would be obviously inappropriate since the First Nations have a recognized right to be distinct based on culture and history. But the question is more subtle with the District and City: is there something unique about District residents or City residents that would be lost as political representation merged? A second, related concept is local government voice. In our democratic system, part of the role of local politicians is to represent their electorate. In general, the smaller the local government, the stronger this representation can be, since there is less diversity in issues. One of the major failures of amalgamations in both the Toronto city amalgamation and the Australian experience was the loss of community voice and representation in formal political structures. As a local government grows larger, it risks not only losing the ability to represent the smaller communities within its borders, but even the legitimacy to represent any of the communities at all. This drawback needs to be carefully weighed in debates around reunification in North Vancouver. Finally, municipal growth via amalgamation risks undermining some of the political functions of local government. The larger a city is, the less available are its politicians to residents. Direct accountability through accessibility is an important feature in local government as politicians can be held to account or otherwise responsive to the needs of citizens through public council meetings, one-on-one availability, and other avenues of engagement. Some evidence suggests that as governments grow they become less responsive to citizens and more prone to capture by special interest groups. These “public choice” theory concerns are not immaterial since, again, a primary characteristic of local government is its ability to respond to citizens and their concerns, and this role may be diminished by a reunification. In amalgamations around the world, appropriateness emerges as an important consideration – yet it is different in every individual circumstance. These “local circumstances”

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also play a large role in determining whether a restructuring will be successful. To ensure that reunification is the best choice for North Vancouver, it is necessary to accurately assess these factors. This assessment includes North Vancouver’s unique history, its level of political engagement and links to the community, and gauging the public’s major concerns on the issue.

4.3 Equity and Fairness Perhaps the most political issue of any municipal consolidation is equity, which emerges as a key theme in amalgamations around the world. In North Vancouver, this issue in particular has played a prominent role in previous attempts to amalgamate. Three of the most salient equity issues in previous initiatives were taxation, fiscal position, and service levels, and all three are interrelated. Propositions that the City has lower property taxes, a large reserve of funds (in contrast to District debt), and is distinct from the sprawling, high-cost District were persuasive in political dialogue. Whether or not these positions are still true is less important than the fact that they are likely to still be persuasive in future discussions on reunification. In any future initiative, these equity-based notions need to be addressed from the beginning of the process, since they can effectively stall progress on the issue. Aside from political impacts, equity is an important consideration in its own right. Amalgamation may change the level of service for some municipal functions. Whether these changes will positively or negatively impact residents in a certain geographic location or in a certain income bracket are necessary pieces of information. One benefit that emerged from the Toronto amalgamation was a positive impact on equity as service levels for some functions (such as public transportation) increased in low-income neighbourhoods. Since the North Vancouver amalgamation would be smaller and integrate fewer diverse neighbourhoods, these impacts are not likely to be as dramatic as Toronto’s experience. However, some thought should be given to who may or may not benefit from a merger, and whether these impacts are desirable or should be mitigated. An important note here is the difficulty of accurately assessing to what degree claims of unfairness are legitimate. Definitively closing the book on these issues may never be possible in the best case, due to the attendant uncertainty of a policy change like an amalgamation. The accuracy of any assessment will be further compromised, however, by the City of North Vancouver’s likely reticence to provide the necessary financial, tax, and service data. If the

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District chooses to devote significant resources to a financial investigation, it should do so with the recognition that the accuracy of results is unlikely to be high.

4.4 Transition Costs and Complexity The complexity of merging two cities and the financial cost of doing so are two crucial considerations in an amalgamation analysis. On this score the Blue Ribbon Committee provided advanced insight. The compatibility of the two cities is a primary determinant of the difficulty of consolidating them. This compatibility needs to be evaluated in many areas, some of which are: ideological approaches to financial matters and governance (for instance, user fees v. subsidies, desired service levels, etc.); infrastructure and equipment; operational technologies (for instance, software and communications technology); accounting and asset management; staff culture and expectations; and operational and administrative structure (management positions, hierarchical lines of communication and accountability). In addition, agreements with outside agencies and collective bargaining agreements would have to be re-scoped or renegotiated. These hurdles in implementing a merger of the cities manifest as cost in time, money, and, potentially, service levels. Many cities that consolidated at the behest of higher levels of government have had strict timelines for merging, which generally result in worse outcomes. Poorly thought-out email harmonization in the Halifax Regional Municipality disrupted operational effectiveness there for a prolonged period of time post-merger. The Fraser Institute found that smaller cities that were forced to merge in the Ontario amalgamations didnâ&#x20AC;&#x2122;t have the time or ability to deploy proper resources to renegotiating collective agreements, resulting in much higher personnel costs post-consolidation as opportunistic unions exploited the hurried transition. Another finding is that governments around the world consistently underestimate the financial and time costs of merging cities. In order to clear the hurdles described above, municipalities incur a number of different expenses; ranging from engaging consultants and professional services to acquiring real estate. An early analysis of the Halifax amalgamation found that the largest costs were â&#x20AC;&#x153;attributed to severance and early retirement packages, renting temporary office space, and the development of a new financial system.â&#x20AC;? Eight months into the project, the merger had one-time costs of $25 million, up from the pre-merger estimate

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of $10 million total. As previously mentioned, one-time costs generally are not paid for by increased taxes but rather result in debt being incurred by the municipality. Hence the large transition costs not only impact the financial viability of a merger at the time of consolidation but have lasting effects in the form of debt repayment costs. In summary, transition complexity and cost are often overlooked in the rush to realize the benefits of amalgamation. Time and again, mergers prove more costly than anticipated, which can dramatically impact the overall financial incentives to consolidate. Further, the operational hurdles of merging cities need to be carefully thought out to avoid reductions in service levels and operational functioning.

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> DRAFT CONCLUSIONS The preliminary analysis of reunification in North Vancouver highlighted some of the major benefits and drawbacks of merging the District and City. Below are some of the key takeaways from this process to inform further action on the issue. General Conclusions: •

There is no right answer to question of city size for cultural concerns, efficient delivery of services, or political representation, although there is some evidence that smaller local governments are more nimble in delivering service arrangements, less bureaucratic, more responsive to local needs, and overall more effective.

•

Amalgamations are often rushed into by higher levels of government in pursuit of economic benefits; the most effective mergers are those that are well thought-out, planned, and implemented, with frequent resident consultation throughout the process.

•

Success of amalgamations largely depends on individual cases and unique characteristics of the cities involved.

•

Amalgamations are most successful if they address local issues as identified by citizens and thereby obtain buy-in from a majority of residents.

DNV-Specific Conclusions: •

A primary finding is the importance of tempering expectations for financial efficiencies resulting from a merger with the City. Although a detailed analysis must be done to support these findings, the experience of cities around the world indicates that efficiency gains should not be a primary reason to consolidate.

•

The primary imperative to merge with the City from a service perspective is to begin realizing opportunities that are being missed because the two North Vancouvers are separate. Though the quality of services is high, consolidation would improve the effectiveness of the government in a number of areas, foremost among them being planning and transportation.

•

Some of the major drawbacks of reunifying include implementation complexity and cost, equity considerations, and potential weakening of democratic functioning. Many of the drawbacks around the issue have been magnified during public debate in previous initiatives, and addressing them is crucial to gaining buy-in from residents.

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â&#x20AC;˘

Some of the main drivers of cost when merging cities are operational, and these may be mitigated by consulting professionals who have experienced municipal amalgamations in the past.

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> BEST PRACTICES Since any degree of municipal restructuring, especially a full merger of two cities, is a difficult and extensive process, it is important to develop and adhere to guidelines for decisionmaking, consultation, and communication. These guidelines for politicians and senior staff ensure that the process of amalgamation, from inception to post-merger evaluation, is conducted thoroughly and properly. Adherence to these principles minimizes the myriad risks inherent in a policy as politically and operationally difficult as municipal amalgamation. An evaluation of amalgamations in Australia identified several such guidelines for governance during periods of municipal re-evaluation: •

The development of a clear and robust rationale for the consolidation process;

•

Meaningful consultations with all affected parties at the start and during the process of change, plus trust and “good faith” in negotiations;

•

Commitment and effective leadership at both political and chief executive levels with, in the case of amalgamation, transitional arrangements for leadership agreed at the outset;

•

Negotiating the form of governance of the new arrangements, noting that these are best treated as a fresh start, rather than a “take-over” by one party;

•

In the case of shared services, ensuring the cooperative arrangements or newly created entities are designed to engender continuing commitment (political and managerial) and provide necessary specialist expertise;

•

Recognizing that change has costs and that securing staff buy-in is critical to success;

•

A realistic timetable for implementation;

•

An objective, independent, and ongoing evaluation program

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> RECOMMENDED NEXT STEPS This report has put the question of North Vancouver reunification in context and sketched the main conclusions that can be drawn from the literature. This information should be used to inform the next, more thorough round of investigation into the issue in North Vancouver. This report recommends that a research plan be developed and implemented over the next two years. A comprehensive research plan serves to test the validity of assertions made in this report as well as fill in knowledge gaps. At the conclusion of this plan District council and staff will be well-equipped to engage outside partners, better interact with residents on the issue, and begin steps towards implementation of a reunification initiative. The installments of the research plan follow from the draft conclusions of this report, and represent the major findings from this preliminary analysis. They include draft timelines as well as specific sub-goals, key personnel to engage, and resources needed for a comprehensive evaluation into each area of inquiry.

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PROPOSED REUNIFICATION RESEARCH PLAN: 2016-2018 STEP 1 // Spring 2016

ABBOTSFORD-MATSQUI CASE STUDY Rationale: Any reunification initiative on the North Shore must have a solid research foundation, and a study of the Abbotsford-Matsqui merger should be the starting point for this foundation. The study will inform expectations of the reunification process and results, while flagging barriers and success factors. The study’s results will help guide DNV’s next steps in exploration of reunification. Summary: The Abbotsford amalgamation is the most relevant municipal amalgamation to inform the North Vancouver reunification initiative. It took place in the same province and under the same local government / regional district system as North Vancouver operates. The two cities had close formal and informal ties, and coordinated a number of services – similar to the District and City of North Vancouver. Goals: •

Evaluation of benefits and drawbacks of amalgamation

•

Identification of: o

key reasons for success of referendum / political willingness to amalgamate

administrative difficulties of the merger and best practices through the process

key operational steps towards reunification

Key Resources: •

Interviews with councilmembers, senior staff, consultants, and volunteers engaged with the initiative

•

Scholarly research / formal evaluations of the merger

Potential Barriers: •

Time gap may limit applicability to DNV

•

Few remaining senior staff/councillors available for interview

•

Dearth of data and/or formal evaluation materials

DNV | JANUARY 2016

STEP 2 // Summer-Fall 2016

SERVICES EVALUATION Rationale: The full report’s preliminary research resulted in two key findings: that the areas of planning and transportation could potentially benefit from a municipal amalgamation since they exhibit “missed opportunities,” and that in most other service areas there is no pressing imperative to merge. A more fulsome continuation of this research is needed to confirm these findings and help guide priorities through the reunification process. Summary: An exhaustive examination of every DNV service to look for benefits from amalgamation would be impractically large and costly. An investigation of planning and transportation and some shared services is realistic, however. This investigation may be able to utilize and/or update previous research, such as in shared services. Goals: •

Further investigation into individual shared services’ ability to deliver on their mandates

•

Identification of missing organizational linkages (ie., Parks and Recreation)

•

Examination of overlaps, gaps, inconsistencies, and missed opportunities in North Vancouver planning and transportation policy

Key Resources: •

CAO

•

GM, Corporate Services

•

Shared services department heads

•

GM, Planning

•

Planning staff

Potential Barriers: •

Difficult to accurately determine how successful shared services are (lack of metrics)

