What Are Interlocal Agreements?
Various local entities, agencies, and districts may be created to provide for essential public services to the consuming public. In addition, local government entities may join together in any number of endeavors that require cooperation amongst the various units of government. These collaborative efforts, referenced as interlocal agreements, allow local governmental entities to cooperate in the performance of governmental functions, including but not limited to the construction and operation of waste disposal facilities, water, sewer, drainage or non-drainage stormwater facilities, hospitals and other medical care facilities, jails or correctional facilities, and may also include the function of solid waste collection or promulgation of a comprehensive plan.
All interlocal agreements must be adopted by ordinance or resolution approved by the governing body of each party , except in the case of a sole party pursuant to Section 163.01(4) which provides that certain public agencies and some single purpose districts and authorities are authorized to create an interlocal agreement by an affirmative vote of a majority of the governing body of the participating agency. The board of county commissioners may enter into an interlocal agreement with its countywide development board for the joinder of the county and the countywide development board in making applications for federal grants or loans, shall a countywide development board be created by the board of county commissioners utilizing the authority of Section 125.901, Florida Statutes.
Characteristics of Interlocal Agreements
Interlocal agreements can contain a myriad of terms, but there are some "essential characteristics" that interlocal agreements can have. First, they must contain the term and scope of the collaboration. While the legislature has provided that interlocal agreements, in many instances, pose no limitation on the duration of the agreement, interlocal agreements must have a definite period during which the terms are in effect. The term must be clear and unambiguous, and when the interlocal agreement is established for a term longer than one year, it must include specific dates on when the governing bodies will review the subject matter terms within the agreement. The agreement must also provide a method for early termination. Certain types of interlocal agreements governed by state statute may have restrictions on the length of the agreement.
An additional characteristic of interlocal agreements is funding arrangements. The interlocal agreement must specify the financial responsibilities of each party. As indicated by the statute, the participating parties may agree to finance the term of the agreement with the total cost or expenses being borne equally by each party, or the parties can agree on an agreed upon formula for determining costs. The parties can also agree to divide all costs incurred, including the purchase of assets, on a proportionate basis to be determined by the contribution of each party.
Interlocal agreements also must contain a method for allocating services, responsibilities, and decision-making. The method of governance for interlocal cooperative projects may not seem important to the parties, but if the governance is not clearly articulated within the agreement, it may be impossible to understand who maintains authority over the agreement.
Interlocal agreements also should have language addressing immunity from liability issues for both the contract and criminal acts committed by the cooperating parties. Interlocal agreements may further include language that allows for a tort liability waiver. For tort liability, the cooperating governments maintain sovereign immunity, and the individual employees named in the interlocal agreement have immunity for their negligence while acting within the scope of their employment.
Interlocal agreements are frequently used in the public procurement process. Another common use of interlocal agreements is for the purchase of insurance by school districts. School districts use interlocal agreements to jointly purchase insurance coverage to be assured that each School District receives equal insurance coverage at the lowest possible rates.
Parties to an interlocal agreement often have the option of choosing which state law of the participating state will govern the agreement. An interlocal agreement may indicate the state law which will ultimately control the agreement. For example, if the parties to the agreement wish to be governed by the law of the state in which the agreement is created, the agreement would specifically indicate as such.
Advantages of Interlocal Agreements
The advantages of interlocal agreements are numerous and can provide significant benefits to the participating local governments. Such agreements can lead to cost savings by eliminating duplicative programs or services, and producing economies of scale. When localities join together to provide a service, purchase equipment or supplies, or complete a construction project, the end result can be reduced costs and greater efficiencies for the taxpayers within those jurisdictions. Interlocal agreements can also help local governments share valuable resources, which can be especially helpful when a limited staff does not have the capacity to meet a certain need. When a locality needs additional expertise to work on a particular problem, sharing staff with another jurisdiction can also be a time-saving and cost-effective solution to resolve an issue.
Other benefits of interlocal agreements include enhanced problem-solving capabilities and improved public services. For example, local governments can collaborate to address air or water pollution from a common source, or can work together to provide universal access to broadband for their respective residents. Collaborative efforts have also resulted in creative solutions to social problems such as homelessness, crime, and public health issues. The provision of affordable housing by multiple local governments, for instance, can be complemented by supportive services such as job training, mental health counseling, or child care resources. Partnerships between municipalities can also promote the plan and construction of efficient transportation systems and can help localities prepare for and respond to natural disasters.
