One of the most important external relationships you can build as a municipality is with your municipal neighbours. This is particularly critical when it comes to municipal services that are provided jointly or accessed by residents of another municipality. Progress in intermunicipal partnerships is made through common interests, understanding, and trust.

This section of the toolkit highlights the importance of intermunicipal relationships and offers recommendations on:

Building Intermunicipal Relationships

One of the best places to start with intermunicipal cooperation is for the CAO of one municipality to build a relationship with his or her neighbouring CAOs. While this does not mean that you need to be friends with every other CAO, it is important to develop a positive working relationship that understands and respects the role each CAO plays in representing his or her Council.

A good place to start is creating an informal, recurring meeting between the chief administrators, such as a monthly breakfast or lunch meeting. Even if there is no agenda, meeting regularly will keep the lines of communication open and help solidify rapport between the CAOs and, in turn, between the municipalities. Ongoing dialogue with your neighbours also helps build political acumen as it keeps you in the know about information your colleagues have that you may not have access to. What have your colleagues in municipal administration heard about legislative or administrative changes? Have there been rumours regarding your municipality that should be brought to your attention? Are residents from another municipality complaining about services in your jurisdiction? It is information like this that becomes a natural by-product of ongoing communication between administrations.

It is also a good idea to have the Councils from each municipality with a co-terminus boundary meet informally once or twice a year, especially if there is a high degree of collaboration between your municipalities. Building relationships between Councils provides a forum for creating understanding between jurisdictions and discussing common issues. Even in situations where elected officials from different communities are on opposing sides or dislike each other, providing opportunities for connection allows respectful discussion to take place so that Councils can jointly advance mutually-beneficial initiatives. When municipalities can work together to meet the needs of residents and ratepayers, both Administration and Council are seen in a positive light, and providing forums to achieve this outcome demonstrates political acuity on the part of the CAO and Senior Management.


Tip: CAOs who build relationships with other CAOs on a regional, provincial and national basis, are CAOs who are able to seek solutions and enlist feedback from others who have experienced similar situations. This adds to your toolbox, providing alternatives for your own Council to consider, and enabling you to be a more effective CAO. Sign up for the CAMA Mentorship Forum to connect with CAOs across Canada.


Best Practice: A senior administrator with a high degree of political acuity will stay abreast of the strategic planning efforts, annual reports, Council minutes, and initiatives of neighbouring municipalities, specifically on those issues that may affect their municipality or residents, directly.

Collaborating on Municipal Services

Municipal Service Negotiations
One of the key areas where municipalities work together is on the provision of municipal services such as water, wastewater, waste, transportation, recreation, emergency services and more. While most of the time discussions and negotiations regarding these services areas are cordial, occasionally they veer into becoming disputes. Establishing strong relationships can help avoid negative dialogues; however, when this is not possible, it is up to the CAO to come up with a successful strategy on how the conversation can move forward.

Recreation services are one of the main points of contention between neighbouring municipalities, particularly when an urban municipality believes that the rural municipality surrounding it is not contributing its fair share. Often, these discussions lead to negotiations, and if an understanding/agreement cannot be reached between Administration and Council, they can even progress to costly mediation or arbitration. Whether it is the use of a recreation facility or another service, it is the responsibility of the CAOs to demonstrate that a fair and reasonable contribution either is or is not being provided for the cost or provision of the service.

Occasionally, a Council decides it wishes to undertake a project they feel provides services to residents of other municipalities, in addition to their own. The decision to proceed often occurs without Council engaging in dialogue with their municipal neighbours, only to be followed by the municipality going to their neighbours and asking for a contribution toward the capital and operating expenses. This request can be met with limited support as the adjacent municipality was not involved in the original decision-making process.

We have all heard comments from councillors that the surrounding municipalities are not paying their fair share. One way to gain additional support is by engaging your municipal neighbours in funding discussions before reaching a decision. If these deliberations do not result in a favourable outcome, then a decision must be made by the municipality that wants the new service on whether to proceed.

How can a CAO deal with these kinds of situations? While there are any number of different options, here are a few worth considering:

Develop a Funding Formula: Try to get your neighbouring CAO’s to agree to take forward a funding formula to their own Council that is seen administratively as being fair and reasonable. While it is preferable to do this before your Council has made its final decision, nothing prevents you from taking this approach after the decision was made.

Depoliticize the issue: Anytime administrations can depoliticize an issue, Council usually likes it. If the residents of the municipality support making a particular contribution for capital or operational costs to an adjacent municipality, it makes Council’s decision very simple. A plebiscite can be held, a citizen committee can be formed, a survey can be sent out, or public meetings can be held to gauge public support.

