An Overview of Interlocal Agreements
Interlocal agreements are an often-overlooked yet important aspect of local government. In simple terms, these agreements allow municipal governments and other public entities to collaborate, share resources, and better serve their communities’ needs. When two or more public entities enter into an interlocal agreement, they form a legally binding contract that outlines the responsibilities and contributions of each party.
But why are interlocal agreements important? They help local governments share resources, pool funds, and cut down on the costs associated with carrying out public projects . By working together, local agencies can accomplish tasks that may be beyond their financial or technical capabilities on their own. For example, in emergency planning or disaster response, an interlocal agreement might involve several municipalities banding together to purchase expensive equipment that would be too costly for an individual municipality.
Interlocal agreements are a powerful tool that can help local governments do more with less and provide essential services to their communities in a cost-effective way.
Interlocal Agreements Legal Basis
An interlocal agreement is a legally valid and binding contract among units of local government, typically for the purpose carrying out a joint undertaking or a cooperative program. A governmental agency, such as a city or county, must have the actual or statutory authority to enter into an interlocal agreement. Even in the absence of specific statutory authority, generally a county is presumed to have the power and authority to enter into a cooperative program. A county is authorized by statute to participate in the acquisition or improvement of telecommunications systems as part of a regional system. Another statute specifically authorizes a county to enter into agreements with other local governments to determine the responsibilities of the parties with respect to the construction, extension, expansion, operation, maintenance, repair, and financing of a solid waste disposal facility and related systems. This statute requires that each county participating in the agreement must negotiate its respective responsibilities. An example of a regional approach to providing solid waste disposal services is the Solid Waste Program of the Polk County Board of County Commissioners comprised of a regional waste-to-energy facility, two regional landfill facilities and multiple recycling and solid waste processing facilities, including a yard waste and clean wood waste facility.
Basic Elements of an Interlocal Agreement
Interlocal agreements serve as a means for jurisdictions to collaborate on various public projects. However, the terms and structure of the agreements can greatly differ. In general, some of the key components commonly included in these agreements are: the parties involved, the objectives, the terms and conditions of the agreement and the responsibilities of each party. Specific parameters may include provisions concerning the fiscal aspects of the project, the property (if applicable), maintenance of the project, insurance and any other miscellaneous provisions that may be pertinent to the particular agreement.
These agreements typically may be entered into, when two or more government units find it desirable to exercise any power, or perform any governmental function, which any one agency would have the power to exercise, or perform by authority of law. Some authorized purposes include: supplying water, waste disposal and park & recreational facilities.
The approved agreements must be filed with the State Auditor’s Office and complies with Unified Finance and Reporting Standards for Political Subdivisions in Washington.
The Advantages of Interlocal Agreements
One of the most significant benefits of interlocal agreements under the Florida Interlocal Act is cost savings. By collaborating in a joint venture, separate local governments can realize cost savings that would likely be out of reach through an individual effort. For example, two or more local governments may wish to build a regional water treatment facility. Individually, they may lack the money or credit to make such a project feasible, but together, they can pool their resources to get the project off the ground. The resulting facility can then provide much of the local water needs for each of the jurisdictions, helping to avoid heavy reliance on local well and individual homeowners and property owners. The result is not only a cost savings for the participating entities, but enhanced quality of life for the participating residents.
There are other tangible benefits that can result from participating in interlocal agreements. Under the Florida Interlocal Act, qualifying local governments can now share many important services. Personal services such as engineering, accounting, payroll, information technology, and even fleet management can easily be shared through joint agreements between neighboring governments; without having to hire additional personnel to do the job. These efforts save substantial sums of taxpayer money at both the local and state levels. A Fort Lauderdale ordinance shows these combined efforts can also improve service, make a consistent form of service available throughout the city, and even enhance the effectiveness of any particular project.
One of the most commonly cited examples of the success of interlocal agreements is the creation of a regional (or even statewide) economic development council. This plan is often overseen by serving executives from larger companies that have a strong board of directors into the mix. These boards are not limited to a single county or region. Their area of influence may reach the entire state, (perhaps the deep southwest Florida region), and have additional powers. An example of such an agency would be the Tampa Bay Economic Development Council. The Tampa Bay area is made up of six counties including Lee, Charlotte, DeSoto, Sarasota, Manatee, and Hillsborough. As one of the largest areas in half the state, the interlocal agreement serves to promote the entire region in its efforts to attract and retain new businesses and economic development.
Addressing Issues in Interlocal Agreements
An example of the coordination that can be required across multiple jurisdictions is a multi-jurisdictional enterprise zone. The purpose of a multi-jurisdictional enterprise zone is to incorporate contiguous areas between cities and counties to provide beneficial tax treatment for special projects that the local governments hope will spur development. Governing boards of participating local governments must agree upon the wording of the tax incentives and submit them to the tax commissioner for approval. This process can require several rounds of coordination among a large number of local governing bodies, and industry representatives have indicated that some level of disjointedness can result if the appropriate level of public input is not obtained at the beginning of the process.
