ADMINISTRATIVE REPORT

Date: June 12, 2002

Author/Local: Rhys Williams/7282

RTS No. 02738

CC File: 1203

CS&B: July 11, 2002

TO: Standing Committee on City Services and Budgets

FROM: General Manager of Corporate Services

General Manager of Engineering Services

SUBJECT: Negotiation of Long-Term Musqueam Service Agreement

RECOMMENDATIONS:

A. THAT Council authorize City staff to enter negotiations with the Musqueam Band to move portions of the current service agreement to a long-term service agreement. In particular, that City staff enter negotiations to secure a long-term service agreement for the delivery of utility services for sewer, water, and solid waste.

B. THAT City staff report back to Council on the outcome of such negotiations by June 30, 2003.

C. THAT Council approve the renewal of the Musqueam Service Agreement (which expires on December 31, 2002) on the same terms and conditions for a two-year term (January 1, 2003 - December 31, 2004) as an interim measure until such time as negotiation of a long-term service agreement can be achieved.

D. THAT Council authorize the Director of Legal Services to approve and execute the renewal agreement on behalf of the City.

COUNCIL POLICY

City Council is the approval authority for the service agreements entered into between the City and the Musqueam Band.

PURPOSE

This Report recommends that City staff be authorized to enter into negotiations with the Musqueam Band to move portions of the current service agreement to a long-term service agreement. In particular, that City staff enter negotiations to secure a long-term service agreement for the delivery of utility services for sewer, water, and solid waste.

This report also recommends an extension of the current service agreement between the City and the Musqueam Band as an interim measure until such time as negotiations to move portions of the current service agreement to a long-term service agreement can be achieved.

BACKGROUND

Federal and provincial legislation permits Indian bands to levy taxes on occupiers of their lands to the exclusion of municipal taxation. The Musqueam Band, whose lands are located within the boundaries of the City of Vancouver, opted to levy taxes under this legislation commencing in 1991. That action necessitated the replacement of the City's prior service agreements for the two residential subdivisions located on Musqueam Indian Reserve No. 2. (These prior agreements had provided for all normal city services in return for payment of all taxes levied and billed by the City.)

Starting with a letter of understanding in 1991, the City and the Musqueam Band eventually negotiated a new service agreement which was signed in 1994. Under the letter of understanding, initially, and later on, under the 1994 service agreement, normal city services have been provided to the Musqueam Indian Reserve in return for payments "in lieu of taxes" by the Musqueam Band. The 1994 service agreement has been renewed continuously since then on an annual and bi-annual basis pending the development of a long-term agreement.

On December 5, 2000, when Council last approved an extension to the Musqueam Service Agreement, there was a desire by Council to ensure fees appropriately reflect the services delivered under the agreement.

A copy of the current service agreement, without the site schedules, is appended to this report for information.

DISCUSSION

Both the Musqueam Band as well as the leasehold property owners have expressed apreference for a long-term service agreement between the City and the Musqueam Band. However, over the last few years, the many significant events involving first nations in general and the Musqueam Band in particular have made it difficult for the Musqueam Band to enter into, let alone conclude, such negotiations with the City.

City staff have had preliminary meetings with Musqueam Band staff and staff on both sides are of the view that the Musqueam Band now has sufficient staff time and resources to engage in a principled discussion of ways in which the City and the Musqueam Band could enhance their service agreement relationship. On a very preliminary basis, there has been some discussion of investigating the feasibility of having the Musqueam Band provide certain services on its own and thereby provide employment opportunities for Musqueam Band members and divest the City of responsibility for those services.

A long-term service agreement (on appropriate terms and conditions) would be beneficial to both parties. Such an agreement would reflect a more permanent and seamless relationship between the parties based on mechanisms to handle cost sharing and pricing of services, new development and growth/capacity issues around the maintenance, replacement and expansion of the present infrastructure servicing the Musqueam Indian Reserve properties, among a number of other common interests.

On the other hand, negotiating a long-term service agreement is complicated and involves a significant investment of resources. Moreover, there are currently many contingencies which will need to be addressed such as (1) the impact of the proposed First Nations Governance Act (Bill C-61), (2) the possible adoption of a Land Code under the First Nation Land Management Act by the Musqueam Band, (3) the possible effects of the Delgamuuk, Haida, and Tlingit decisions on the City's relationship with the Musqueam Band, and (4) the possibility of a settlement treaty being signed by the Musqueam Band.

Staff on both sides believe the current service agreement embodies principles which can be applied to deal with specific matters on a case-by-case basis, and which can serve as the basis for a long-term agreement. Some steps towards this end have already been taken with the signing of the Lower Musqueam Subdivision Sewer System Connection Agreement in 1997 and Hum-Lus-Um Drive Sanitary Pump Station Connection Agreement in 2001 . Each such "stand-alone" agreement applies and extends the principles embodied in the current service agreement while at the same time addressing new issues on a case-by-case basis.

City staff recommend that the current service agreement be extended for an additional term of two years, in order to maintain the benefits/protections afforded by the current service agreement as well as to facilitate the ongoing work towards a permanent long-term service agreement.

RELATED ISSUES

It should also be noted that the Celtic Shipyard properties, which are located outside of the boundaries of the Musqueam Indian Reserve No. 2, will not be included in any service agreement, given the British Columbia Court of Appeal decision dismissing the Musqueam Band's claim and the denial of leave to appeal to the Supreme Court of Canada.

CONCLUSION

By authorizing staff to enter into negotiations to move portions of the current service agreement to a long-term service agreement, the City and the Musqueam Band can be expected to move towards a mutually beneficial objective of enhancing the relationship between the City and the Musqueam Band and its residents. The target date of June 30, 2003 is considered to be a realistic time frame within which staff on both sides can enter into principled discussions and report back to their respective Councils on the recommended principles on which changes to the current service agreement could be based.

The current service agreement between the City and the Musqueam Band needs to be renewed prior to its expiry on December 31, 2002. City staff are proposing that this service agreement be renewed for a further two-year period in order that the protections/benefits contained in the current service agreement may be maintained while at the same time facilitating the ongoing negotiations towards specific amendments on an issue by issue basis with a view to moving portions of the current service agreement to a long-term service agreement prior to December 31, 2004.

The recommendations of this report support that objective and are submitted to Council for consideration and approval.

LINK TO APPENDIX 1

* * * * *

(c) 1998 City of Vancouver