LOCAL GOVERNMENT AND FIRST NATION SERVICING AGREEMENTS

1
LOCAL GOVERNMENT AND FIRST NATIONSERVICING
AGREEMENTS

• LOWER MAINLAND TREATY ADVISORY COMMITTEE
• January 30, 2008

LIDSTONE, YOUNG, ANDERSON BARRISTERS AND
SOLICITORS
2
Introduction

• Servicing Agreement
• Prior to First Nation tax law enactment in
  contemplation of tax notice
• After tax law enactment
• Special agreements for particular projects

3
Indian Act

• First Nations Exempt from tax
• Applies to First Nations Individual on any
  Reserve (Mission case)
• Non-First Nations on Reserve can be taxed
  (Tin-Wis Resort case)

4
Indian Self-Government Enabling Act

• First Nation gives notice
• Minister acknowledges receipt
• Minister delivers copy to LG
• Minister requests LG to negotiate Servicing
  Agreement (s.10)
• Prior to or after Band tax law enactment, LG may
  contract to provide services (s.37) 

5
Local Government Concerns

• Incremental servicing costs for LG, but LG taxes
  and DCCs no longer apply
• Revenue received does not match revenue foregone
  or actual cost
• Elimination of LG taxes and DCCs creates
  uncertainty about future servicing obligations

6
Local Government Concerns contd

• LG statute requires compliance with budget
  process, yet Reserve development unpredictable
• Lost opportunity to generate net taxation revenue
• Development on Reserve
• LG no full cost recovery after transfer of tax
  room

7
Local Government Concerns contd

• Service agreements only moderate the tax/DCC loss
• net fiscal impact uneven
• Servicing agreement LG not fully compensate
  capital revenue losses
• LG may deny or cut off services, difficult to
  practice in reality

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First Nations Concerns

• Do not want to pay for services before
  development
• Want to retain some capital charges for First
  Nation infrastructure improvement
• Want a lower level of service for lower
  contributions
• Want degree of self-reliance

9
Agreement Issues

• Term
• Electoral approval capital liability more than 5
  years
• Dispute Resolution
• Commercial model
• Resolve disputes, not make new agreement

10
Agreement Issues contd

• Permitted uses
• Issues NIMBY, NIMTOF
• Paramountcy subject to agreement
• Commercial or industrial provisions
• Infrastructure planning
• Consultation
• Notice of new infrastructure requirements

11
Agreement Issues contd

• New development
• Definition
• No obligation to service if
• Inadequate capacity
• Not feasible (engineering)
• Use not permitted

12
Agreement Issues contd.

• New development options
• Accommodate in agreement
• Require new agreement for new development
• New development planning
• Consultation generally

13
Agreement Issues contd.

• Bulk meters
• LG install - Sole cost of FN or user
• Engineering standards
• MMS
• Satisfaction of Municipal Engineer
• Reference Servicing Bylaw
• FN bylaw - require users on reserve to comply

14
Agreement Issues contd

• Payment
• Provision for payment by First Nations
• RD Charges
• For LG inspections, maintenance, repair or
  replacement of private works
• Security for payment by lessee
• Assignment of rents
• Letter of credit
• Penalties

15
Agreement Issues contd

• Service interruption
• Burns Lake, Salmon Arm, Delta cases
• Operating fees
• Connection
• Service
• User
• Operating
• Capital cost charges

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Agreement Issues contd

• Access and Right of Way
• By Local Government
• By First Nations
• Repair and Maintenance
• By Local Government
• By First Nations

17
Capital Costs

• New development on Reserve imposes capital burden
  on LG
• Developer on non-Reserve land contributes
• Same should apply to development on Reserve
• Assistance to business is invalid (s. 25(1) and
  s. 26 CC)

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Capital Costs contd

• Subsidization is assistance, therefore, LG
  subsidization infrastructure for Reserve may be
  assistance
• Highlighted by designation of work as DCC Works
• Retail stores constitute commercial activities,
  therefore, illegal assistance

19
Capital Costs contd

• Examples of off-site infrastructure to serve new
  development on Reserve
• Widen access road
• Increase capacity of servicing
• Loop water or sewer line
• Upgrade pumps or other ancillary works
• Build up Reserve fund

20
Capital Costs contd

• Infrastructure replacement
• Replacement Reserve fund
• End of useful life
• Lifecycle planning
• Amendment process

21
Capital Costs contd

• Capital cost equivalents
• Set up same as DCCs (or)
• Establish regime re replacement, additional
  capacity, etc.
• Off-site servicing
• Amenity provision or payment

22
Community Benefits

• Public amenity objectives
• process for securing amenities or other community
  benefits
• Surrey, Burnaby, Richmond, Langley (Township),
  New Westminster, North Vancouver (LG), Whistler,
  Vancouver, Nanaimo, Abbotsford and Chilliwack
• Identify programs, amenities and benefits
• Precondition for servicing new development

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Community Benefits contd

• Value of amenity or benefit based on scale and
  scope of project
• Zoning not apply on Reserves
• Done by contract
• Service agreements provide for amenities or
  benefits
• Condition of new development