•

This step may be hindered without access to City of North Vancouver information

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STEP 3 // 2017

FINANCIAL METRICS INVESTIGATION Rationale: The full report found financial considerations to be a critical component of the reunification debate, particularly from a political and resident viewpoint. This research initiative would aim to provide clear-headed analysis on financials to allow for meaningful engagement with residents and outside partners to begin. Summary: The two areas that recur as political obstacles to reunification are taxation impacts and debt levels. As such, the study should focus on these two areas to help reset the debate. Further, the District has the opportunity to broaden the conversation about the financial health of local governments beyond debt levels. This step should also re-focus the financial discussion on more holistic measures of financial robustness, and integrate District initiatives such as asset management. Since it is unlikely that major cost efficiencies will arise post-merger, this report does not recommend a professional consultants’ report on the “financial feasibility” of a merger at this juncture. An important footnote is that the accuracy of this exercise’s conclusions will be compromised without the full cooperation of the City of North Vancouver and a commitment to transparent sharing of financial, tax, and service data. Goals: •

Understanding of genesis of opposition to reunification on financial grounds

•

In-depth examination of tax rates differentials between the District and City and analysis of likely changes

•

In-depth examination of assets and debt in the two municipalities

Key Resources: •

Managers, Finance

•

CNV data, resources, and other information

Potential Barriers: •

Very limited access to CNV information

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STEP 4 // 2018

CITIZEN ENGAGEMENT Rationale: Much information is needed from citizens in order to understand all of the issues around amalgamation from a citizens’ perspective. Particularly in the area of reunification drawbacks, District staff and council need to know which services matter most to citizens and how to ensure that satisfaction with services remains high through an amalgamation process. Further, a major knowledge gap involves “local factors” in amalgamation – how citizens engage politically with their governments, how that might change through consolidation, and in what ways North Vancouver “culture” is important and potentially strengthened and / or threatened by an amalgamation. Summary: Citizen engagement could potentially take many forms and would be revisited continuously as the reunification process advances. Surveys, committees, public forums, and online engagement could all be part of the process at different points. The research indicated that strong and constructive citizen involvement is crucial to a successful amalgamation initiative. Goals: •

Identification of residents’ key concerns and expectations regarding reunification

•

Understanding of citizen representation function of councils, citizen participation in local government

•

Document detailing major “culture” concerns among residents

Key Resources: •

Blue Ribbon committee members

•

Councilmembers

•

Potential committee on citizen engagement

•

Communications staff

•

Focus groups, surveys, etc.

Potential Barriers: •

Engagement should have direction at outset to prevent circular debate

DNV | JANUARY 2016

APPENDICES Appendix A Local Government Act [RSBC 1996] Chapter 323 Vote required for the incorporation of a new municipality 8 (1) The minister must not recommend the incorporation of a new municipality to the Lieutenant Governor in Council unless a vote of the persons proposed to be incorporated has been taken under this section. (1.1) If section 279 [no forced amalgamations] of the Community Charter applies, the vote under this section must be conducted separately in each of the existing municipalities. (2) In any of the following circumstances, the minister may direct that a vote be taken of persons in an area specified by the minister respecting the proposed incorporation of those persons into a new municipality: (a) on the request of the council of a municipality all or part of which is in the area; (b) on the request of the board of trustees of an improvement district all or part of which is in the area; (c) on the request of 2 or more residents of any part of the area that is not in a municipality; (d) on the ministerâ&#x20AC;&#x2122;s own initiative, if the minister is of the opinion that those persons should, in the public interest, (i) be incorporated into a new municipality, or (ii) if a change in local government were made, whether they would favour the proposed new incorporation or inclusion in a specified existing municipality. (4) A vote under subsection (3)(b) must be by 2 questions as follows: (a) the first question must ask whether the voter favours a change in local government for the area, either by the proposed new incorporation or by inclusion in a specified existing municipality; (b) the second question must ask whether the voter favours, if a change in local government were made, the proposed new incorporation or inclusion in the specified municipality.

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(5) As an exception to the requirement that the question to be voted on be in a form that a voter may indicate assent or dissent, a question under subsection (4)(b) must be in a form that a voter may indicate a preference. (6) As a limit on the authority of the minister under this section, a vote under this section must not be held in a local community under section 838 until 5 years after the later of the following: (a) the date that the local community was established; (b) the date that the latest vote under this section was taken in the local community.

DNV | JANUARY 2016

MUNICIPAL MERGERS IN BC ˃

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DNV CORPORATE SERVICES | JUNE 2016

Contents

> EXECUTIVE SUMMARY ........................................................................................................ 2 > INTRODUCTION .................................................................................................................... 3 > 1. BACKGROUND, CONTEXT, AND APPLICABILITY TO NORTH VANCOUVER ................. 4 > 2. THE 1995 AMALGAMATION .............................................................................................. 7 2.1 Referendum...................................................................................................................... 7 2.2 Transition Process ............................................................................................................ 8 2.3 Assessment .....................................................................................................................10 > 3. KEY LESSONS AND CONCLUSION .................................................................................13

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> EXECUTIVE SUMMARY A reunification of the North Vancouvers would follow the example set by the Districts of Abbotsford and Matsqui in 1995. Abbotsfordâ&#x20AC;&#x2122;s experience of getting to and going through an amalgamation is instructive for North Vancouverâ&#x20AC;&#x2122;s effort to understand the requirements for a successful referendum, the transition process, and potential outcomes. Abbotsford and Matsqui exhibited many of the same characteristics as the City and District of North Vancouver, including having a larger and a smaller partner, sharing key services, and struggling with the tension between similarities and differences in identity. The two municipalities debated amalgamating for decades before holding two referenda on the subject â&#x20AC;&#x201C; a 1990 vote was defeated, but a 1993 referendum saw the residents of the communities agree to join together. Afterwards, they had a little over a year to formulate a new organizational structure, harmonize bylaws and services, and staff the new municipality. There are several key takeaways from the Abbotsford experience. First, political leadership and continuity is important for a successful referendum and transition period. Second, amalgamation should not be entered into as a short-term proposition: it took decades for the two communities to fully unify, and expectations should reflect this fact. Third, there were important long-term benefits to the communities, including a greater capacity for shared projects, a stronger regional presence, and long-term planning. Last and perhaps most importantly, Abbotsford demonstrates that citizen-led amalgamations generally result in better outcomes than forced amalgamations. The city managed to avoid some of the pitfalls that other municipalities encounter since it had a popular mandate for change. To what extent a North Vancouver reunification would mirror the Abbotsford experience is an open question; nonetheless, their experience is a key resource for any future North Shore initiative.

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> INTRODUCTION Municipal amalgamations are extremely rare in British Columbia, especially between large and well-established urban communities; a reunification of the two North Vancouvers would be a singular event in modern British Columbia. Such a merger would be following a trail blazed two decades ago, however, when the districts of Matsqui and Abbotsford amalgamated to form the City of Abbotsford. The Abbotsford merger is unique in several ways. First, it stands in contrast to most other modern municipal amalgamations around the world since it occurred following a popular vote by residents of the communities. From Australia to the Ontario and Eastern Canada amalgamations of the 1990s, most cities merge via edict from a senior level of government. Because it occurred by popular vote, many aspects of the merger differed significantly from forced amalgamations experienced elsewhere, including the expectations for the new municipality, the transition process, and public buy-in. The Abbotsford consolidation also took place between two municipalities operating in British Columbia's Regional District system. This is unique because Regional Districts interact with municipalities and citizens in a way that other levels of government do not elsewhere in Canada. Since North Vancouver would be following some of the precedents set in the Fraser Valley in 1995, this report further explores that event. Its focus is two-part: first, to inform, describe, and explain the amalgamation and the path that led up to it; and second, to analyze and critically assess the merger to draw out key lessons for North Vancouver. In this way North Vancouver will have a better understanding of some of the expected results of an amalgamation and the process to become a unified municipality.

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> 1. BACKGROUND, CONTEXT, AND APPLICABILITY TO NORTH VANCOUVER Prior to their merger on January 1st, 1995, the Districts of Abbotsford and Matsqui were distinct governmental entities. They had separately-elected councils and employed unique staff. Although some services were shared between the Districts, the municipalities taxed residents separately and represented distinct communities. Abbotsford had been through a previous amalgamation: in 1973 the Village of Abbotsford merged with the District of Sumas to form the District of Abbotsford. Both the Village of Abbotsford and the District of Matsqui had been incorporated in 1892. Abbotsford was the smaller municipality of the two, with a population of approximately 19,000 in 1991, while Matsqui’s population was 68,000. The two cities differed in important ways. Homes were generally more expensive in Abbotsford, with many having been built on higher terrain east of the region’s city centre. With a significant difference in population, the cities operated differently. Matsqui tended to provide services through its own staff, while Abbotsford contracted out several municipal services. A smaller population in Abbotsford meant that the resident per elected official ratio there was lower than in Matsqui (9,700 residents per representative in Matsqui compared with 2,700 residents per representative in Abbotsford). The cities also maintained different tax rates for utilities, industry, farmland, and property. These and other elements contributed to each municipality having its own unique culture and identity. Yet taken together the two municipalities were the perfect example of contiguous communities that functioned as a single socio-economic unit. The central business district spanned both Clearbrook (Matsqui’s city centre) and Abbotsford’s core. The airport located in Matsqui was called the Abbotsford Airport. Operationally, the cities worked closely together. Fire protection, recreation, and transit were all provided jointly through service agreements between the municipalities, and these services had been provided jointly for nearly thirty years leading up to amalgamation. Both municipalities were growing rapidly: between 1986 and 1991 Abbotsford and Matsqui had grown 28% and 32%, respectively. Between 1981 and 1986, the Matsqui Census Agglomeration (including the two districts plus Mission) had been the fastest-growing Census DNV | JUNE 2016

Agglomeration in Canada. This growth was a function of numerous causes, though chiefly reflected growth in Vancouver and its suburbs and greater connectedness to the Fraser valley, allowing for the possibility of commuting to and from Vancouver for work. Strains from this rapid growth and problems with shared services were both important contextual factors behind the amalgamation debate and its eventual consummation. North Vancouver shares some key similarities with the Districts of Abbotsford and Matsqui at the time of their merger in 1995. First and most generally, in both instances amalgamating the communities appears to make good common sense. In both cases the cities are close together, with strong ties to each other, and are distinct from other surrounding municipalities geographically – in the case of Abbotsford, they were two halves of one urban area in the Fraser valley, while in North Vancouver, the North Shore is separated from the rest of the Lower Mainland by the Burrard Inlet. This is partly why, in both cases, amalgamation has been an issue for decades – in Abbotsford and Matsqui, as in North Vancouver, councils had discussed the idea for many years, with at least one previous failed referendum. The District of North Vancouver also has a complex array of shared service agreements with its counterpart, the City. In North Vancouver the City and District collaborate to provide RCMP protection; in Abbotsford and Matsqui, fire protection was shared. In both cases recreation is a jointly-provided good. Abbotsford and Matsqui experienced similar issues around representation and funding on joint committees. Further, all the municipalities involved provided services in the context of the same globally-unique Regional District system. The debate around amalgamation in both communities is strikingly similar. In both cases there is a smaller and a larger partner. Abbotsford’s amalgamation discourse in the early 1990s centred on the same issues as North Vancouver’s throughout the last half-century: appeals for greater efficiency, cost savings, and self-determination, with similar rebuttals on the grounds of fairness, culture, and aversion to increased bureaucracy. How much can North Vancouver learn from the valley municipalities in 1990s? Differences in the two cases hamper efforts to apply the lessons from one to the other. North Vancouver is growing at a much slower rate than the 25-30% experienced in the valley in the 1980s. Between 2006 and 2011 the City of North Vancouver grew by 6.7% while the District experienced just 2.2% growth. This partly reflects municipalities at different stages of their development: North Vancouver’s big growth spurt was post-World War II and into the 1960s, after which it settled into a mature community from a growth perspective. The Abbotsford area, DNV | JUNE 2016

in contrast, experienced much more suburban expansion, both geographically and demographically, at the time of its final amalgamation debate. There are a host of other differences between the cases. The populations and corresponding staff complements of the cities involved are larger on the North Shore; the computer and IT systems are vastly more sophisticated and ubiquitous now; the urban structure of the communities is different, with the City possessing more of the regionâ&#x20AC;&#x2122;s core than Matsqui did; and so on. These differences add uncertainty to the conclusions to be drawn from the Abbotsford-Matsqui case. On balance, though, the Abbotsford amalgamation is likely the most relevant Canadian municipal merger that can be examined, and one that provides at minimum some insight into the process of getting to and subsequently going through an amalgamation.

