What Exactly is an Interlocal Agreement?

Interlocal agreements are powerful tools that allow for cooperation between different levels of government. These contract-based agreements often provide valuable mechanisms for undertaking infrastructure and other capital projects, providing public services, and sharing administrative functions. The relevant statute, N.C.G.S. 160A-460, in addition to laying out specific requirements that must be met for an interlocal agreement to be legally enforceable (such as the execution by the governing body and a maximum duration of 50 years), defines an interlocal agreement generally as "an agreement entered into by two or more public agencies in furtherance of their common governmental purposes." These agreements are legally defined in subject as follows:

• Any of the activities listed in G.S. 160A-461(a)(1), (a)(2), (a)(6), and (a)(7). (a) is the provision of a particular service , facility or function that shows no duplication and (b) is that both governmental units have a statutory option to provide that particular service or function;
• A single service, facility or function that the domestic units have a statutory option to provide but where the selected service, facility, or function would require an annexation that is optional for one of the units; and
• Other lawful purposes not identified in (1) and (2) above so long as there is no duplication of services.

Before entering into an interlocal agreement, the participating governmental units must determine whether it is economically feasible for them to provide the required services separately. Here, economic feasibility refers to whether the participating governments can maintain the required services independently and whether they could potentially benefit from the advantages offered by an interlocal agreement.

Advantages of Interlocal Agreements

Interlocal agreements can also provide municipalities with the ability to share in valuable resources that would not otherwise be available. For example, a small municipality may not be able to afford its own fire engine. By entering into an interlocal agreement with neighboring municipalities that also need access to a fire engine, a larger, cost-effective alternative can be developed. Similar programs exist for municipalities to share other resources, and interlocal agreements can be formed, as authorized by Florida Statute Section 163.01(7)(g), to facilitate sharing of "equipment, personnel, and facilities."
Interlocal agreements can also provide benefits to municipalities by providing funding opportunities. For example, a large, multi-jurisdictional water system is generally more attractive than a single, smaller municipal water system. This is particularly true in rural communities when compared to larger, urban communities. Florida Statute Section 163.01(7)(j) specifically identifies "joint funding of economic development activities" as a benefit provided through an interlocal agreement. Take for instance a four-party interlocal agreement between three rural counties and a regional utility that provides utility services to each of the respective counties. The regional utility provides grants to each of the rural county-utility systems for utility system upgrades that are then funded by the regional utility. Because the regional utility is a large multi-jurisdictional system, it can afford to fund utility upgrades which alone would be cost prohibitive for each county-utility system to undertake.

Common Applications of Interlocal Agreements

Municipalities and other public bodies often find that agreement with other governmental entities can prove valuable to both parties. Such agreements allow partners to share resources and cut through the red tape associated with bidding and contracting, thereby benefitting their local taxpayers. Interlocal agreements are frequently used in contexts such as: Joint Emergency Services: Hospitals, law enforcement, fire departments, and other emergency services sometimes enter into interlocal contractual agreements to share resources or provide mutual aid. Infrastructure Projects: Interlocal agreements can facilitate the construction and maintenance of infrastructure improvements. Public Transportation: Interlocal agreements to establish, continue, or maintain mass transit systems sometimes involve more than one public body. Municipal Courts: Municipal courts are sometimes formed by interlocal agreements between two or more municipal corporations. Collection of Public Utilities: Local governments may wish to work together to encourage the development of public utility infrastructure. Public Library Systems: Public libraries often enter into interlocal agreements.

Legal Basis for Interlocal Agreements

The establishment and execution of interlocal agreements is predicated by a legal and regulatory framework that is designed to ensure such ventures are legally sound and in meeting the public interest requirements of this type of agreement. At the most basic level, interlocal cooperation agreements are guided by Florida Statute 163.01, an intergovernmental law that governs such agreements. Under this law, two or more governmental agencies can enter into an agreement for joint cooperative action for any purpose that each of the participating parties is enabled to perform individually. While many local governmental entities operate under this statute, the Florida Constitution expressly authorizes such agreements between counties, municipalities, school boards, and other units of local government. Therefore, most local governments have the general authority to enter into such agreements, provided that their respective charters do not prohibit them.
Interlocal cooperation agreements must specify the purpose, powers, rights, obligations, terms, funding, termination, and the manner of withdrawal of members of the agreement. The agreement may also govern other matters as deemed necessary by the participating governmental entities. No added requirements exist under the statutes for interlocal agreements that establish multi-county entities, but such agreements are often subject to additional application requirements under the Florida Governmental Cooperation Law. Under this law, a government agency may file an application for the establishment or continuation of a multi-county entity with the Department of Economic Opportunity. The department also publishes interlocal agreements for review by other agencies and coordinates the concept development of the proposed agreement. Government agencies proposing such multi-county entities generally have no authority to take final action on such agreements without specific statutory approval. Additional rules may apply to a city-created special district seeking to enter into an interlocal agreement that includes a county or other special district, particularly with financing or consolidation.

