Intergovernmental Agreements

From Municipal Cooperation Guide, MRSC Report No. 27
September 1993

What are Intergovernmental Agreements?

One of the most common methods for neighboring jurisdictions to cooperate is for them to enter into interlocal agreements with one another. These agreements may take a variety of forms. The most common form involves a formal contract for services between two jurisdictions under which one government agrees to provide a service to another government for an agreed price. For example, a city may contract with another city for law enforcement services. Intergovernmental agreements may also take the form of a joint service agreement where two or more jurisdictions join forces to plan, finance and deliver a service within the boundaries of all participating jurisdictions. Finally, governments may also enter into various types of service exchange arrangements under which participating jurisdictions agree to lend services to one another, generally without any payment being required. Examples of this type of arrangement are mutual aid agreements for emergency services which exist between many jurisdictions in this state.

The Interlocal Cooperation Act (Ch. 39.34 RCW) in this state contains a broad authorization for any one or more public agencies to contract with any one or more other public agencies to perform any governmental activity or service which each agency is authorized by law to perform individually. Public agency is very broadly defined as any agency, political subdivision, or unit of local government of this state. This includes municipal corporations, special purpose districts, local service districts, any agency of the state government, any agency of the United States, any Indian Tribe recognized as such by the federal government, and any political subdivision of another state. This means a city may contract with another city, the county, a special district, an agency of state government and so on.

This also means that a very wide range of services and activities may be the subject of the contract. Some common examples are law enforcement services, fire protection services, jail services, court services, emergency dispatch services, building inspections and code enforcement.

It is also possible to contract for joint use of equipment, buildings or personnel under the Interlocal Cooperation Act.

The three basic types of agreements might be described as follows:

1. Understood Contract: Its most common use occurs between two smaller neighboring towns or an isolated town and its county or nearby fire protection district. This usually takes the form of a mutual aid agreement but in this context there is no definite written contract but merely an informal understanding. This friendly agreement to provide aid carries a decided hazard, however, which bears careful consideration by administrators. In the event of an emergency, the provider may be unable to answer a summons for help because of a formalized contract with another who is also requesting service. Then, too, there is no recourse for services which are not provided or services provided in a very casual or minimal manner.
2. Service Contract: Under this arrangement, one unit of local government contracts with another to provide one or more services for a stated amount. The terms of the contract are negotiated and formalized in a written agreement. One city or other entity is the supplier of the service and the other pays for the service. This is the most common method of intergovernmental contracting.
3. Joint Agreement: This method is distinguished from the service contract in that responsibility for the performance of a particular function or the operation and construction of a facility would be shared through the creation of an administrative vehicle to handle service responsibilities; e.g., a board consisting of representatives of each participating governmental unit. The joint agreement may be spelled out through a contract, generally authorized by ordinance, following procedures established in the Act, which spells out the details at local discretion. This approach leaves a good deal of flexibility so that local officials can tailor the program to reflect their own needs and sensitivities

Pros and Cons of Interlocal Agreements

Advantages of Interlocal Agreements

1. Increased efficiency can be attained by establishing optimum-size operating units on a function-by-function basis.
2. Underutilized and expensive equipment, facilities and manpower can be shared. Seldom used or expensive facilities and equipment and specialized personnel may be better utilized.
3. A local government can obtain a service or a product which it cannot produce itself or can produce only at a prohibitively high cost.
4. Duplication of efforts may be eliminated and overall service efficiency increased.
5. A problem affecting several local governments can be solved without changing the basic structure of the local government system.
6. Intergovernmental service arrangements can enhance the service capabilities of small local governments by allowing them to provide specialized services to their residents that they may not otherwise be able to afford.
7. Intergovernmental service contracts allow local governments to avoid start-up costs of purchasing new equipment or hiring staff to provide a particular service.

Limitations on Use of Interlocal Agreements

1. Poorly drafted agreements which do not provide adequate definitions of expected service levels and contractor responsibilities can cause friction between participating jurisdictions.
2. Smaller jurisdictions contracting for services from a larger jurisdiction may fear loss of control over service delivery. Clearly drawn contract specifications may somewhat reduce this problem.
3. It may be difficult to distribute costs and services equitably among participating agencies.
4. Retirement, insurance, and other overhead costs may be difficult to compute and distribute.
5. Personnel dislocations are sometimes involved. This is particularly true if a service that is being contracted out has traditionally been performed by city employees.

The Interlocal Cooperation Process

The Interlocal Cooperation Act contains few procedural requirements. Cities are given considerable flexibility under the Act to choose the kind of arrangement most appropriate to their needs. Public agencies may contract to perform services for other public agencies or they may enter into agreements for joint or cooperative action. Such joint or cooperative agreements may either provide for a separate legal or administrative entity to conduct an undertaking or may provide for an administrator or joint board to administer it.

Powers Which May be Jointly Exercised

The Interlocal Cooperation Act authorizes public agencies to jointly exercise powers only where all participating agencies can exercise the powers separately. (RCW 39.34.080) This means that a city may not borrow the authority to perform a service from another agency's enabling authority. However, some common types of services which are provided through interlocal agreements are fire and police protection, building inspection, jail and dispatch services, emergency medical services, library operations, public health, animal shelter operations, and court services. As can be seen, the possibilities are very broad and include many types of services.

Authorization of Agreements by Governing Bodies

Before any interlocal cooperation agreement may become operative, the governing bodies of the participating agencies must take appropriate action by ordinance, or resolution, to authorize the agreement. (RCW 39.34.030(2) and 39.34.080). The agreement must be filed with the county auditor prior to it going into effect. (RCW 39.34.040).

Types of Agreements Under the Act

The opportunities for sharing are substantial and are not limited to services, but may also include sharing personnel facilities and equipment.

1. Personnel. Local governments may share not only services, but personnel, such as secretaries, clerks, computer operators and financial analysts. The method of contracting is similar to other types of services. However, the agreement should include provisions detailing the personnel procedures (hiring, dismissing, promoting, paying, etc.).
2. Equipment. Equipment is a natural for sharing and the advantages of common ownership help all the participants: reduced acquisition costs, reduced annual maintenance, lesser programming expenses and smaller office space requirements.
   
   The costs can either be split in the cost of purchasing or leasing the equipment, or one municipality can buy the equipment and rent or lease it to the others. In this situation, the purchasing municipality may wish to create an Interlocal Government Rental Agreement which may include the following provisions:
   • a. The purpose of the contract;
   • b. A section providing for the duties, rights and responsibilities of each party to the agreement;
   • c. Rental charges for the equipment;
   • d. Liability of each party spelled out in detail (it is recommended that the city owning the equipment carry its own insurance for damage against the equipment); and
   • e. An explanation of the rental procedure.
3. Facilities. Municipalities may engage in the joint occupancy of facilities either as partner, landlord or tenant. If the agreement or contract is being made to purchase or rent a revenue-producing building or facility, some method may be specified for the return to the parties of their original investment as well as the payment to either party of any revenues produced by the facility. The time periods at which payment must be made should also be specified.
   
   As with any joint agreement, it is important that the division of authority, responsibility, and expense is clear, detailed, and distinctly understood by both parties to the agreement.