Suggest Differential Fee: In the absence of reaching an agreed upon contribution amount, introduce the concept of a differential fee for residents and non-residents. However, be aware that a two-price system may act as a deterrent for non-residents to use your facility and result in less operating revenue.

Deny Access: A very hard nose approach would be not to allow non-residents access to the facility as they (or at least their municipality) did not contribute to the capital or operating costs. To do this, you must be confident that the number of users from your municipality are sufficient to generate the projected revenues in the original or modified business plan for the facility.

A best practice when approaching intermunicipal negotiations is to have the CAO meet with the other CAO(s) first to discuss the issue and possible solutions. If the CAOs can have an honest and transparent conversation, the approval of an agreement on joint service provision usually becomes much less of a controversial issue when Council approval is sought. Astute CAOs will know what their Council are likely and unlikely to accept and should represent this in any intermunicipal discussions. Doing this will help achieve a cordial and successful negotiation between the municipalities and provides both Councils with an accomplishment they can take credit for with voters.


Best Practice: When negotiating intermunicipal initiatives, meet CAO to CAO or Administration to Administration first to discuss the issue and potential solutions. This sets the path for success prior to getting Councils involved in the conversation.


Case Studies:


Intermunicipal Agreements
A common practice in the provision of services from one municipality to another or jointly between one or more municipalities is signing an informal or formal agreement. While many services are agreed upon through a handshake deal, it is always important to write down what was agreed. Even if it is a simple Memorandum of Understanding (MOU) or Letter between the parties, putting what was agreed in writing ensures both parties know the terms and future administrators or councillors understand what was decided upon previously.

In some jurisdictions, legislation and regulations are being put in place to make the formalization of intermunicipal agreements a requirement. For example, in Alberta, recent updates to the Municipal Government Act in October 2017 require all municipalities with a coterminous boundary to enter into an Intermunicipal Collaboration Framework agreement. This document must outline all services provided by one municipality to another and the terms of the agreements, including cost-sharing provisions.

To support this process, the Rural Municipalities of Alberta (RMA) and the Alberta Urban Municipalities Association (AUMA) developed a handbook to guide intermunicipal discussions on services. While the Intermunicipal Collaboration Framework Workbook is specific to the requirements of Alberta’s legislation, it provides some excellent tips for working through collaboration on municipal services that are relevant to municipalities across our Country.

Whether they are outlined in an overarching agreement or not, it is important for elected officials to be aware of the intermunicipal agreements their municipality has in place. This is particularly crucial following a municipal election when newly elected officials are unaware of these agreements. A best practice is to provide a briefing of all intermunicipal agreements during the Council orientation process.

Agreements can be bilateral (between two municipalities) or multilateral (between three or more municipalities). In many instances, it makes sense to adopt a multilateral or regional approach to the delivery of a service. This is most common with water, wastewater, and solid waste services. The cost of infrastructure makes it more fiscally viable when multiple municipalities are involved.

Case Studies:

Additional Resources:


Intermunicipal Organizations

Intermunicipal organizations come in many shapes and forms across the provinces and territories of our Country. One thing they share in common is that they are almost all created to support the provision of one or more public services. While many of these organizations are formed through a simple intermunicipal agreement, others are set up more formally through the creation of a separate legal entity.

Examples of separate legal entities (or “third-party service providers”) that can act as intermunicipal organizations include:

  • Regional Service Commissions
  • Cooperatives
  • Public/Private Partnerships
  • Municipal Controlled Corporations
  • Companies
  • Non-Profit Societies

Each type of organization has a distinct purpose and benefits, and can be used to deliver the services agreed upon by the participating municipalities.

When entering into a third-party arrangement that includes the creation of a legal entity for the provision of intermunicipal services, municipalities need to remember that they may be delegating authority to this entity to deliver the identified service. This takes control over that service out of the hands of your municipality and Council and gives it over to this new organization instead. CAOs need to be cognizant of this and ensure your Council understand the implications of said arrangements.

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© Canadian Association of Municipal Administrators

Canadian Association Municipal Administrators
PO Box 128, Station A
Fredericton, NB E3B 4Y2

CAMA is a non-profit association open to all senior managers dedicated to improving municipalities in Canada.

Canadian Association Municipal Administrators
PO Box 128, Station A
Fredericton, NB E3B 4Y2

© Canadian Association of Municipal Administrators