DNV | JUNE 2016

> 2. THE 1995 AMALGAMATION Abbotsford and Matsqui, like the District and City of North Vancouver, had a long history of discussions around amalgamation. These discussions waxed and waned throughout their history, but came to the forefront in the late 1980s and early 1990s. The primary issues driving the proposal centred on accommodating growth and resolving issues with shared services. As outlined, the region was growing rapidly at the time, and this raised questions as to whether a single municipality would be better able to handle the increased demands from new residents. One commentator noted: While it was acknowledged that the two municipalities had successfully accommodated population growth into the 1990s, it was also indicated that many municipal functions could be strengthened through greater cooperation. The areas of potential concern included transportation planning, revitalization of the city centres, and facilitating new residential developments and large scale projects.

At the same time, relations between Matsqui and Abbotsford were becoming strained over shared services. Two issues were most salient here: debates over funding and representation and the decision-making process. Representation on the committees was 50-50 Matsqui and Abbotsford representatives, though Matsqui provided 75% of the funding for the services. Regarding decision-making, the process of having two councils involved in ratification led to frustration and often devolved, in the words of the local paper, into a “’go ask your mother, go ask your father’ ping-pong game.” The situation was so untenable, in fact, that dissolution of the joint committees was expected unless another solution could be found (including an amalgamation).

2.1 Referendum The two municipalities struck a committee to guide the commissioning of a study to assess the benefits and drawbacks of amalgamation. The report was completed in 1990 and drew a number of conclusions, the most significant of which was a prediction that amalgamation would result in over $2 million in annual savings. A referendum was agreed to be held on the day of the municipal elections in 1990. Matsqui’s council was overwhelmingly in favour of amalgamating, while Abbotsford’s council was split on the issue. Abbotsford staff attacked the

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consultants’ report and the amalgamation proposal in a paper distributed to residents. Ultimately 86 percent of Matsqui voters were in favour of amalgamating, but just 45 percent were in favour in Abbotsford. Provincial law required that 50% of voters approve the measure in each municipality, and so the initiative failed. The amalgamation question did not die following this failed attempt, however: in 1993 a second referendum was held, with voters approving amalgamation by a count of 77 percent “yes” in Matsqui and 58 percent in Abbotsford. A few factors help explain the success of the second referendum. First, the politically salient issues (which played out in public discourse around the amalgamation question) had differed from operational concerns in both referenda. The municipalities were concerned foremost with growth and shared services, but in public discourse cost savings, “visibility” of the region, and tax rate differentials were key points of debate. Second, the business community represented by the Chamber of Commerce was strongly in favour of amalgamation, arguing for greater simplicity in business-government relations as well as with the province, and cost savings. Most significantly, however, Mayor George Ferguson of the District of Abbotsford came out in favour of amalgamation in the 1993 referendum, which was likely a necessary factor in the referendum’s success. Ferguson was a dominant political figure in the area, who became the new mayor of the unified municipality in 1995. He also occupied a key position as the leader of the smaller municipality. With both municipalities’ mayors on board with the plan to amalgamate, plus the support of the business community, enough residents were won over to allow the merger to proceed. Abbotsford was also decided on as the new name for the combined municipality. One commentator noted: “this last factor was probably crucial. Even though Abbotsford residents were clearly in the minority, the maintenance of their municipal designation made it appear that it was Abbotsford that was the dominant partner, not Matsqui.”

2.2 Transition Process After the referendum’s success in late 1993, it was agreed that the cities would merge on January 1st, 1995. Again the municipalities hired a consultant, this time to advise on the transition process and designing the new operational structure. The elected councils of Matsqui and Abbotsford combined to form a Joint Council, which then filled the position of City Manager for the new municipality, with help from the consultant. From there the new City Manager and consultant interviewed for department heads and made recommendations to the Joint Council,

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which ultimately made the appointments.1 By early 1994 the Joint Council and new management team commenced work integrating the two municipalities. The Joint Council met for roughly ten hours a week for the year to resolve issues at the council level, while the two municipalities also spent about eighty hours in negotiations with the provincial government. Among the myriad issues needing resolution, several were of particular importance: reconciling tax differentials, bylaw harmonization and staffing decisions.2 Tax differentials were reconciled over a five-year phasing period, an initiative that was especially significant for Abbotsford residents since their property tax rates had previously been lower than those in Matsqui. The new council also adopted a policy committing to not increase taxes for several years after the amalgamation. One factor that made this process easier was a decline in tax rates prior to the merger. Since 1993 both municipalities had seen reductions in residential and business tax rates, in part because of a rapid increase in assessed property values â&#x20AC;&#x201C; from $5.36 million in 1993 to $6.77 million in 1996. The tax differential phase-in was well-received by residents of the communities, in part because it was well-known prior to the amalgamation that this would be occurring. Prior to the amalgamation the consultantsâ&#x20AC;&#x2122; report predicted that a combined municipality would require twenty-five fewer positions than the combined total previously, primarily due to reductions in management and administrative support positions. Post-amalgamation there were twenty-seven fewer positions, although this decrease was due primarily to attrition (retirements and employees moving on) with some reductions from management positions. During the process staff worked with employee unions to ensure that unionized employees in the previous municipalities would find similar positions in the new municipality, an initiative that was largely successful. In 1996 Abbotsford filled twenty-six new positions, bringing the total employee count to effectively what it had been before. However, these positions were filled in fire services, police, and recreation, which had not seen reductions during the amalgamation process. These positions were also required to meet the increased demands put on those services by a growing population â&#x20AC;&#x201C; for instance, twelve of the fire positions had been committed to in 1993 prior to the merger. 1

Any employee from either municipality could apply for executive positions. Further, though the consultant and new City Manager made recommendations on staffing these positions, not all were rubber-stamped by the joint council, with at least one case of council choosing a different candidate than the recommended one. 2 A difficult issue that resulted in a controversial decision was whether to keep a municipal police force or contract the RCMP for policing. Ultimately, a municipal force was decided upon, a decision still questioned by some today.

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Bylaws between the two communities numbered in the thousands, and each had to be examined and harmonized to avoid duplication. The outcome of this process was several resolutions before council that repealed large numbers of bylaws and clarified which were to be in effect going forward. In the years after the amalgamation numerous new initiatives had to be adopted, including a Corporate Strategic Plan in October 1995 and an Official Community Plan adopted in July 1996.

2.3 Assessment In the end, how successful was the amalgamation of Matsqui and Abbotsford? This question is of course difficult to answer objectively and definitively. As discussed in “Merging Municipalities,” municipal consolidations have a huge number of impacts on the communities involved. Further, it is often unknown what would have happened if the municipalities had remained separate. Nonetheless, some information is available on the merger’s impact on government finances, and the time gap of twenty years allows for several conclusions on longterm impacts. The 1990 report claimed that Abbotsford could expect over $2 million in annual savings from an amalgamation. Did these savings materialize? One scholar notes: In 1994, the last year before amalgamation, combined expenditures of the two municipalities was $61.8 million. In 1997, the third year of operation for the amalgamated municipality, total expenditures were $63.8 million, an increase of 3.3 percent over the 1994 number. During the same period, the total population of the area increased by 6.8 percent, from 102,000 to 109,000. Both pro- and anti-amalgamationists can presumably draw modest comfort from these figures. But…the initial conclusion must be that, financially, the amalgamation did not make much difference.

Some nuance can be gleaned from the official figures. In the 1995 year, reductions in staffing saved some $1 million in a $46 million budget, though these costs increased the year following due to the staff add-ons in fire and recreation. The one-time cost of amalgamating, which was incurred in the 1995 year, was $1.15 million. This included $477,000 for changes in the zoning bylaw and the introduction of the new OCP. Two other major components of the transitional costs involved merging policing and engineering services. In total the one-time costs of amalgamating represented a figure of around $13.50 per capita.

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Prior to the amalgamation it was expected that the services under the shared jurisdiction of Matsqui and Abbotsford would improve, or at minimum would operate more efficiently. From the 1990 consultants’ report: The majority of staff and residents interviewed in Matsqui and Abbotsford felt that amalgamation would lead to an improvement in the services offered by the Recreational Commission. The reasons stated for this expected improvement are as follows: 

the Commission would be responsible for all recreational facilities rather than the piecemeal responsibility it currently has (ie. some facilities remain under the control of one or the other municipality);



political and administrative problems arising from the necessity to deal with two municipal bodies would be avoided;



maintenance agreements could be negotiated more simply and efficiently, rather than the current situation of dealing with both public works departments and the School Board;



the delivery of services would be simplified under the direction of one department;



public confusion as to who owns and operates each facility would be eliminated; and



amalgamation could allow more efficient recreation and parks planning and development for the residents of the two communities.

Similar benefits were expected in the realm of economic development: Achieving [the department’s] goals is currently hampered by the division in the two municipalities. It is difficult to market the municipalities individually because the full range of services available in the area cannot be properly represented. Moreover, the different planning and development bylaws of Abbotsford and Matsqui require explanation to potential investors and developers.

Although no formal evaluation of resident satisfaction was conducted after the amalgamation, anecdotal evidence suggests that the citizens of the two municipalities generally viewed the merger as favourable. Residents’ acceptance of the amalgamation’s results can be attributed to the democratic nature of the amalgamation, as well as the interconnectedness of the two communities beforehand. It seems clear that Abbotsford experienced some long-term gains from the amalgamation. Having a united community has made economic development easier, and increased “visibility” in the region, along with greater simplicity in relationships with the regional district and provincial government. The merger also allowed the area to engage in projects it

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otherwise would not have, such as a $16.9 million water filtration plant completed in 2003, and highway interchange upgrades. One observer noted benefits in sewer and water infrastructure: The older network of pipes within the former district of Abbotsford – for both water supply and sewers – is in the process of being rehabilitated by the new amalgamated municipality. Such integration and infrastructure renewal is exactly what we would expect from a successful municipal amalgamation. More funds are probably being spent than if there had been no amalgamation, but the quality of the infrastructure is enhanced and the costs are spread more widely.

Regarding planning, integration of the communities took many years. The 1996 OCP was the first attempt at bridging the planning divide between the two communities, and a second followed in 2005. It is only in the current OCP, however, that reflects Abbotsford’s ability to truly plan as one community – a gap of more than 20 years. North Vancouver’s potential amalgamation will certainly result in vastly different financial outcomes for several reasons. First, Abbotsford and Matsqui moved their new City Hall to the building previously used as Matsqui’s municipal hall. This saved a large amount of money since it not only spared the new city having to purchase real estate and build a new hall, but also because the majority of the new city’s employees and their equipment did not have to be relocated. Second, IT consolidation and harmonization was minimal compared to what would be required today, which would more closely resemble the costly amalgamations of regions like the Halifax Regional Municipality – where email harmonization between the municipalities alone led to months of delays and significant costs. Third, Abbotsford was able to avoid salary increases for employees beyond an expected 1.5% cost-of-living increase, which is in contrast to other amalgamations which result in increased salaries from new collective bargaining agreements and increased employee specialization. Whether the North Vancouvers would be able to emulate this facet of the Abbotsford merger is an open question.