Common Issues in Interlocal Agreements
Despite the advantages of an interlocal agreement, challenges still exist in the process of drafting and carrying out deals between local governments. One of the most frequent issues is the political climate between the local governments and the counties that they may serve. For example, will they work together to face periodic funding issues? Some agencies may have a greater need for funding than other agencies. For instance, a library may receive a great deal of funding and another agency like a fire department may receive less funding but both need help. Understanding the needs of both parties should be outlined when drafting the agreement.
Another issue with interlocal agreements is that they are often long-term agreements. Whenever you have a long-term deal, the people involved years later are often not the same people who negotiated the deal. The unforeseen could change the political climate and other things such as funding and personnel. The State of Florida attempts to remedy this problem by requiring renegotiation of interlocal agreements every 10 years. An accounting study shows the interlocal agreement concerning the lead agencies of the polk county thoroughbred horse racing industry fund will cost each city approximately $1.3 million. The current interlocal agreement was signed in 2009 and the cost was split among five cities. There will be a renegotiated interlocal agreement with each of those five cities to cover the years 2019 through 2029. The decision has not been finalized, but it may mean that the cities could be responsible for funding the excess amount if Tampa Bay Downs is unable to raise the funds to operate.
Legal Aspects of Interlocal Agreements
The legal framework for interlocal agreements is grounded in propriety, prudence, common sense, and public policy. Moreover, interlocal agreements often involve "home rule" and the exercise of power by "creatures of statute" which tend to require special consideration and deference by courts.
Counties and municipalities typically have "home rule" authority granted by their respective state constitutions or state legislatures. This means these bodies have authority to exercise powers to provide for the general health, safety, and welfare, unless prohibited by law.
In Florida, for example, a county has all powers of self-government, except as otherwise provided by charter or as otherwise provided by general law. See Fla. Const., Art. VIII, § 1. A municipality has "broad powers of self-government." See Art. VIII, § 2(b). The same is true in many states, although the scope and extent of home rule vary.
Interlocal agreements are creatures of statute. See Fla. Stat. § 163.01(1)(b). In Florida, the interlocal cooperation statute is often referred to as the "Interlocal Agreement Statute" or simply "Interlocal Act."
According to the Florida Attorney General, the Interlocal Act "establishes a method by which two (or more) units of local government may enter into cooperative agreements for their mutual benefit." Op. Atty. Gen. Fla. 91-45 (1991). Without this statute, counties and municipalities would be limited by the specific powers that are expressly granted. To this point, many statutes specifically authorize interlocal agreements between certain local units of government.
Interlocal agreements have been held to bind successors in interest to the parties , notwithstanding the possibility of deficiencies in any one or more of the parties’ statutory powers. See City of Tallahassee v. Sykes, 461 So. 2d 206 (Fla. 1st DCA 1984). Even if there are deficiencies, the court will assume that the duties under the agreement, if any are required, are lawful, and no limits on the powers of the parties provide to the contrary. Id.
Courts "must not only uphold an [interlocal agreement], but must presume that the agency acted within its powers." Id. Further, if a legislative body enacts an interlocal agreement ordinance or resolution, a court will not entertain an inquiry into the wisdom of the agency in enacting the agreement. Id.
Nevertheless, an interlocal agreement must promote a valid public purpose, and the court will void such an agreement if it benefits private interests at the expense of a public purpose. See id. (citing Lynn v. City of Moultrie, 95 So.2d 161 (Fla.1957); People ex rel. Dep’t of Pub. Works of City of New York v. Appropriation by City of New York, 17 N.E.2d 547 (N.Y.Sup.Ct.1938)).
Municipalities and counties "have interlocal agreements for the accomplishment of all manner of projects as long as they act within the scope of their statutory powers." Broward Cty. v. City of Sunrise, 789 So. 2d 388, 396 (Fla. 4th DCA 2001). Thus, the Interlocal Act "is an enabling measure which broadens the scope of interlocal activities otherwise within the purview of the various local governments…" Id. at 397.
In the era of budgetary constraints, local governments are responding creatively to find new ways to make efficient use of their limited resources. However, it is always advisable to follow statutory requirements that govern interlocal agreement.
Examples of Successful Interlocal Agreements
While there are a multitude of interlocal agreements throughout the state, we have included some examples below which demonstrate the upward trend of collaborative efforts between local governments in the spirit of improving local government operations and public services through the use of interlocal agreements.
Lakefront Districts: Six municipalities in the northern suburbs of Cook County (Evanston, Skokie, Lincolnwood, Glencoe, Wilmette and Winnetka) formed the North Shore Lakefront Communities Joint Action Agency.
