LSB legal advice

The ministry does not provide legal advice to LSBs. LSBs must retain their own lawyers for legal advice relating to board operations. These cost estimates should be included in the annual budget estimates as part of board administration.

Security for secretary

Because the secretary handles the financials for an LSB, before the secretary is permitted to fulfill his or her duties, the secretary must provide security in a form and on terms approved by the minister for the faithful performance of his or her duties and for duly accounting for and paying over all money that passes through his or her hands (the security) (NSBA, subsection 14(2)).

The security should be for an amount equal to the anticipated revenues for the year plus any accumulated revenues.

The premium in respect of the security is paid for by the LSB and the ministry considers this premium to be an eligible operating expense (NSBA, subsection 14(3)).

The LSB may want to consult a relevant professional such as their insurance provider or financial advisor to assist with the purchase of an appropriate security instrument that will meet the requirements.

Cheque signing practices

The NSBA, subsection 12(2) requires the board to pass a by-law authorizing 2 people to be signing officers on behalf of the board, 1 of which would be the secretary and 1 or more board members.

Policies of the board

The content of any policies developed by the board is at the discretion of the board (so long as the board is in compliance with the NSBA).

Any policy developed by the board must be adopted by a by-law of the board passed at a public meeting. The ministry encourages the board to allow public discussion in respect of a policy in advance of adopting it.

The board is permitted to amend any policy by by-law as it sees fit.

The implementation and enforcement of any policies of the board is the responsibility of the board. There is no provision in the NSBA for the ministry to enforce policies of the board.

Although there are not constraints on the policies a board would develop, 2 of the most common policies a board should consider developing and adopting are procedural and procurement policies.

Procedural policies

In order for meetings to proceed in an orderly fashion, it may be beneficial for a board to develop procedural policies. These policies could, among other things, govern the conduct of meetings, including the conduct of voting and of public discussions. This policy should also consider conflict of interest scenarios and how they will be handled and managed by the board.

Procurement policies

To ensure transparency in the purchase of goods or services, LSBs are encouraged to develop and adopt procurement policies which would govern the purchase of goods and services. Read the section 270(2) of the Municipal Act for details.

Insurance

LSBs are required to contract for insurance against risks that may involve pecuniary loss or liability on the part of the board (NSBA, subsection 7(5)).

The insurance requirement is applicable to all LSBs regardless of whether they receive operational grant funding from the ministry or not.

The board must pass a by-law to contract for this insurance and must provide for the premiums for the insurance (NSBA, subsection 7(5)).

The NSBA, subsection 7(6) states that “No action shall be brought against a board or any member of a board for damage caused by any failure by the board to exercise any of its power or to provide any service.” The liability protection stated here deals with only the failure of the board to exercise any of its powers or provide a service. It is not a broad scope liability protection for everything the board or its board members might do or omit to do, which is why the requirement in subsection 7(5) exists.

Once an insurance provider is located, then a by-law is passed authorizing the LSB to enter into a contract for coverage.

LSBs who receive funding from the ministry must check the funding agreement for contractual insurance requirements.

LSBs that do not receive ministry funding are required to have adequate insurance and should contact an insurance broker for appropriate insurance coverage.

LSB should ensure that adequate insurance is in place for the services provided under the NSBA.

Contracts

In the delivery of its powers, LSBs may by by-law:

  1. deliver the power itself
  2. contract with a third party for the delivery of the power

Where the LSBs choose to contract for services, its advised that a contract is developed with the provider that includes without limitation consideration of the following:

  • the service to be delivered
  • the location or area to receive the service
  • the term of the contract
  • the cost of the contract
  • all other items the LSB deems necessary

As contracts are legal agreements between parties for goods, services or both, the ministry does not supply advice on the content or form of a contract, nor is the ministry a party to those contracts.

The LSB is encouraged to seek legal advice in respect of a proposed contract prior to entering a proposed contract.

If an LSBs opts to provide services themselves, it is important to note that they are not to provide services outside of the LSBs legal boundaries. If LSBs contract out to 3rd parties for services, this 3rd party may (or may not) be within the LSB boundaries as long as the contract clearly stipulates that the LSB is only covering costs for services within its geographic boundaries.

Contracts and section 28 of the NSBA

Where a contract involves payment, that payment is considered a debt. A board cannot incur a debt, the payment of which is not provided for, in the current fiscal year’s estimates. Therefore, all contracts other than the exceptions noted in section 28 of the NSBA should be for the period of October 1 until September 30 of the next year or any term in that date range.

Please read the below discussion under the heading Debt for details of the exceptions noted at section 28 of the NSBA, and other relevant information related to the application of section 28.

Debt

A board may incur a debt but cannot incur a debt where the payment of that debt is not provided for in the estimates for the current fiscal year (NSBA, section 28).

The following are exceptions to the above:

  • if the debt is to the Crown in right of Ontario which means that the debt is owed to the Crown (Province of Ontario) (NSBA, subsection 28(1)
  • if the purpose and amount of the debt has been approved by a majority vote of the inhabitants present at a meeting called for that purpose and also approved by the minister (NSBA, subsection 28(2))

Where an LSB is contemplating incurring debt under any condition, it is encouraged first to contact the local ministry staff to ensure compliance to section 28 and for guidance on the process.

Ministry funding to LSBs

The NSBA, section 24(1) allows for the payment of an operational grant to LSBs by the minister.

Funding received under this program can only be used for eligible operating expenses, (as defined in the Bookkeeping section) in the delivery of approved powers. Refer to the section under Revenues and expenses.

Funding under this program is normally paid out in 2 instalments. Refer to 1st and 2nd advances sections for details on payments.

If an LSB is uncertain of their powers, they can review Regulation 737 (R.R.O 1990, Reg.737: Local services boards.

Funding agreements

Under the government’s Transfer Payment Accountability Directive (TPAD), prior to receiving funds a recipient must enter into a funding agreement with the province.

LSB grant payments from the ministry are subject to TPAD; therefore, LSBs must enter into a funding agreement with ministry prior to funds being released.

LSBs will receive a funding agreement, during the months of October or November, from the local ministry staff outlining among other things the powers of the board, the term of the agreement and terms and conditions for funding. After reviewing, the signing officers for the board sign the agreement and return it to the ministry staff who will arrange for a signature on behalf of the ministry. The executed agreement will be returned to the LSB for their files.

Funding agreements can be sent and returned using electronic means or in an electronic format. E-signatures and approvals are permitted granted it is permissible under the LSB’s policies.