Managing the CAO Relationship: What Alberta Councils Need to Know

Last month, we looked at who does what under Alberta’s Municipal Government Act, including how council sets direction and how the CAO and municipal staff put those decisions into effect. This month, we’re taking a closer look at one part of that relationship: council’s role in managing the chief administrative officer (“CAO”).

Those responsibilities are governed by the MGA, but the legislation is only part of the picture. The CAO’s employment agreement and common law employment principles can also significantly affect how performance and termination issues should be handled.

Hiring, Evaluating + Removing the CAO

The CAO is typically the only municipal employee who reports directly to council, so responsibility for managing that relationship rests with council as a whole. Recognizing the significance of these decisions, the MGA prescribes how council must handle each stage of the relationship, from the annual performance review to suspension or termination:

• Annual evaluation - Council must give the CAO an annual written performance evaluation.
• Majority of the whole council - Appointing, suspending or revoking the appointment of a CAO requires a vote of a majority of all members of council, not just those present.
• Notice and a chance to respond - Before suspension or revocation, the CAO must receive written notice with reasons, delivered personally or by regular mail to the CAO's last known address. If the CAO asks, the CAO or a representative must have a reasonable opportunity to be heard by council.
• Consequences - A CAO whose appointment is revoked without cause is entitled to reasonable notice or compensation in lieu. A CAO revoked for cause is not. Both rules are subject to any written agreement between the municipality and the CAO.

The statute is only part of the picture. Most CAOs have written employment contracts, and their termination clauses will usually govern what is owed. Where a municipality relies on cause, it must meet the common law standard, which asks whether the misconduct, viewed in context, is so serious that the employment relationship cannot continue. A record of annual evaluations and documented concerns is often decisive.

Delegation + Designated Officers

Council’s relationship with the CAO also includes determining what municipal authority can be exercised through administration.

Council may delegate many of its powers, duties and functions to the CAO by bylaw. Some core powers must stay with council, including passing bylaws and adopting budgets. However, common delegations to the CAO include:

• issuing, suspending, cancelling or placing conditions on municipal licences and permits;
• starting or defending legal proceedings for the municipality and settling insured claims;
• acting as subdivision or development authority, where council's bylaws designate the CAO or staff in that role; and
• managing municipal employees and resources, including setting staff terms and conditions of employment.

The CAO may in turn delegate any of the CAO's powers, duties or functions to a designated officer or another municipal employee, but the delegation does not relieve the CAO of responsibility for how the work is done.

Council may also, by bylaw, create designated officer positions, give them titles, set their powers and duties, and appoint people to them. Unless council's bylaw says otherwise, designated officers are supervised by and accountable to the CAO. Where no designated officer position has been established, a position is vacant, or duties have not been assigned, the CAO may carry out those duties.

A designated officer's appointment may be revoked with or without cause. Revocation without cause entitles the officer to reasonable notice or compensation in lieu; revocation for cause does not. A written agreement between the municipality and the officer can change those entitlements.

Implications for Northern Municipalities

The council-CAO relationship can be especially important in smaller and remote communities, where senior administrative roles may carry broad responsibilities and recruitment or retention can be challenging. Clear expectations, regular performance discussions and careful documentation can help councils manage that relationship consistently and reduce uncertainty when concerns arise.

The specific statutory requirements will vary by jurisdiction, so Northern municipalities should consider their local legislation, employment agreements and governance policies when addressing CAO performance, delegation or termination.

Key Takeaways

The CAO relationship sits at the intersection of municipal governance and employment law.

Councils should not wait until the relationship has deteriorated to review the CAO’s contract, performance history and applicable legislative requirements. Clear expectations and consistent documentation can give both council and the CAO a better understanding of where things stand and help reduce risk if concerns later become more serious.

If your municipality needs assistance with a CAO employment agreement, performance management, annual evaluation, suspension or termination, contact  Anthony Burden, Janika Sumaylo or any member of Field Law’s Municipal Law Group.