Court orders may also be necessary to clarify responsibilities for joint development of industrial properties. For example, in one case a county and city were jointly involved in marketing the development of an industrial park, but had not clearly defined their roles. The county took the lead and assumed responsibility to put together an application for state funding. The obscurity regarding the county’s position led the county to draw up and file the application by itself. When the county was awarded a grant it came as a surprise to the city, which had assumed a grant would be awarded to it as a joint applicant. After a lawsuit, the court ordered the city to agree to a joint application procedure with the county to resolve the ambiguity.
Local governments have also employed the use of model contracts to prevent interlocal agreement disputes about the sharing of service costs and responsibilities. The model contract should include common services and payment provisions , as well as methods for resolving disputes.
Legal issues may arise if one partner uses a different revenue source from another to fund the same service. Generally, the service funding sources must not be governed by creative accounting to allow one partner to pay two different service providers for the same service. Any difference in revenue sources used should be reconciled in the interlocal agreement in order to avoid disputes between the partners.
Even if legal issues and public controversy are avoided, a local government may find that its efforts to produce desired outcomes with an interlocal agreement are unsuccessful. In such a case, local governments should consider revising the agreement or using an alternative approach to cooperation. If the assignment of activities to one partner, for example, does not result in the agreed-upon public benefits, it may not be feasible to extend authority for such activities to that partner in the future. In this case, a local government could either continue to assign the activity on the same terms or terminate the agreement and carry out the activity itself.
Interlocal agreements consistently have been opposed by some concerned citizens. Several recent studies characterize the interlocal agreement process as "snooze ball conferences" that are poorly organized, poorly supported, poorly completed, poorly distributed to those who need to know, and poor at obtaining input and acting on it. Interlocal agreements may be less effective than other means of interjurisdictional cooperation for several reasons. First, interlocal matches must be made before the action can be taken, necessitating early and often complete consensus. Second, interlocal agreements may create unsatisfying long-term commitments. Finally, interlocal agreements too often result in inequitable burdens on certain localities.
Case Studies and Examples of Interlocal Agreements
A number of local governments in Florida have found interlocal agreements to be an effective way to partner with northern municipalities to provide local services. For example, in 1992 the city of Tallahassee entered into an interlocal agreement with Thomas County, Georgia to jointly provide radio system components including frequency coordination, radio design, consultant contract management, radio tower co-location, and administrative functions, and to jointly administer a state grant for regional interoperability. As a result of this arrangement, local and state agencies in both areas are able to benefit from the same radio system. In turn, the residents of both communities benefit from the same technology and seamless interoperability in emergency situations.
Another example is the agreement between Collier County, the Naples Airport Authority, Marco Island Airport Authority and the South Florida Water Management District for Collier County to provide for the operation of the Naples Airport Authority and Marco Island Airport Authority Wastewater Treatment Plants and the South Florida Water Management District to provide for the operation of the Collier County South Transfer Station and miscellaneous Collier County Utilities on-call services. These interlocal agreements are just two of many examples in which municipalities, cities, counties, local districts, and other public agencies throughout the nation have formed local partnerships that benefit the communities they serve.
Trends in Interlocal Agreements and Future Implications
As the landscape in these areas becomes more fragmented and the pressure on resources intensifies, the adoption of interlocal agreements across state lines is likely to become more prevalent. The increasing demands for services due to population growth and changes in demographics, paired with technological advancements and the globalization of commerce all create a push toward broadening the application of interlocal agreements. Expect to see states relax some of their regulations on the forming of interlocal agreements to meet such demands and to better encourage collaboration – this entirely speculative trend may make the interoperability of governmental services across state lines a likelihood of tomorrow. Already, certain areas of New Jersey and Pennsylvania have promoted cross-border regional cooperation via the Delaware Valley Regional Planning Commission (DVRPC) and the Lehigh Valley Planning Commission (LVPC). A borough could benefit from sharing some services with another neighboring municipality as easily across state lines as it could within its own state.
As governmental entities look to save money in providing public services, interlocal agreements will continue to be the tools necessary to implement joint programs, fund operations, and seek assistance from descendants from the Article V framework. Beyond simple cost-savings financing prospects, the future may see the advent of RFQ and RFP based interlocal agreements to further increase efficiency in service delivery.
Technological advancements are likely to play a large part in the future of interlocal agreements. Expect to see systems developed by and for groups of local governments that will streamline the formation and maintenance of interlocal agreements – the process of executing an interlocal agreement should look like a cross between an online business transaction and a Facebook-like application. A clear filing process, built in message boards, and document templating software are becoming increasingly common. Updating the interlocal agreement process to leverage technology can make for a more interactive and engaging experience – and sadly, just may be expected.
Conclusions and Implications for the Future
In summary, interlocal agreements provide local governments with a cost-effective and cooperative tool to deliver public services. The purpose of interlocal agreements is to expand the public good by enhancing the services available to constituents. Interlocal agreements are proven to be an efficient means of providing services that would be inefficient for a single local government to provide independently. Not only do interlocal agreements create operational efficiencies , but they also substantively improve the quality and range of public services available to constituents.
Local governments should not overlook interlocal agreements in the course of their daily operations. We encourage all local governments to consider whether an interlocal agreement is the right tool to create operational efficiencies in delivering public services.