Article prepared by Scott Spindler, Harrison Pensa LLP and Kevin Bushell, Executive Officer – Facilities Services and Capital Planning, Thames Valley District School Board

Introduction

Over the last twenty years, school boards in Ontario have increasingly found themselves being required or encouraged to enter into a myriad of different arrangements with third parties, including co-building arrangements, community partnerships, third party programming agreements, leases and licenses and fundraising agreements. This paper aims to provide guidance on how to help ensure one develops agreements which best serve their school board.

Best Practices for Developing Legal Agreements

  • Initial considerations. Carefully consider why your board is pursuing the proposed arrangement and take the time to precisely identify and enumerate the specific outcomes and objectives desired/anticipated.
  • Powers and obligations of Boards. Boards of education have specific powers granted to them and a great number of very specific obligations imposed on them under the Education Act and by Ministry of Education (“Ministry”). Boards typically also have a number of policies and procedures which will be of relevance to each particular type of arrangement. When entering into arrangements with third parties, it is important to understand the applicable regulatory framework and internal governance issues, in order to ensure that the arrangements are undertaken in accordance with applicable requirements.
  • Purpose of an agreement. Agreements developed by non-legal personnel often only go so far as to cover the broad objectives of the parties. This is not the purpose of a legal agreement. A good legal agreement carefully details the specific rights and responsibilities of the parties and anticipates and addresses applicable eventualities, to guide the parties and avoid disagreement in the future. The accompanying Schedules provide examples of some of the details which should be addressed in the respective scenarios described. Identifying, addressing and documenting the details and eventualities of an arrangement are what will help ensure the success of the arrangement.
  • Think short term and long term. Most arrangements have a life cycle. In developing any proposal for a third party arrangement, careful consideration should be given to both the short term and long term requirements and consequences of the arrangement. In the initial or “start-up” stage, what are the responsibilities of the parties? What will be the ongoing commitments and responsibilities once the arrangement matures? What is an appropriate “term” for the arrangement, and how and in what circumstances might it to come to an end? What is to occur when the arrangement does come to an end? Every board needs to understand how the arrangement can or will come to an end and what its rights and obligations are at that time.
  • Has careful consideration been given to all financial aspects of the arrangement? Are contemplated expenditures allowed under current budgets? What will be the ongoing financial commitments of both parties? Is the arrangement sustainable from a financial perspective? Have the respective business and purchasing departments been made aware of the financial aspects of the proposed arrangement?
  • Working with legal counsel. Achieving a legal agreement which will be of most benefit, requires a commitment to working with legal counsel. This means adequately explaining to counsel what you are trying to achieve and engaging in a healthy dialogue to explore all aspects of the proposed arrangement. Board personnel involved in the project need to commit to reviewing all materials prepared by legal counsel, with a view to understanding the entire document and ensuring that the issues they feel should be addressed have been. Consider selecting legal counsel who has experience working with boards of education, then commit to making the relationship a collaborative one.
  • Take control of the paper. Always consider offering to have your legal counsel prepare the first draft of an agreement. Doing so will allow you to set the stage for discussions/negotiations and help ensure that the concerns and objectives of your board are addressed in the first instance.
  • Beware the “B-memo”. While B-memos can often provide helpful and needed guidance, it is not always the case that a complete analysis of all the repercussions of the suggested courses of action has been undertaken. Take the time to fully analyze the arrangement and to develop appropriate short and long-term strategies which position your board to succeed in its objectives without creating undue burdens on it.
  • Precedents and templates. Precedents and templates have both strengths and weaknesses and it is important to understand the difference. Precedents can assist one’s analysis and development of a legal agreement by providing a “laundry list” of some of the issues which should be considered in the particular context. As well, the development of appropriate templates for particular subject areas can assist a board in ensuring consistent treatment of similar arrangements. Care needs to be taken, however, to ensure that one does not rely too heavily on precedents and templates. There will always be unique circumstances in any given arrangement which have not been addressed or contemplated by a precedent or template and which will need to be. There will also often be reasons to vary a particular approach from that taken in a precedent or template, due to unique aspects of an arrangement. Precedents and templates are starting points and not ends in themselves.
  • Take the time needed. A good legal agreement should: assist a board in achieving its objectives; properly address the rights and obligations of the parties over the life span of the arrangement; address how the arrangement can be unwound or otherwise come to an end; and, perhaps most importantly, properly protect the board. In order to achieve this, one needs to dedicate sufficient time to develop a good legal agreement. Project timelines need to include: appropriate time for internal consultations and deliberations; appropriate time for discussion and exchange of information with legal counsel; appropriate time for negotiations with third parties; and, appropriate time for your own work group’s detailed review and comment on draft materials.
  • Remember that third parties often consider boards of education to be resource rich in terms of funding, available personnel, as well as physical and other resources. Furthermore, because boards of education are publically funded, there can be a tendency for third parties to feel they have a greater interest in the resources of boards of education than they in fact do. Boards of education have very clear statutory mandates as to the use of their resources. When negotiating any arrangement with a third party, care must be taken to ensure one is adequately protecting the autonomy of the board and is in no way hampering it from fulfilling its mandate under the Education Act.

Conclusion

The benefits of a well prepared agreement will always outweigh the time, effort and costs involved in preparing that agreement. These costs will also pale in comparison to the internal and external costs which can be involved when a poorly defined or documented relationship/arrangement breaks down. Attached are two outlines of legal agreements one Ontario school board developed and achieved considerable success with. These outlines are, however, just that and should not be relied upon as being in any way sufficient to address any arrangement your school board might have.

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About the Authors

Scott Spindler is a lawyer located in London, Ontario, who has worked with boards of education throughout Ontario, helping them navigate their way through the complexities of third party arrangements, while understanding the particular challenges facing boards of education. Scott can be reached at or 519-661-6734.

Kevin Bushell. As Executive Officer of Facilities Services and Capital Planning with Thames Valley District School Board, Kevin is integrally involved in setting strategic goals, maintaining the health and quality of the physical environment for students and staff and providing essential environmental, capital planning and development to support schools and the school board. This includes providing sound advice and decision making relating to instructional accommodations, facility matters and maintaining and providing effective and efficient services and practices through Facilities Services and Capital Planning. Kevin is also responsible for the negotiation of agreements with third parties for all external services administered by Thames Valley’s Facilities Services Department.