LSB legal advice

The ministry does not provide legal advice to LSBs. LSBs should seek independent legal advice when looking 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

The Secretary before entering on the duties of office shall give security in a form and on terms as the minister may approve for the faithful performance of their duties and for duly accounting for and paying over all money that comes into their 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 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 the secretary and 1 or more members of the board to be signing officers on behalf of the board.

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 should be adopted by a by-law of the board. 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 no 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.

See section 270(2) of the Municipal Act).

Insurance

A board shall by by-law contract for insurance against risks that may involve pecuniary loss or liability on the part of the board and provide for the payment of premiums therefor (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 NSBA Section 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 LSB should ensure that adequate insurance is in place for the services provided under the NSBA.

Contracts

As contracts are legal agreements between parties for goods or services, 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 LSB opts to provide services themselves, it is important to note that they are not to provide services outside of its board area, with the exception of fire protection services as set out in section 7 of the NSBA.

Contracts for fire protection services have the same meaning as in the Fire Protection and Prevention Act.

If the board is considering entering into a multi-year contract for the provision of a service, the following should be considered (note that this list is not exhaustive):

  • seeking legal advice to ensure contracts are properly drafted and in compliance with the NSBA (including section 28 of the NSBA).
  • ensuring by-laws are properly drafted (including by-laws under section 23 of the NSBA).

Debt

A board may incur a debt for the purpose of the board but shall not incur any debt for the payment of which is not provided for in the estimates for the current Fiscal Year of the board (NSBA, Section 28).

The following are exceptions to the above:

  • if the debt is owed to the Crown in right of Ontario (NSBA, Section 28), or
  • if the purpose for which the debt is to be incurred and the amount of the debt has been approved by a majority vote of the inhabitants present at a meeting called for that purpose and the minister’s’ approval to the incurring of the debt has been obtained (NSBA, Section 28).

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

Funding received under the LSB program can only be used for eligible operating expenses, (as defined in the Bookkeeping section below) in the delivery of approved powers (refer to the section under “Revenues and Expenses”).

  • Funding under this program will typically be paid out in 1 instalment within the government and LSB fiscal year.

If an LSB is uncertain of its powers, the LSB can review Regulation 737 (R.R.O 1990, Reg.737: Local Services Boards.

Funding agreements

In accordance with the Government of Ontario’s “Transfer Payment Accountability Directive” (“TPAD”), a LSB must enter into a funding agreement with the province before the province is able to provide funds in accordance with the terms and conditions of the funding agreement.

LSBs in good standing will receive a funding agreement, during the months of October or November, of an election year 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.