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> 3. KEY LESSONS AND CONCLUSION Key Lessons: 

Political leadership is important: One of the most telling aspects of the Abbotsford experience is the fact that a successful referendum occurred three years after an unsuccessful one on the same question. By all accounts George Ferguson’s support for the proposal as mayor of the smaller community was a crucial factor in the initiative’s success. Having consistent political leadership through the entire process, from referendum to drafting new strategic documents, is a necessary component of a successful merger.



It’s a long-term proposition: The City of Abbotsford took decades to forge an identity as a truly autonomous community separate from its previous halves, and this process is still ongoing. This is partially why political leadership is so important to the process: residents of the two municipalities were required to make short-term sacrifices to achieve the long-term benefits of an amalgamation. For residents of the District of Abbotsford, this meant property tax increases five years in a row, while the municipalities made a significant one-time financial investment.



There can be important long-term benefits: the long-term benefits of the amalgamation appear to be significant: a greater capacity for economic development and enacting large projects, greater regional visibility, elimination of administrative problems with shared services; ease of interaction with other governments; and consistent regional planning rank as some of these benefits.



Finances and service levels did not see significant changes: although the costs of restructuring were significant (and would be much, much higher for the North Vancouvers), they were relatively easily absorbed by the municipality. The amalgamation did not result in the cost savings predicted beforehand, but neither did it cause costs to skyrocket. Similarly, despite the vociferous debate around amalgamation in both 1990 and 1993, residents were generally supportive of the initiative and did not report dramatic decreases in satisfaction with municipal services. One of the primary conclusions of “Merging Municipalities” was that the Regional District

system in British Columbia would preclude some of the economic benefits that other municipalities might experience in other jurisdictions, since there would be fewer economies of DNV | JUNE 2016

scale to gain. A primary conclusion from this report on Abbotsfordâ&#x20AC;&#x2122;s merger is that the circumstances surrounding the amalgamation are also important: Abbotsford avoided many of the pitfalls that other municipalities experience because the process was referendum-led. One scholar notes: The City of Abbotsford is an important case study, because it challenges a number of longstanding theories regarding amalgamationâ&#x20AC;ŚIf a referendum is carried out, as in the case of Abbotsford, the public can then evaluate the proposed restructuring initiatives based on very clear expectations of the anticipated impacts. As in the case of municipal salaries, any changes to service provision will be based on explicit decisions to adopt those particular standards.

In sum, a North Vancouver amalgamation would have less to gain than some municipal amalgamations, but also less to lose. Referendum-led mergers are rare, and, if Abbotsford is taken as a model, result in better outcomes than forced amalgamations. The Abbotsford case study also confirms the draft conclusion that North Vancouver would be well-positioned to benefit from a merger in the areas of long-term planning, strategic capacity, and intergovernmental relations. Over twenty years on, the City of Abbotsford is still working to chart a path as a unified political entity. In contrast to other municipalities around the world and in Canada that still have deep divisions or experienced de-amalgamations, there is no talk of Abbotsford separating. And though there were significant benefits as well as sacrifices, the citizens of the Fraser Valley municipalities ultimately overwhelmingly voted to join together. In the final analysis, this may be the most important lesson. In the words of one observer: Amalgamation in Abbotsford did not result from service-production problems, or even from expectations that service production would be significantly improved. It resulted from the political fact that voters in two separate communities decided that what united them had become more significant than what divided them.

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Duncan â&#x20AC;&#x201C; North Cowichan Amalgamation Study Review

DNV CORPORATE SERVICES | FEBRUARY 2018

Contents Overview of Amalgamation Study Process................................................................................. 2 Technical Analysis Summary ..................................................................................................... 3 Overview ................................................................................................................................ 3 Findings.................................................................................................................................. 3 Analysis ..................................................................................................................................... 3 Applicability to DNV ................................................................................................................ 4 Links .......................................................................................................................................... 5 Appendices ................................................................................................................................ 5

Overview of Amalgamation Study Process The municipalities of Duncan and North Cowichan on Vancouver Island are considering amalgamating. Their study into amalgamation began in 2014 when the two municipalities agreed to include a non-binding opinion question on the municipal election ballot asking residents whether the cities should investigate the benefits and costs of amalgamation. The electorate approved of the initiative, with 68% of voters in the larger North Cowichan and 52% in smaller Duncan voting in favour. The municipalities then contacted the provincial government to inform the ministry of their intention to study the issue; the province agreed to provide one-third of the funding for a study (up to $47,000). The cities contracted a consultant (MASS LBP) to assist with the formation a Citizens’ Assembly, which was formed in late 2016 and met throughout the Spring of 2017. Concurrently, the municipalities hired another consultant, Urban Systems, to provide a technical analysis of the issue. The Citizens’ Assembly was created by selecting members at random from a pool of residents who volunteered to participate; participation was open to all residents over the age of 18 in both municipalities. Its mandate was “to learn about the needs and interests of local residents, examine the implications of creating a new, amalgamated municipal government, and advise local councillors and their administrations on the conditions under which the municipalities should proceed.” By April 2017 the Citizens’ Assembly had fulfilled its mandate, having met six times and hosted two public roundtables. At this time Urban Systems also concluded its technical study and presented it to the Assembly and two municipalities. Duncan and North Cowichan debated scheduling a referendum on the question of amalgamation either as a standalone question in Spring 2018 or included on the municipal election ballot in Fall 2018; ultimately the councils decided on a standalone question to be held in Spring 2018. Currently, the Provincial government has paused the referendum approval process, asking for more information from the two cities; the ultimate date of the referendum is now unclear.

Technical Analysis Summary Overview Urban Systemsâ&#x20AC;&#x2122; completed a technical analysis from January to April 2017. The report is 112 pages and provides background on the issue, attempts to determine the impact of amalgamation on a range of municipal services, and estimates financial impacts. The consultant used interviews and field visits to gather information, as well as reviews of documents, policies, etc. The report also drew from a local Advisory Panel, consisting of former Duncan and North Cowichan senior staff and councillors, which lent its expertise to the initiative.

Findings The report assesses potential changes to service areas in the two communities (general government, planning and development, public works and engineering/transportation, protective services, environmental health, and parks and recreation), as well as financial impacts and other considerations. The report neither draws definitive conclusions nor makes recommendations, but rather details how amalgamation may impact each area. According to the analysis, amalgamation may result in relatively minor tax changes as well as several million dollars in one-time restructuring costs. The report also details other notable impacts, particularly to police funding and water services in the communities.

Analysis Duncan and North Cowichan are contiguous communities which share many services, with municipal distinctions that have little impact on residents â&#x20AC;&#x201C; in short, ideal candidate municipalities for amalgamation. Though there are several instances of contiguous communities in the province, municipal amalgamations are rare in British Columbia: the Matsqui-Abbotsford amalgamation in 1995 was the last to occur in the province. Partly this is because voluntarily amalgamating two municipalities represents a daunting political task. Nonetheless the DuncanNorth Cowichan process has so far passed many of the major hurdles towards amalgamation: the two councils have agreed to cooperate on studying the issue; citizens approved investigating the possibility of amalgamating; the citizensâ&#x20AC;&#x2122; committee was successfully struck and fulfilled its mandate; and the municipalities agreed to a formal referendum.

Applicability to DNV The applicability of Duncan-North Cowichan’s technical study to North Vancouver is limited, primarily because the value of an amalgamation is heavily dependent on the immediate situation of the municipalities. Duncan and North Cowichan are both much smaller than the North Vancouver municipalities, at roughly 5,000 and 30,000 residents respectively. Relevant factors to the debate for these municipalities are quite different than those on the north shore: for instance, water provision would see a big change under an amalgamation, whereas in North Vancouver this is not an issue. By the same token, the study’s findings that would be relevant to other municipalities are mostly well-known and generally broad: benefits in planning and transportation, potentially high one-time costs, low potential for cost savings, and so on. These insights are summarized in DNV’s report Merging Municipalities from January 2016. As such the DuncanNorth Cowichan study has little new to offer the debate on amalgamation in North Vancouver. Nonetheless the process that Duncan and North Cowichan have followed in pursuit of amalgamation is a useful case study. Their process began when both councils agreed to put the question of studying the issue to their residents in a ballot question – since this question was successful the cities were able to match their political will with popular support and proceed with a mandate. The Citizens’ Assembly was formed with sensitivity to the two communities and aided by a consultant with expertise in public dialogue. The assembly was given the freedom to explore the issue, and benefitted from effective research in the form of the technical analysis. Throughout the technical analysis, the municipalities shared their information and demonstrated a willingness to collaborate through the Advisory Panel. The result was a robust process that involved and empowered both the residents of the communities and municipal staff and councils. The date of the final referendum was carefully debated and separated from the municipal election so as to not distract from its value. In sum, this experience illustrates that in the event two municipalities are willing to cooperate, the provincial government can be a willing third partner, citizens can become actively and positively engaged in the issue, and high-quality technical analyses can inform the debate. The two municipalities have ultimately empowered their residents to have the final word, supported by a thoughtful process carried out in good faith, thereby giving a difficult issue its best opportunity to be assessed fairly. Their process also illustrates the high quality of information required to seriously advance a restructuring, as the Provincial government asked for additional information beyond the substantial work done by consultants and the Citizens Assembly. For 4

North Vancouver, Duncan and North Cowichan illustrate the scope and breadth of the task ahead for reunification.

Links Citizensâ&#x20AC;&#x2122; Assembly Final Report Technical Analysis

Appendices Appendix 1: Excerpts from Citizensâ&#x20AC;&#x2122; Assembly Report Appendix 2: Excerpts from Technical Analysis

Final Report and Recommendation of the DuncanNorth Cowichan Citizens’ Assembly “Some of us have lived our whole lives here; others have recently arrived...We volunteered because we each saw this as an opportunity to give something back. We were curious to learn more about local government and become more informed about the way the two municipalities are managed. While we come from different backgrounds, we shared a desire to make a meaningful contribution to our communities.”

May 2017

Table of contents

Chair’s Note Did you know? About the Assembly Assembly Guests Assembly Snapshot Proceedings of the Assembly

3 5 7 9 10 11

Members’ Report and Recommendation Meet the Members

19 25

Appendix Minority Reports Public Roundtable Meetings Terms of Reference

31 31 33 41

Final Report of the Duncan-North Cowichan Citizens’ Assembly

DUNCANNORTH COWICHAN CITIZENS' ASSEMBLY dnc-cama.co

Duncan-North Cowichan Citizens’ Assembly Members’ Report

We are volunteers who were randomly selected using a civic lottery to serve our communities as members of the DuncanNorth Cowichan Citizens’ Assembly. Last November, invitations were randomly distributed to 10,000 area households. 144 people responded and 36 of those respondents were randomly selected to represent the two communities and roughly match their demographic profile. Half of our members are men, and half are women. We represent a range of age groups and come from many different backgrounds. Some of us have lived our whole lives here; others have recently arrived. Twelve of our members are from Duncan, and twenty-four are from North Cowichan. We volunteered because we each saw this as an opportunity to give something back. We were curious to learn more about local government and become more informed about the way the two municipalities are managed. While we come from different backgrounds, we shared a desire to make a meaningful contribution to our communities. We met for six full Saturdays over four months and listened to presentations from a range of residents, business owners, public servants, first responders, academics, Indigenous leaders, and community stakeholders in order to understand the needs and perspectives of different people in our communities. We also convened two public roundtable meetings, where we shared what we learned with residents and listened carefully to their feedback. Our members sought out their neighbours, friends, and colleagues for their perspectives as well.