How to Prepare an Interlocal Agreement

An interlocal agreement must specifically state the purpose of the agreement, the manner and extent to which the participating governments will participate, the method for financing the agreement, and the organization, personnel and administrative structure necessary to implement the agreement. The participating governments have to mutually agree to the terms. Among the options available for the organization of a new entity for the services or functions under the interlocal agreement are a non-profit corporation, a governmental agency , a partnership or a limited liability company.
Of course, the purpose of the interlocal agreement can only be achieved if the governments act within the authority granted to them by the legislature. If the services or functions created under the interlocal have not been authorized by the legislature, the agreement creates no obligation on any of the parties. If the services or functions have been authorized, then the parties must act, as their capabilities allow, in reasonable anticipation of their legislatively granted authority to accomplish their mutual goals.

Disputes and Resolution of Interlocal Agreements

Disagreements can arise in any agreement, and interlocal agreements are no exception. Disputes may occur between local governments regarding the division of responsibilities or costs under the agreement. Other potential conflicts include the impact of changes in state law on the resources and authority of local governments. Because local governments are creatures of state law, unexpected litigation among them may be brought in state court. Where the agreement contains an arbitration clause, a private firm would be tasked with resolving the conflict. A key factor in maintaining cooperation is to recognize and respect each governmental entity’s vested interests. Negotiations and planning efforts can lay the groundwork for a solid collaborative relationship from the outset. Local governments should also proactively consider and include in the interlocal agreement procedures for revising or terminating the agreement as necessary. The Florida Interlocal Cooperation Act to some degree provides a framework for resolving conflicts among local governments in relation to interlocal agreements, including by authorizing interlocal dispute resolution boards comprised of local officials. However, only some local governments have adopted ordinances creating such boards.

Success Stories: How Interlocal Agreements Work

To appreciate the value of interlocal agreements, consider these three successful examples:

1. The Florida Department of Children and Families Regional Partnership Grants Program

The Florida Department of Children and Families (DCF) awarded more than $20 million in Regional Partnership Grants (RPG) grants to 21 community-based partnerships. Funding was awarded to teams of child welfare agencies and other stakeholders, such as members from education, health care, mental health and the faith-based community, that work together to achieve positive outcomes for children and families. Grants are intended to support the development of partnerships working to improve outcomes for children who are dependent, neglected or abused, and currently reside in a foster care setting or are at risk of entering or re-entering foster care. RPG awardees use funding to help children and families gain access to services that help families resolve barriers that contribute to abuse, neglect, and dependency.

2. Lake County Water Authority and the Southwest Florida Water Management District

In October 2014 , the Lake County Water Authority and the Southwest Florida Water Management District entered into an interlocal agreement for the purpose of establishing guidelines for cooperative management and funding for the Cannonsville Sub Regional Cooperative Management Project. The Cannonsville project involves the replacement of the administration buildings on the property. The primary government participants include the Lake County Water Authority, the Lake County Property Appraiser and the Southwest Florida Water Management District. Supporting government participants include or may include Lake County, the Lake-Sumter State College, the Lake County Board of Realtors and/or other Florida counties that have similar interest.

3. Collier County Government and Naples City Government

The City of Naples and the County of Collier have entered into an interlocal agreement for Dual Certification of new Electric Lineman. This is a cooperative labor agreement by and between the City of Naples, a Florida municipality, and the County of Collier, a political subdivision of the State of Florida, for the sole and limited purpose of establishing the terms and conditions under which certain employees of the City of Naples will, when scheduled, be permitted to work on an on-call basis to supplement the electric lineman work force of Collier County Government and /Or the Naples Utilities Department.