Wastewater Treatment: DuPage County entered into an intergovernmental agreement for the purpose of building and maintaining a sewer system to improve the water quality of the Des Plaines River. The agreement eliminated bottlenecks which caused substantial sewer overflows during rainstorms.
Animal Control: The City of Waterloo and Grant Park Township entered into an interlocal agreement for animal control services. The City provides shelter, control services and dog licenses to township residents and animals. If a township resident has a concern regarding a domestic animal, the City is required to handle the situation.
Parks and Recreation: The Board of Commissioners at Oak Park, Illinois agreed to enter an interlocal agreement with the Parks and Recreation Department of Oak Park, River Forest and Elmwood Park through December 31, 2020 to manage soon-to-be-consolidated recreation programs for the three municipalities.
Public Transportation: The Village of Glencoe, Village of Northbrook, Villages of Skokie, Wilmette, and the City of Evanston are party to an intergovernmental agreement to establish the North Shore Council of Mayors.
Regional Economic Development: An intergovernmental agreement between the City of Highland Park, City of Skokie, and the City of Waukegan established the Red Line Extension Transportation Improvement Project (RTE TIP). The RTE TIP is a cooperative planning department intended to create a comprehensive regional coordination of the proposed extension of the CTA Red Line North branch from its current terminating location at Howard Street to a new terminal station in the City of Waukegan.
How to Draft an Effective Interlocal Agreement
The first step in the drafting process is negotiation and agreement between the parties to the project. It is important to take this step seriously, as the agreement will become the cornerstone of the relationship between the parties. The mere fact that a party is legally obligated to fund a project does not mean that it has any intention of doing so, especially where that party has no lawful authority to expend funds for such purpose. Also, simply because a party agrees to expend funds does not mean that it can do so without first obtaining the necessary approvals from its governing body. Too often I have seen an agreement entered into by one or more parties that has subsequently fallen apart because one of the participants was not legally empowered to enter into the agreement. However, the agreement may still be enforceable to the extent funds were expended, so some due diligence in the negotiation stage is advisable.
One of the most important things any attorney can do to expedite the process is to have a checklist of the specific steps that need to be taken to obtain final approval of the interlocal agreement. What I mean by "steps" are merely the ministerial acts required by law such as that the agreement be: (i) approved by each participant’s governing body; (ii) executed and then recorded; (iii) reviewed and approved by the Department of Community Affairs ("DCA"); and (iv) filed with the clerks of each participant. Having a checklist of the process to be followed is very helpful for both the professional and lay person responsible for the end product. It also helps to distinguish between the various roles of the participants in the process.
The agreement itself should include a brief statement of the background facts leading to the adoption of the agreement. The purpose of the agreement should be stated. The financial obligations of each participant should be clearly delineated, and the importance of each participant following its budget cycle to appropriate funds cannot be overstated. The agreement should be signed by each of the duly authorized representatives of the parties before the statutory time frame for recording. It should also include language directing the clerks of each municipality to record and file the agreement.
When necessary, attorneys should be diligent in securing a review of the agreement by the DCA, especially where the agreement has the potential to obligate local governments to incur unknown costs in the future. Such agreements can be fraught with potential problems, since some local governments have not had the benefit of consulting with their attorneys in negotiating the agreement, and may not understand the potential problems.
Future Trends in Interlocal Agreements
A noteworthy trend over the past few years involves city and county sponsors working collaboratively to address air quality issues. By design, air quality laws and regulations cross jurisdictional borders. As a result, interlocal agreements have been developed to provide for collaborative air quality planning and improvement—and, of course, to address resource needs and allocation. In this effort, local jurisdictions have worked together to address air quality with an eye towards regional approaches. Regional relationships between cities and counties will likely continue to increase in importance.
For example, the City of Seattle and King County developed and implemented a joint program that permits, regulates, and inspects regulated swimming pools. King County provides the technical staff and oversight function on the County level; while , the City of Seattle retains non-regulatory oversight. Having the City and County conduct swimming pool inspections through a joint program provides a more comprehensive system to manage potential public health problems in both the City and County. Plus, the program is efficient by eliminating duplicative work and help the City and County to save significant resources over the long-term.
Changes in technology will also continue to impact and shape interlocal agreements. Local governments have increasingly collaborated on virtual platforms for a myriad of purposes. For example, local governments have increasingly collaborated on data collection and use of that data to determine regional issues. Another example includes local government collaboration with private sector companies on the collection of data and use of that data for a variety of purposes (such as shared street maintenance systems). Over time, these interlocal relationships will likely result in new and creative uses of shared data.