We examined technical and financial analyses and came to understand them well. We posed many questions to our guests and to the technical consultants, and appreciated their care in answering our questions. We considered the areaâ&#x20AC;&#x2122;s history and learned from both successful and unsuccessful amalgamations in other BC communities. We believe this process was thorough and collaborative. We strove to be impartial in our conduct and discussions. Throughout our time on the Assembly, we listened carefully to each other and tried to set aside any pre-conceived ideas. On balance, we were openminded and tried to be considerate of different points of view. Our Values During our first two meetings, we identified seven values that helped us to find common ground. We used these values to help guide our discussions and weigh different scenarios. Efficiency and cost-effectiveness We value local government that exercises good fiscal responsibility and works efficiently and consistently to respect residentsâ&#x20AC;&#x2122; time and money. Quality services and infrastructure We value local government that provides quality services and infrastructure that have a measurable impact on the well being of residents. Our services and infrastructure should be costeffective, mindful of current needs and future growth, highly satisfactory and appreciated by residents, and based on best practices. Public engagement We value local government that proactively and regularly engages residents in local governance and decision-making. Good local government fosters public learning, consultation, collaboration, and transparency. Environmental stewardship We value local government that ensures the protection of our air, water, wildlife, and green spaces. It works to enrich our urban, rural, and agricultural communities and ensure continued economic and ecological vitality for all. Collaboration We value local government that exemplifies an inclusive, non-partisan and collaborative approach to meeting the distinct needs and interests of our many communities. Accessibility, Approachability and Accountability We value local government that is: easy to access, whether online, by post, in person, or by phone; willing to listen and seriously consider different perspectives in genuine dialogue with constituents; responsive to residents; and committed to providing clear explanations for its decisions. Final Report of the Duncan-North Cowichan Citizensâ&#x20AC;&#x2122; Assembly

Respect for local differences We value local government that takes care to ensure that local voices, sensibilities, character, and communities are preserved, recognized, and enhanced. We also drew up a list of issues and questions we wanted to address in our deliberations. It is by answering these questions and examining amalgamation through the lens of each of these issues that we ultimately reached a strong consensus. Our issues 1. 2. 3. 4. 5. 6. 7. 8.

Consistency of services Governance and leadership Economic development Environment Culture and identity Land use and planning Taxes Efficiencies and savings

Specifically, we wanted to know: • Whether amalgamation would be more financially viable than the status quo? • How amalgamation would impact residential and business taxes? • How amalgamation would affect zoning and bylaws? • How amalgamation would change the public and protective services that residents receive? • Whether amalgamation would change or dilute the identity of local communities, and how might a shared identity strengthen perceptions of the area? • What might the consequences be of not amalgamating? • How amalgamation stacks up against other options, including closer service integration and boundary changes? • How amalgamation could affect environmental policies and change the focus of both municipalities’ Official Community Plans? • Whether amalgamation would affect the local economy and lead to more and better jobs? • Whether amalgamation would affect relations with local First Nations? • What might the process, costs, and potential savings of amalgamation look like?

What we learned Perhaps, like many people, we assumed that Duncan was larger than it is. In fact, it occupies just two square kilometres and has a population of just under 5,000 — one-sixth of the population of North Cowichan, which is home to almost 30,000 people. This makes Duncan Canada’s smallest city by area. Until 1912, Duncan was part of North Cowichan and served as the Cowichan Valley’s downtown, much as it does today. This historical context is important, and our two communities have been considering amalgamation almost ever since they separated in 1912. Each generation seems to ask this same question, believing that the two communities would be more successful together. Many of us assumed that amalgamation would save money and hoped it would lead to lower taxes. Others feared that amalgamation would only drive up costs. As we learned from the technical study, amalgamation is likely to have only a modest impact on residential and business taxes. On its own, amalgamation will not save much money. Both municipalities already co-operate closely, and there appear to be few obvious efficiencies. Amalgamation will not change the population of the Cowichan Valley—there will be as many citizens requiring services following amalgamation as before. Even the neighbouring fire halls provide complementary services; merging them would likely cost more, not less. We learned that important factors like policing costs and infrastructure should also be considered when evaluating the case for amalgamation. The formulas, provincial programs, and drivers of costs are complicated, but we could all agree that both Duncan and North Cowichan would benefit from having more police services and infrastructure investment, and so both communities would likely benefit from drawing on a shared tax base. We also learned that businesses are often frustrated with what they perceive as an unequal playing field; two different sets of bylaws and zoning regulations create confusion and can become costly. We all know that the Cowichan Valley is a special place: it has long been a community of communities. We believe the strength of local identity matters and should be preserved and enhanced. Some of us came to this process thinking we already knew how local government works, but we now know a good deal more. Based on our work together and what we’ve learned, we’ve reached a strong consensus. Our recommendation We have carefully considered the technical information and different scenarios for the future of our two municipalities, including closer service integration.

Final Report of the Duncan-North Cowichan Citizens’ Assembly

We believe that Duncan and North Cowichan will be stronger together, and so our consensus as an Assembly is to recommend amalgamation. We believe that amalgamating Duncan and North Cowichan into a single municipality will make possible lasting co-operation. Amalgamation will enhance the sustainability of our communities by strengthening our fiscal foundation and allow local government to pursue a more coordinated approach to encouraging economic growth, delivering efficient and effective public services, and ensuring that residents benefit from good local planning and strengthened environmental stewardship. We believe amalgamation will ensure that local government in the Cowichan Valley pursues a common vision and that residents benefit from a harmonized approach to services, policies, and governance. These benefits include: • One Council • Streamlined regulations and bylaws • A level and consistent playing field for businesses • One Official Community Plan with consistent and coordinated land use policies Additionally, we recommend that: 1. Should both Councils endorse amalgamation, that they establish a joint amalgamation working group to develop a clear proposal for amalgamation prior to a referendum. This working group would develop: • A framework to ensure equitable representation for each of the Cowichan Valley’s distinct communities. The framework could include an expanded role for neighbourhood and business improvement associations and ad hoc and issue-specific advisory committees, and also consider whether an amalgamated municipality should adopt an at-large or mixed-ward system; • A multi-year transition plan to ensure equitable residential and commercial tax rates; and • A universal standard of service that would apply across the proposed amalgamated municipality. This working group would also: • Propose a clear and concise referendum question that is identical in both municipalities; 23

• Determine whether a simple majority or a higher threshold should be met, and ensure that the same threshold applies in both municipalities; • Ensure that the referendum occurs in conjunction with the next municipal election; and • Allocate sufficient funds to develop a referendum communications plan to ensure that residents are well-informed. This plan should use all available media, including a dedicated website, community information sessions, and a direct mail package including a summary of the Citizens’ Assembly and Technical Reports, as well as a clear accounting of any anticipated financial impacts, to all area households. 2. An amalgamated Council harmonize zoning regulations and develop a new official community plan and local area plans to designate and invest in the municipality’s unique features, strengthen environmental stewardship, and promote a more coordinated approach to economic and social development; 3. An amalgamated Council harmonize bylaws to ensure consistency for local businesses and industry; 4. An amalgamated Council retain independent consultants to identify staffing redundancies and inefficiencies; 5. Current and future Councils continue to build and strengthen a respectful and cooperative relationship with local Indigenous communities; and 6. Current and future Councils work to foster a strong sense of civic responsibility and community through information campaigns that include mechanisms for on-going feedback and dialogue.

Final Report of the Duncan-North Cowichan Citizens’ Assembly

Meet the Members

Tanya Ablonczy: I have lived in Cowichan Valley for twenty-three years – or my entire adult life – and have lived in the heart of the city of Duncan for the past fourteen years. I first came to the valley as a young child from Alberta visiting relatives, and even at that young age, was awestruck by the wonder of this unique and incredible place. I settled here when I became a mother, because I believed it to be the cleanest, safest, and most beautiful place for children to grow up. I volunteered to be a member of the Assembly because I am passionately concerned about the strength, safety and economic viability of my community, and I believe strongly in civic duty and the power that comes to the average citizen through being accurately informed. Andy Anand: I am from India and have lived in the Cowichan Valley since 1957. I worked at the Crofton Pulp Mill and have been retired since 1995. I am 85 years young. It was my passion to do volunteer work in the community. I have been on the school board, a chief ranger in the IOF, and a member of the Centennial Committee. I was vice chairman when the Queen visited and laid the cornerstone in the senior centre building. I have been vice chairman of the library building, the old swimming pool, and the hockey rink. I have studied at the night school on topics such as power squadron, paper-making, business management, accounting, upholstery making, lumber grading, and PLIB. I’ve played tennis and cricket and was a past member of the junior chamber of Commerce. I go fishing and camping with my family, and wanted to volunteer for the Citizens’ Assembly because I want to see Duncan and North Cowichan use their resources better. James Atkinson: Born on Vancouver Island, I left when I was twelve years old, and returned to live in North Cowichan nine years ago. I am a supervisor for the British Columbia Ambulance Service, based in Chemainus. I currently live in Crofton. I am also an active member of the Crofton Fire Department, and I was a member of the advisory working group, that assisted in the formation of the Crofton Local Area Plan for Revitalization in the Crofton Area. Since moving to the area, I have been interested in how the communities of Duncan and North Cowichan might better manage their resources. Martin Barker: I am a chiropractor in the city of Duncan and have lived in the valley since 1993. Originally employed at the Crofton Pulp Mill, I took advantage of an extended strike and the Forest Renewal program to train out of the forest industry – first with a degree in Kinesiology and then one in chiropractic. I am also one term short of a microbiology degree. I am an avid exercise enthusiast and backpacker and can often be found in the gym, running the local trails, or in a tent on some remote beach. This year, I plan to run my first marathon (Victoria) at the age of fifty. I slowly developed an interest in local politics, which culminated in serving on a past Duncan City Council. Now, as a citizen at large, I am very interested in the future of the valley and feel very fortunate to be involved in the Citizens’ Assembly. Jaye Bryan: After thirty years working and raising a family in Williams Lake, BC, my husband and I retired to our sunny plot of land in North Cowichan nearly five years ago. A former teacher/administrator, I currently volunteer at the local BC SPCA shelter (Cowichan and District) as a dog walker and as the Community Council chair. Along with our family pack of three dogs, I enjoy exploring the many hidden trails and infinite number of back roadways that the Cowichan Valley offers. This ongoing discovery of our district’s historical background, and my perceived view of the area’s unique mix of rural and urban neighbour25

