What is a Municipal Services Corporation (MSC)?
A MSC is a corporation whose shares are owned by a municipality, or a municipality and one or more other public-sector entities. A MSC can only provide a system, service or thing that the municipality could provide. MSCs are required to receive permission from a municipality to operate in its geographic boundaries.
What gives the Township the authority to create a MSC?
The Township can create a MSC under the provisions of the Municipal Act, section 203 and Ontario Regulation 599/06 Municipal Services Corporations.
What control will Council have over the MSC and their decisions?
The Township would retain complete and full ownership of the corporation.
In addition to being the sole shareholder of the MSC, 2 members of Council will be voting members of the MSC's Board and as such will be active participants in the decision-making process.
What is the required process for creating a MSC?
Ontario Regulation 599/06 requires municipalities to complete the following steps before creating an MSC:
- Develop a business case study for the proposed MSC
- Consult with the community about the plan to create the proposed MSC
- Adopt and maintain policies with respect to the transfer of assets
What services would the MSC be responsible for?
The MSC will be responsible for the same services currently provided by Environmental Services Department, these include:
- All municipal water systems currently operated by the Township,
- Existing municipal communal tile bed systems operated by the Township,
- Maintenance of urban stormwater management ponds,
- Maintenance of the Township's street lighting network,
- Future infrastructure related to water and wastewater, urban stormwater and street lighting
Will this mean the Township will take over the Skyline Wastewater Treatment Plant?
The Township recognizes this is a concern for some residents. The future ownership of the Skyline Wastewater Treatment Plant is not impacted by the decisions related to a MSC.
The Horseshoe Craighurst Master Servicing Study currently underway will recommend a solution for wastewater provision in the settlement areas. The Township is not in a position to speculate on the outcome of this study nor the future decisions of the Ministry of the Environment and Climate Change as related to municipal ownership of the existing private plant.
Why are you proposing this? And why now?
The Township is growing and our assets are aging. With these changes will come corresponding demands for increased environmental services. A MSC provides:
- Professional governance and management through skills-based boards of directors whose terms extend beyond the four-year term of elected officials
- Increased debt financing flexibility by allowing the Township to separate environmental services investments from other infrastructure investments
- Provides a vehicle for shared-service arrangements with other municipalities
- Full cost recovery for water, wastewater and communal tile services, street lighting and stormwater management facilities
- Ability to continue delivering on the Environmental Services principles of safety, compliance, accountability, sustainability and continuous improvement
Does this mean the Township will be increasing its debt load?
It is premature to speculate on future borrowing decisions, however, the need for capital expenditures to maintain current infrastructure related to environmental services will continue to increase.
How long has the Township been researching this concept?
Staff identified the need to explore this option approximately a year and a half ago. Given the process required by O Reg. 599/06, significant research and time was required to ensure this was a model that would work and benefit the entire municipality.
Why didn’t you do this before now?
Municipal Service Corporations are still a relatively new service model, the Township wanted to complete its due diligence to ensure this was the right model for the municipality at this time. This research was thorough and took time to complete.
What happens if Council does not approve the creation of the MSC?
The Township will continue to deliver the same high quality service they have always provided. Without the MSC in place, future Councils will face difficult decisions regarding capital priorities and expenditures given the municipality's limited access to funds.
Are there other municipalities who have done this?
Yes, other municipalities have created Municipal Service Corporations to deliver a range of services including land development; water and wastewater; electricity etc. While the areas of service and staffing models are different the City of Guelph, City of North Bay, Town of Welland, Town of Innisfil and the Town of Midland are examples.
