New provincial rules will prohibit BMS from providing dividends to member municipalities
FOR IMMEDIATE RELEASE – JULY 29, 2020
Ryley, AB: Beaver Municipal Solutions (BMS) will no longer be allowed to operate for a profit or provide dividends to its member municipalities as a result of new rules that go into force on September 1, 2020. The legislative changes to how regional services commissions are allowed to operate has placed a newfound urgency on municipal discussions about whether to transition BMS to a municipally controlled corporation under the operating name of Claystone Waste.
The province-wide changes to regional services commissions (RSC) were part of the government’s Red Tape Reduction Implementation Act that became law on July 23rd, 2020. In anticipation of the legislative changes, the Deputy Minister of Municipal Affairs Paul Wynnyk wrote municipal Chief Administrative Officers and managers of regional services commissions on June 15th to advise that the legislation would require commissions like BMS to operate on a non-profit basis.
“This legislation means RSCs will continue to be prohibited from operating with the intention of making a profit or be able to distribute surplus funds to its members. If such factors exist within a regional service delivery model, other corporate structures, such as municipally controlled corporations, may be more appropriate,” informed Mr. Wynnyk on behalf of Alberta Municipal Affairs.
Since 2014 Beaver Municipal Solutions, with approval from the provincial government, has provided over $14.3 million in dividends to its member municipalities. Under the new rules which take effect September 1st, BMS – also known as the Beaver Regional Waste Services Commission – will no longer be permitted to disperse dividends to Beaver County, the Towns of Viking and Tofield, and the Villages of Ryley and Holden.
For several years, BMS, municipal administrations, and member councils have been studying the need to transition from a regional services commission to a municipally controlled corporation. Unlike an RSC, a municipally controlled corporation (MCC) is a for-profit entity that is owned by a municipality or group of municipalities that is allowed to provide dividends back to the shareholder municipalities.
Public hearings on whether to establish Claystone Waste have occurred in each BMS member municipality throughout June and July. The majority of concerns from residents have not centred on the proposed organizational structure or nature of the MCC but have focused on ongoing operational issues. BMS is currently completing a ‘What We Heard’ report to respond to items raised by residents at the public hearings.
In response to the legislative changes impacting BMS, member municipality councils are now looking to schedule resolution dates to formally approve or disapprove the founding of Claystone Waste prior to September 1st.
“Through the MCC Steering Committee we are looking to expedite the resolution votes,” says BMS General Manager Pierre Breau. “This is being done to ensure we can eliminate legal risk, continue to provide revenues back to municipalities to fund local priorities and protect ratepayers in the region.”
BMS will provide further information on the timing of resolution votes for the Claystone MCC once finalized.
Media contact for further information:
Program and Communication Supervisor
ABOUT THE CLAYSTONE WASTE PROPOSAL
Beaver Municipal Solutions and its member municipalities have been studying the need to transition from a regional services commission to a new corporate structure of a municipally-controlled corporation. This corporate reorganization is meant to provide increased community benefit to residents, protect and promote municipal member sustainability, and enable future waste management operations to be conducted in a more flexible manner. Along with the transition to a different corporate structure, Beaver Municipal Solutions is proposing to rebrand as Claystone Waste Ltd.
While the name and corporate structure of Beaver Municipal Solutions may change under the Claystone Waste proposal, the mandate to provide waste management services to the residents and businesses of the Beaver region and to provide tangible benefits back to shareholding municipalities would not. The most impactful change under the Claystone Waste proposal is the MCC would be enabled to pursue revenue-generating contracts to the benefit of municipalities and ratepayers in the region.
Many residents will likely not notice too many practical changes as a result of a transition to a municipally controlled corporation outside of the re-branding to Claystone Waste Ltd. Residents who live closer to the landfill site may notice positive changes as landfill management continue to work to improve areas of operational concern including bird and gull control, mud control, and traffic safety among other initiatives.
With increased revenue, there is also the potential to increase programs. Additionally, municipalities and their ratepayers will benefit from continued surplus distributions or dividends.
There will not be layoffs or any elimination of positions as a result of the transition to Claystone Waste. Claystone Waste would strive to continue to be one of Alberta’s Top 75 Employers. The proposal to transition Beaver Municipal Solutions to Claystone Waste would also not affect existing employment conditions.
Learn more about the Claystone Waste proposal at: https://beavermunicipal.com/about-us/proposed-transition-to-a-municipally-controlled-corp/claystone-the-proposal/
ABOUT LEGAL CHANGES TO REGIONAL SERVICES COMMISSIONS
Part 15.1 of the Municipal Government Act (MGA) concerning regional services commissions was amended through changes in Bill 22: The Red Tape Reduction Implementation Act 2020.
For the past several years, Beaver Municipal Solutions has received approval from the Minister of Municipal Affairs to distribute operational surpluses to its member municipalities of Beaver County, the Town of Tofield, Town of Viking. Village of Holden, and Village of Ryley. This disbursement of commission surplus was authorized via the Minister’s powers described in s.8 of the Beaver Regional Waste Management Services Commission Regulation (AR 75/92).
Bill 22 amended section s.602.15 to Part 15 of the MGA and explicitly prohibits surplus distribution of regional services commission profits, and repeals of all existing commission regulations, which means surplus distribution is impossible as the Minister no longer has the ability to approve such a disbursement.
The legislation takes effect September 1st, 2020.