hoods, made it important for me to join this Citizens’ Assembly and have a voice in our community’s future. David Clark: My wife, Anna, and I relocated to the Cowichan Valley in 1988 and have lived in both the Municipality of North Cowichan and the City of Duncan. With over forty years of experience in real estate appraisal, I have had the opportunity to interact with local businesses and municipal governments, which gave me insight into the development process and planning, zoning, and building. We have seen Duncan and the Cowichan Valley grow and prosper. In retirement, there is personal reward in giving back to my community. I participated in the Citizens’ Assembly because I believe I have something to contribute to the future prosperity and continuing diversity of Duncan, North Cowichan, and the Cowichan Valley. Dee Dohm: I was born in this area seventy-six years ago to a wonderful, supportive family. My paternal ancestors were pioneers in the area who, through many hardships, worked to build and support the community. My maternal grandparents moved to the area in the 1920s from French Canada. After completing my education, I had many opportunities to travel and work around the world.When I retired at sixty-eight, I developed an interest in comparing the livability of the places I had visited to my home community, wondering whether it is time for a serious change. My interest in the governance and growth of my community also led me to serve on the Duncan-North Cowichan Citizens’ Assembly. Nora Dowsett: I was born and raised in the Cowichan Valley but moved to Ontario for fifteen years after getting married. We were fortunate enough to be able to move back to Duncan in 2001 and are loving it! I am a recently retired financial planner, and throughout my career, I helped people achieve their retirement goals and offered advice on investments, tax, and estate planning. I am very involved with the Rotary Club and am currently serving as president of our club. I joined this Citizens’ Assembly because I believe it is important to give back to your community when you are able to. In my free time, my passion and main de-stressing activity is gardening. Beverly Hampson: I’ve lived on Vancouver Island on and off for over ten years and contributed to multiple community initiatives. My extensive background in statistical data retrieval and analysis led me to become increasingly interested in participating in community organizations. I currently work in post-secondary education and value higher learning, which has contributed to my community interests. Hendrik Hiensch: I have lived in North Cowichan with my family since my wife and I emigrated from the Netherlands twenty years ago. Currently, I am self-employed as a real estate investor, and prior to entering the real estate business, I worked as a natural stone mason. One of the many reasons I love the valley is because it runs on island time, which fosters a more relaxed culture than mainland Vancouver. Sailing around the Gulf Islands in my spare time is my main hobby, which I enjoy all year round. I volunteered for the Assembly because I want to give back to the community that has been good to me and my family, and I hope the Assembly will have real and positive impact on the future. Shiyana Hunter: I am the daughter of Sandra Patricia Hunter and Jerry Lee Miller from Ontario. I’ve lived in BC for most of my life. My fourteen years in the “Warm-land” have seen me in various areas – from the top of the Malahat to my current residence in Duncan. I am a student, mother, and community member. I am working towards a Bachelor of Arts with a major in sociology and a minor in liberal studies, and I volunteer my time to various clubs and student positions. I care deeply about all people and places, and embrace collaborative problem solving, which motivated me to take part in the Citizens’ Assembly. Tyler Jackson: I was born and raised in the Cowichan Valley. For the past fifteen years I have been employed in the construction industry. Currently I am construction superintendent for a family-owned Island Ionstruction Company. I joined the Citizens’ Assembly due to deep concern for the future viability of the Cowichan Valley and its citizens. I truly want to see the Cowichan Valley succeed in two ways: as a hub for smaller locally owned businesses and as a vibrant organic agriculture industry. Kathryn Jacobsen: We moved to Chemainus in 2014 after working in both Toronto and Final Report of the Duncan-North Cowichan Citizens’ Assembly

Calgary. I am thrilled to be back “home” in BC, where I was born. I am the first vicepresident for the Chemainus Health Care Auxiliary, a non-profit organization which was established in 1899 and whose mission is to raise money for patient and health care in the province. I take every opportunity to be an active participant in my community, socially, politically and environmentally, because I believe we all have an obligation to nurture and protect how and where we live, now and for the future. Mona Kaiser: I grew up on Thetis Island, attended school in Chemainus and Duncan, and completed a degree at the University of Victoria (BA Hons. Eng.). Studies took me to the mainland for graduate work in history at Simon Fraser University (MA) and for doctoral work at the University of British Columbia. I have had the opportunity to travel widely throughout Europe, North America, Australia and New Zealand – and with my husband, Tom Rimmer, have lived and worked in many small BC communities and Nova Scotia. We returned to the Cowichan Valley in 1999, bringing these experiences with us. As a full-time parent of two with an interest in community planning and engagement, I have enjoyed serving both municipalities through advisory work on North Cowichan’s Community Planning Advisory Committee, and Parks and Recreation Advisory Committee; Duncan’s Totem Committee. Volunteer work includes “Reel Alternatives” (CV Hospice), Parent Advisory Committees, Canadian Parents for French, and most recently, vice-presidency for the Cowichan 2018 BC Summer Games. Some of my most rewarding community projects include establishing SD79’s first outdoor classroom and spearheading funding and construction of the valley’s first intergenerational community playground. Richard Matthews: My wife Sandi and I have lived in Chemainus for twenty-four years, where we happily raised our two children. I am proud and blessed to work with the youth of our beautiful Cowichan Valley, mostly in Duncan, as a school counsellor with District 79. I love to travel, hike, and take photographs in Cowichan and beyond. I have volunteered in various capacities of community service. I chose to volunteer for the Citizens’ Assembly to engage my valley neighbours in a worthwhile discussion and to celebrate democracy. Justin McNutt: I am a Canadian-born technology and e-commerce entrepreneur and philanthropist, currently completing a Bachelor of Engineering in civil Eengineering at the University of Victoria. I am currently working on the development of a local mining company and a tech sector in Cowichan Valley. Some of my interests include sports, business, economics, real estate, computer programming, web development, mathematics, geology, and outdoor activities. I also spend some of my time volunteering with the Victoria Innovation, Advanced Technology, and Entrepreneurship Council. I volunteered for the Citizens’ Assembly because I consider community engagement to be a key strategy for achieving lasting change. Anne Murray: I moved to the Cowichan Valley in 1959 after immigrating from the UK to Prince George in 1958. In 1942, I left Singapore as a refugee. I have five children, and have held several positions in the community. I worked as a hospital nurse, served as a school trustee for twelve years, and served as a Councillor for nine years. I have also volunteered as a community worker in child and senior care and emergency services, in addition to volunteering with museums in the area. I decided to participate in the Assembly because I love being involved with my vibrant community and working to make a positive difference for our future. Susan Newns: I was born in England, grew up in South Africa, and immigrated to Canada in the early 1980s, finally landing in the beautiful Cowichan Valley area where I currently live. I am a recently retired English and social studies secondary school teacher, and I appreciate the hands-on opportunity offered by the Citizens’ Assembly to experience the policy development involved in local governance and to brainstorm with my fellow citizens about the best vision for our community. Now that I have some spare time, I enjoy pursuing my artistic interests – painting, , drawing, and writing – and there is certainly no shortage of inspiration all around me in our Cowichan “Warm Land.” Fred Oud: My parents emigrated from The Netherlands in 1951 along with six children. I am the youngest and have lived in both Duncan and North Cowichan all my life. I have been a union leader, a human resources manager, and most recently the president of the Cowichan Exhibition. Although retired from full-time work, I still run a small consulting 27

firm, which helps keep my mind active. I have over the years taken a keener interest in the workings of my community and am an active volunteer. Those who know me can attest to my strong passion for things that are important to me. The Citizens’ Assembly is a way to volunteer for my community and hopefully make it more successful and livable. Marilyn Palmer: I live on a lovely little heritage farm, overlooking Quamichan Lake, which we’ve named “La Ferme des Rêves” (the Farm of Dreams). I’ve been a big-city architect for many years and am now a flower farmer and volunteer president of the neighbourhood association. I volunteered to be part of the Citizens’ Assembly because I’m deeply interested in the process and its outcomes, and I see my participation as a way to contribue to my community. Lance Reese: I have lived in the Cowichan Valley area for thirty years and moved from Crofton to Duncan four years ago. Before my retirement, I worked at the pulp mill as a pipefitter and was an active member of the PPWC union executive for over twenty years. I live with my wife of twenty-one years, and I am serving as president of our condo Council and an unpaid handyman. I participated in the Citizens’ Assembly because I like to learn, and I believe those of us who can give back to their communities should. Don Reynierse: I’ve lived in Crofton since June 2016, having journeyed from Prince Rupert, Prince George, Vancouver, and originally Calgary. I have lived many different lives, starting work as a rural and regional land use planner, moving into real estate development and property management, federal land management, and acquisitions. Then I moved into the delivery of education and training opportunities, managing social development programming and finally, First Nations community and treaty administration. My education background covers statistics and regional and welfare economics, through to municipal and transport engineering. I am interested in auto mechanics, hunting, traveling, Spanish and Dutch. I volunteer on numerous committees and non-profit social service societies and boards. I have an interest in municipal governance, having started on this journey in the early 1970s by volunteering for Calgary City Council, and later worked on initiatives to improve and enrich the community of Grandview-Woodlands, in East Vancouver. Now I have the pleasure of being part of Cowichan, I wanted to know more about the valley and offer my impression of where I live, to this initiative on amalgamation. Kelly Ringer-Soikie: Originally from Ottawa, Ontario, my husband and I moved to beautiful Cowichan Valley nine years ago to pursue a relaxing and nourishing life for our family in a small town full of heritage and character. In the past I’ve worked as a registered RCA in both Ottawa and the valley. Currently, I’m a stay-at-home parent who advocates for our special-needs family, so that we can thrive as a family with my husband’s full support. I am autistic so my interests are fairly restricted and enriching. They include volunteering with my church and local public schools, and personal pursuits such as online gaming, hiking, camping, and sewing. I volunteered for the Citizen’s Assembly because I am passionate about participating in community gatherings that have a lasting impact locally. Being a member of the Assembly has been a rewarding and exhausting endeavour above and beyond my daily routine, and I am thankful for the experience. Ross Shilton: I moved to Duncan seven years ago, after living in Nanaimo for thirty years. I’m currently retired and spend most of my time helping others in the community with small acts of kindness, like taking them to the hospital, painting their house, or helping out at the church. I was motivated to volunteer with the Assembly because, having lived in seventeen different countries, I have seen what happens when cities take care of big issues but forget about the small problems. I wanted to make sure we discussed the problems of water management and Duncan’s relationship with the RCMP within the context of amalgamation. I think this Assembly has done a great job of looking forward to the future, and I was eager to be a part of that change. Barbara Swanson: I have lived in the Cowichan Valley for over forty years. I volunteer as treasurer for our local Chemainus food bank in addition to doing some relief work at our local antique store. I spent twenty-four years working in finance for the CVRD, so I have great interest in municipal procedures and the outcome of amalgamation of the City of Duncan and the Municipality of North Cowichan.

Final Report of the Duncan-North Cowichan Citizens’ Assembly

Sarah Thibault: Being part of a community is important – it creates a sense of belonging and unites us. Voicing our ideas and perspectives is a start in defining how we move forward and shape our community. I think we helped in a small way to accomplish this through the Citizens’ Assembly. Jackie Thompson: I have lived in the Cowichan Valley for twenty-two years. Before then, I was on the lower mainland for seventeen years. I love that in the Valley, you can go swimming anywhere you want for free - and it’s clean. I work in pharmacy, and when I have spare time, I walk my dog, who likes to play in water. As I’m on the borderline of the City of Duncan and Municipality of North Cowichan I experience the border first-hand, and is something interesting to be a part of. Rick Waddell: My wife and I moved to North Cowichan from Victoria twenty-two years ago. We live on a small farm near Mt. Prevost and raise mixed livestock. After twentyeight years with a crown corporation, I am presently semi-retired and work part-time with a mechanical engineering firm. I volunteered for the Citizens’ Assembly to get a better understanding of both municipal politics and the issue of amalgamation. Alec Wheeler: Born in Vancouver and raised in the small fishing village of Sointula, I have been a resident of the Cowichan Valley since 2013. My background in arts and culture development (both in the non-profit and local government sectors) have led me on adventures in Portugal, New York, Barbados, New Zealand, Australia, Vanuatu, and Jamaica. I am currently employed with MNP LLP, one of Canada’s leading accounting, tax, and business advisory firms, and am a volunteer board member with the Duncan-Cowichan Festival Society. As a member of the Citizens’ Assembly, I have gained a deeper understanding of the function of local government, and I am thankful for the opportunity to actively participate in the growth and development of our community. Gus Williams: I was born in Victoria and raised in Nanaimo, but I have lived most of my life in Duncan. My mother was a member of the Cowichan Tribe in Duncan, and my father was from the Songhees Nation in Victoria. Before retiring, I worked as a cook all over the country and as part of the Canadian and American navies. I have held educational workshops on colonialism in many different countries, and I have been a very active member of my community. I have volunteered as president of the Intercultural Society, with the Canada Royal Youth Program, and Social Planning Cowichan. I volunteer currently on the hospital foundation and with the Cowichan food basket. I volunteered for the Citizens’ Assembly because, since they began talking about amalgamation ten years ago, I always thought it was an important discussion. I also wanted to bring a voice for the many tribes in the area that often aren’t represented in municipal governance discussions. Andrew Wilson: I am a Cascadian, flag-flying Vancouver Islander from the Cowichan Valley, living with my beautiful family in my hometown of Duncan. I volunteered for the Assembly because I was aware of the complexities and importance of local government: the Municipality of North Cowichan collects our property taxes, the CVRD gets a cut, and the City of Duncan sends a water bill to our Duncan, BC mailing address. This Assembly was a once-in-a-lifetime opportunity and a great complement to my current studies in urban and social sustainability at Vancouver Island University in Nanaimo. Anthony Wingham: I lived in Mesachie Lake my whole childhood and went to elementary, middle, and high school in Lake Cowichan. I played baseball and basketball in the community and have coached the high-school teams. I was in leadership programs as well as student Council president. I moved away after graduating in 2005 and have been back and forth from Vancouver to Duncan over the last ten years. I work in construction and design with my wife. I mostly work in tiling, and my wife in design and drafting. I have worked as a gas jockey in Lake Cowichan and at the local grocery store. I spend my free time with my beautiful wife and son. We explore the outdoors all over this beautiful island for hikes and camping. I am hoping to have a better impact on my community as I grow older. I volunteered for the Assembly because I wanted to have my voice heard on an issue that affected an area I grew up in. Jackie Wood: I grew up in Edmonton and lived in small communities before moving to the Cowichan Valley with my family sixteen years ago. I worked in the printing industry in 29

Edmonton for fifteen years and ran my own web development business in Duncan for several years before pursuing a career in real estate. I have been selling properties in the valley for almost ten years. My hobbies include hiking, cycling, kayaking, and living a healthy lifestyle. I enjoy being an active member of the community and appreciate the opportunity to participate in the Citizensâ&#x20AC;&#x2122; Assembly. I am eager to be involved in shaping the future of the area I live in. Three additional Assembly members were selected but were not able to complete the process due to illness or changing employment. These members are Michael Mulholland, Fiona Barr, and Vicki Easingwood. We thank them for their contributions.

Final Report of the Duncan-North Cowichan Citizensâ&#x20AC;&#x2122; Assembly

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Duncan / North Cowichan | Amalgamation Study | i

TABLE OF CONTENTS 1. Introduction ......................................................................... 1 Background ................................................................................ 1 Local Government Overview ...................................................... 2 Study Method and Report Overview .......................................... 7

2. Overview of Duncan and North Cowichan........................ 10 Duncan and North Cowichan at a Glance ................................ 10 Organizational Overview .......................................................... 12

3. Financial Overview ........................................................... 14 Property Taxation ..................................................................... 14 Revenues and Expenditures .................................................... 22 Capital Assets and Projects ..................................................... 26 Other Considerations ............................................................... 30

4. Municipal Administration and Service Impacts ................. 33 General Government................................................................ 34 Planning and Development Services ....................................... 43 Public Works and Engineering/Transportation Services .......... 47 Protective Services .................................................................. 54 Environmental Health ............................................................... 66 Parks and Recreation Services ................................................ 70

5. Financial Impacts.............................................................. 74 Potential Annual Impacts to an Amalgamated Municipality ...... 74 Potential One-Time Implementation Expenses ........................ 80 Overview of Adjusted General Municipal Tax Rates ................ 81 Potential Property Tax Impacts on Representative Properties . 82

6. Regional District Impacts .................................................. 93 Current Services ...................................................................... 93

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Key Amalgamation Considerations .......................................... 94 Discussion ................................................................................ 94

7. Key considerations ........................................................... 96 Community ............................................................................... 96 Governance ............................................................................. 97 Transition Process ................................................................. 100 Community Vision, Planning, and Development .................... 102 Social and Environmental Goals ............................................ 103 Impacts of Not Amalgamating ................................................ 105

References ............................................................................ 107 Appendix A – Citizens’ Assembly Questions ......................... 108 Appendix B – Current Organizational Charts ........................ 109 Appendix C – Long-Term Debt (as of 2016) ......................... 112

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7. KEY CONSIDERATIONS In addition to the technical impact analysis, there are numerous other key considerations associated with a potential amalgamation. This report chapter discusses the key considerations, organized around the following six themes: 1) community; 2) governance; 3) transition process; 4) community vision, planning and development; 5) social and environmental goals; and 6) the impacts of not amalgamating.

Community Municipality Name The name of a municipality carries significant weight for both residents and visitors and it can be a signifier of community identity. Should Duncan and North Cowichan amalgamate, a transparent and thoughtful process for determining the name should be initiated. This issue is likely to be of particular concern to Duncan residents with their smaller population and geographic size. Businesses already cope with confusion related to whether they are part of Duncan or North Cowichan. Amalgamation would provide more clarity for marketing purposes, though there would be a transition period until a new name “sticks.” Three relevant case studies exist for the naming process: 1. Lake Country: The municipality’s name was chosen with no reference to existing neighbourhood names. This approach allowed a new identity to be created and avoided the perception that one community was more important than another. 2. West Kelowna: In this case study, the municipality’s name was chosen through an opinion poll, rather than a binding referendum, leaving a number of residents unsatisfied. A key lesson is that the naming process should be transparent and intentional. 3. Abbotsford: In the amalgamation of Matsqui and Abbotsford, Abbotsford was the smaller community. It therefore came as a surprise when most residents chose Abbotsford as the name of the new amalgamated municipality. However, as Abbotsford had been the downtown for the area, residents in Matsqui had also come to identify with the name.

Community Identity Duncan and North Cowichan are described as a community of communities: Chemainus, Crofton, Maple Bay, Sahtlam, Quamichan Lake, Duncan, and Genoa Bay. Residents are understandably concerned about how a municipal restructure may impact their community’s identity. Ward systems are often cited as a way to protect unique neighbourhood identities

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However, municipalities of all sizes boast strong and unique neighbourhoods and active residents. Support for vibrant neighbourhoods can be buttressed through Council decisions that respect and promote neighbourhood identity, as well as citizen engagement and activism. The integrity of a community will also be strongly impacted by planning and development decisions. When Abbotsford amalgamated, the new Council chose to continue using historical neighbourhood names as a way of preserving and strengthening neighbourhood identity. Strong neighbourhoods benefit from local initiatives. A few examples of these initiatives are identified below: 1. Business Improvement Associations: Local businesses can organize and collectively invest in their streets, storefronts, and signage, among other neighbourhood aspects. 2. Neighbourhood Associations: Made up of local residents, neighbourhood association across Canada are working to build connections between neighbours and strengthen their communities. They may organize local events (such as fundraisers or concerts), arrange fundraisers, start community gardens or art projects, among many other initiatives. 3. Small Council Grants: In some municipalities, small grants can be provided to local groups for initiatives that strengthen community connections or help beautify public spaces, among many other goals. Both Duncan and North Cowichan already provide â&#x20AC;&#x2DC;grants-in-aidâ&#x20AC;&#x2122; to a number of community organizations.

Governance Council Size Section 118 of Community Charter outlines council sizes for municipalities. For a city or district with a population less than 50,000, the council size is set at one mayor and six councillors. However, the number of councillors can vary from this size through either the letters patent by which the municipality is created or through a bylaw passed by council. If council size is deemed to be an issue, a question about this issue could potentially be included on a referendum on amalgamation. Amalgamation would result in changes to local political representation. Duncan and North Cowichan currently have the same Council size for dramatically different populations. The ratio between Councillors and residents would increase dramatically following amalgamation. However, this change does not necessarily translate into a reduction in how well local interests are represented, particularly if a shared vision benefits the greater community.

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In the case of Abbotsford, the Province required the first Council of the newly amalgamated municipality to be larger than what was normal at the time. This was to ensure that elections did not push out representation from the smaller community of Abbotsford. However, the first post-amalgamation election resulted in fairly balanced representation of Councillors from different neighbourhoods. After several years, the Council size decreased. Based on past experiences, the Province will likely look for local input in setting Council size.

Election Process Concern over neighbourhood identity raised the issue of local representation in an amalgamated community. One suggestion favoured introducing a ward system to local government elections, as opposed to the present at-large election system. At-large Councillors: In this system, elected Councillors represent the entire municipality. During elections, voters select their preferred candidate for mayor and their preferred candidates for Council (as many votes as Councillor seats can be placed). Because voters can vote for multiple Councillors, they may be able to choose Councillors who represent a range of their interests. The Council itself is more likely to represent the entire community as opposed to specific geographic areas. However, this system does not provide neighbourhood residents with a specific Councillor who acts as their point of contact. Residents can approach any/all Councillors to discuss issues of interest or concern. Ward Councillors: In this system, elected Councillors represent specific wards. During elections, voters select their preferred candidate for mayor and their preferred candidate for their ward. In some municipalities, there may be several Councillors who are elected to represent the community at-large. This system allows for representation for specific geographic areas (wards) and offers residents a direct contact in Council for their neighbourhood. However, this system encourages Councillors to focus on localized issues at the expense of the general community and may create competition between wards for resource allocation and development projects. Members of the Citizensâ&#x20AC;&#x2122; Assembly asked for information on the ward system as a way to protect Duncan and North Cowichanâ&#x20AC;&#x2122;s five distinct community identities: Duncan, South End, Maple Bay, Crofton, and Chemainus. Each of these areas could be made into a ward and would have direct representation on Council. The ward system is extremely unusual in British Columbia, though common in other provinces. Lake Country, which incorporated in 1995, is currently the only municipality in BC with a ward system (it is actually a combination of ward and at-large councillors). This system was chosen at the time of incorporation to protect the interests of each of the distinct neighbourhoods of Winfield, Okanagan Centre, Carrâ&#x20AC;&#x2122;s Landing, and Oyama. However, the

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ward system has created a number of challenges for the municipality that are relevant to Duncan and North Cowichan:9 

Ward boundaries were based on geographic size, not population, and the ratio of residents for each Councillor is uneven.

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Councillors are generally well-known in their neighbourhood and are frequently elected by acclamation. Candidate participation is low.

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Voter turnout is low (although this may not be directly related to the ward system).

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Neighbourhood distinction has become less important over time as the community has grown and changed.

While a ward system offers a direct political representative for each neighbourhood, it does not automatically result in the preservation of community identity or a better voice at Council. It can also be costly and difficult to implement in a way that provides meaningful impacts over the at-large system. The approach to these issues is dependent on the elected officials and the local political culture. The ward system may in some cases encourage greater competition between neighbourhoods for capital projects and resources. In the at-large system, each Councillor represents the entire community. This may create greater incentives for Council to consider balancing the interests of each neighbourhood and the community as a whole.

Provincial‐Local Government Relations The question was raised as to whether or not an amalgamated community would have greater standing with the provincial government, including in terms of receiving funding, advocating for the area, or influencing regulations. The community as a whole (Duncan and North Cowichan) may find it easier to coordinate with the Province as an amalgamated community (one process instead of two). However, it is unlikely that amalgamation would result in a significant increase in standing as the increase in community size is relatively small. An amalgamated community could benefit from a unified voice at important forums such as the Union of BC Municipalities (UBCM). Conversely, in a UBCM context, a unified municipality would have only one opportunity to meet with a Minister on a topic of concern. Currently, if Duncan and North Cowichan both share an interest in a topic of concern, it is possible that they can engage with the Province either individually (i.e. twice) or jointly (i.e. as a unified voice).

9 District of Lake Country. Neighbourhood Constituency Wards: Information and Comments. Lake Country, BC. N.D. https://lakecountry.civicweb.net/document/797/Ward%20Information%20Sheet.pdf?handle=1C7AE3936A964F8EBA9F1B F38D541B05 (March, 2017).

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Presently, Duncan and North Cowichan apply for conditional provincial grants separately. As an amalgamated community, they may have fewer opportunities to apply for funding (i.e. one application instead of two) and Duncan would no longer receive the Small Communities Grant. However, for any conditional grants, total funding should be similar to current levels.

Size of Municipality The merits or challenges related to the size of an amalgamated community are not the same in every case. Economies of scale are often cited as a reason to amalgamate; however, this is not necessarily the case in all communities, particularly if service levels vary between neighbourhoods (e.g. rural versus urban) or if amalgamation results in increased salary or contract costs. A larger municipality may increase the taxpayer’s expected level of service across the community, thereby potentially increasing costs. There are a number of areas where a unified, larger municipality may serve the residents of Duncan and North Cowichan better. Together, a single municipality could offer a unified economic voice for the area and avoid competing with their next-door neighbour’s interests. A unified municipality may also be seen as playing a larger, more cohesive role on regional issues within the CVRD (e.g. regional planning, transportation, emergency management).

Transition Process Provincial Transition Assistance The Local Government Grants Act (S.4) allows the provincial government to offer conditional grants to municipalities for “reviewing, studying, planning, organizing, or implementing the establishment or other reorganization of local government, including any change in the functions, structures, boundaries, or classifications of one or more municipalities and regional districts.” Two types of grants may apply if a referendum occurs and Duncan and North Cowichan electors both vote in favour of amalgamation: 

Municipal Restructure Assistance Grant: This grant provides transitional assistance for communities in favour of a municipal restructure, including help with police costs. The grant amount is generally calculated on a per capita basis.



Restructure Implementation Grant: This grant is provided to support the implementation of a restructure, such as interim administration and transition support.

While there have been a number of municipal incorporations and boundary restructures in BC in recent years, amalgamations are rare and examples of comparable transition

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assistance funding are unavailable. Nevertheless, it is expected that a per capita municipal restructure assistance grant could be available along with a restructure implementation grant.

Staffing of an Amalgamated Municipality Amalgamation raises concerns related to staffing efficiencies. Some communities undergoing amalgamation have indeed experienced large changes to staffing structure. One of the findings of this study is that there are few opportunities for significant efficiencies based on current staffing levels. Both Duncan and North Cowichan operate fairly lean staff complements throughout their departments. It is possible that staffing complements would be combined with additional levels of management in some departments. Chapter 4 provides a review of potential amalgamation scenarios.

Labour Relations One of the potential costly aspects of a municipal restructure is the renegotiation of union and other employment contracts. When wages differ for similar positions, the higher wage will often be used to set the benchmark in the new municipality. This was found to be the case in amalgamations forced by provincial governments.10

Communications As with all major institutional changes, municipal restructure can be complicated and confusing, particularly during the transition period. Residents and visitors may be unsure of what to call the new municipality, who to ask about services, and what rules and regulations apply. Recognizing the potential for the transition period to be challenging, previous experience shows that a strong and consistent communications strategy is vital to smoothing out the process. A clear communications approach is needed regardless of whether the Citizensâ&#x20AC;&#x2122; Assembly and Council choose to recommend a referendum on amalgamation. Even in the case that there is no referendum on amalgamation, documentation and messaging on why the decision was made will support community understanding of the issues, and ensure that future conversations on amalgamation are fruitful and learn from lessons of the past.

10 Bish, Robert and Filipowicz, Josef. Governing Greater Victoria: The Role of Elected Officials and Shared Services. Fraser Institute. 2016.

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Community Vision, Planning, and Development Council Decisions While we can speculate on the vision, direction, and priorities of a new amalgamated community, ultimately, these are decisions to be made by a future Council, influenced by the concerns of the day, economic climate, trends, and competing priorities. This study is about assessing the impacts of the act of amalgamation. Service levels would be decided by Council.

Land Use Planning and Development With amalgamation, the two sets of Official Community Plans, Zoning Bylaws, and other regulatory and policy documents would be combined over a transition period. The goal would be to align documents to be consistent in the application of guidelines and regulations. The direction of future development will be provided by Council with input from staff. Through amalgamation, future land use planning would consider the area as a whole and there would be strengthened coordination between what is now Duncan and North Cowichan. However, it is possible for two separate municipalities to embark on land use planning together, particularly when they work closely already and there are numerous mutual benefits for guiding planning and development as a region rather than as separate municipalities. For example, the City of Langford and the City of Colwood developed an Official Community Plan jointly. This allowed the communities to approach planning and sustainability in an integrated fashion. We identified three main benefits of amalgamating that relate to land use planning and development: 1. Coordinated planning effort: Long-term planning and zoning would be integrated and an amalgamated municipality could direct development in a way that benefits the whole area. Separate communities face many barriers to such an approach, including competing interests and accountability to a different set of residents. 2. Harmonized rates and incentives: Differences in rates such as business licences and Development Cost Charges (DCCs), as well as incentives such as DCC reductions, can create competition for development with neighbouring communities. Together, the area could share in the benefits of new businesses and growth. 3. Harmonized OCP, Zoning Bylaw, and other development bylaws (e.g. subdivision, building, signage): Harmonized policies and regulations would provide clarity for property owners and businesses. Due to the highly-connected nature of the two communities, this harmonization may benefit both over time. During the study process, members of the business community expressed frustration at conflicting regulations in Duncan and North Cowichan.

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Economic Development Though Duncan and North Cowichan cooperate on a great number of community goals and issues, amalgamation would offer a greater opportunity for a community-wide approach to economic development. One example of this is the downtown. Presently, Duncan and South End, though neighbours, do not necessarily have a common vision as a cohesive community core. As a single community, there may be incentives to consider these two areas as two neighbourhoods in a broader community centre, and invest in them as the core of the community. This is, as with other community goals, dependent on vision and direction provided by Council. A unified community may find it easier to invest in its downtown. However, it may also feel pressure to direct economic opportunities to peripheral areas. An amalgamated municipality would have the benefit of a single tax base. The result would be less competition for investment and development. A more coordinated approach may be easier to implement than through two separate municipalities.

Harmonization of Bylaws and Regulations Uncoordinated bylaws and regulations between Duncan and North Cowichan are a common complaint by the business community, although it is noted that there are existing areas of cooperation, such as joint business licencing. It is possible for the municipalities to pursue greater alignment of bylaws and regulations as separate municipalities if the political will is there, as well as the time and funding to carry out changes. One of the greatest challenges of implementing amalgamation will be harmonizing the two communities’ bylaws and regulations. The Zoning Bylaw of the City of Abbotsford was recently finally overhauled to deal with ‘post-amalgamation’ issues two decades after amalgamation. Harmonization of bylaws is a process that will take time but, once completed, will offer the greater community a streamlined approach to bylaws and regulations. Homeowners and businesses, particularly those who work or own property in both communities, will benefit from a consolidated approach to regulation and planning.

Social and Environmental Goals Environment and Climate Change The Citizens’ Assembly raised questions about the capacity of an amalgamated community to offer benefits related to environmental protection, climate change mitigation and adaptation, and local alternative energy sources. Many environmental regulations are set by the Province of British Columbia. Municipalities are required to follow these regulations regardless of size.

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Municipalities can take on any number of additional environmental initiatives. For example, a municipality at risk of sea level rise may invest in programs that protect against coastal erosion, or pilot a clean energy project to attract energy investment. As separate communities, Duncan and North Cowichan are able to pursue such projects independently or in collaboration. In 2013, North Cowichan Council adopted the Climate Action and Energy Plan which seeks to reduce energy consumption and emissions in the community. Both municipalities are currently aiming to be carbon neutral. Municipalities can also enact various types of bylaws (e.g. floodplain bylaws) and development permit bylaws for environmental protection purposes. For example, North Cowichan has development permit requirements for marine waterfront development, protection of environmentally sensitive areas, hazard lands, and farmland protection. As well, Duncan has development permit requirements for protection of the natural environment and hazard lands. Amalgamation offers a number of potential benefits to environmental goals, should Council prioritize these goals. Note, that it is also possible for a new Council to take a different direction. The benefits offered are based on the ability of the communities to plan and invest as one: 1. Larger combined budget: Combining the present budget may offer opportunities to invest in new initiatives or pilot projects. 2. Improved coordination, particularly for land-based projects: Projects that benefit from wide application may be easier to implement in a combined community. There would be less chance that an initiative in one area conflicts with another area. 3. Shared benefits and risks: North Cowichan has significantly more land than Duncan, including municipally-owned land. While North Cowichan could use this land for initiatives such as alternative energy, as a separate community, it would bear all the risks and capture all the benefits. Together, there may be a greater appetite for taking investment risks and benefits could be shared among a larger pool of residents. There may also be differences in opportunity depending on the area that are easier to take advantage of through a coordinated approach. 4. Reduced competition: As separate communities, there is greater potential for competition. For example, one municipality may introduce an environmental initiative that adds costs to business owners; the neighbouring municipality could potentially use this as a competitive advantage in attracting business.

Social Planning Duncan and North Cowichan face social and economic challenges together, as a part of a region, and separately, as unique communities. Homelessness, addiction, and crime may be more concentrated in some areas than others, but the issues driving these are much broader than municipal borders. In 2014, the CVRD completed a regional affordable housing needs

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assessment, which identified a need for permanent affordable housing in the Duncan/North Cowichan area. The Municipality of North Cowichan has since partnered with the Community Land Trust Foundation of BC to develop plans for non-market affordable housing units on two municipally-owned properties. Though direction on social planning issues will be based on Council direction and resource allocation, an amalgamated community may offer a strengthened opportunity to respond and serve community needs better. Similar to other considerations, a larger municipality may have the budget and staff to support initiatives above and beyond basic service provision. Currently, staff involved in social and housing issues have multiple other roles (e.g. land use planning). In the City of Duncan in particular, it would be difficult to provide the staff resources for social/housing issues, simply due to the size of the municipality and the budget limitations associated with the more limited municipal size and assessment base. While amalgamation itself may not have a direct impact on social and economic challenges in the area, there are some important considerations for how a change in governance may be perceived: 

Property taxes: Residents may be understandably concerned about the potential for their property taxes to increase with an amalgamation. Based on our analysis, amalgamation would likely lead to a small decrease in municipal taxes for Duncan residents and a minor increase in taxes for North Cowichan residents.

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User fees: Analysis of user fees is beyond the scope of this study. However, based on the current provision of services such as water, sewer, and recreation, it is unlikely that most user fees would change as a direct result of amalgamation, with the exception of Duncan water (since rates vary inside and outside the current City boundary) and waste collection/recycling.

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Social programs and affordable housing: In this study, the financial analysis is based on a continuation of existing service levels. Many social programs and affordable housing related issues are senior government responsibilities. However, in the past number of decades, many local governments have become increasingly active in this arena. Generally, larger municipalities have greater resources to employ social planners and address affordable housing issues through a variety of tools, such as support for non-market or below-market housing through an affordable housing reserve fund and/or development incentives.

Impacts of Not Amalgamating Amalgamation has long been discussed in Duncan and North Cowichan. Some residents may ask, “what might happen if we don’t amalgamate?” While understandable, the answer to this question can only be speculative in nature, and it could depend on factors such as Duncan’s population size (which affects policing costs), pressures on various existing

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services, and the level of collaboration between neighbouring jurisdictions. Whether the municipalities remain separate or amalgamate, Council decisions will play a critical role in determining the future vision and direction of a community. If the municipalities choose not to amalgamate, there are two main paths: 1) Status quo: Duncan and North Cowichan continue to remain separate and local services remain as they are (with the current level of cooperation and service integration). 2) Remain separate but increase collaboration: Duncan and North Cowichan can pursue additional opportunities of alignment and cooperation. Just a few examples of such opportunities are a. developing a joint Official Community Plan; b. shared planning of fire protection and infrastructure services; or c. harmonizing bylaws, including regulatory requirements of development.