Background. INTERGOVERNMENTAL COOPERATION AGREEMENTS MICHIGAN Survey of State Law

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1 INTERGOVERNMENTAL COOPERATION AGREEMENTS MICHIGAN Survey of State Law Background In the face of declining resources and increasing demand for services, many local health departments (LHDs) are exploring innovative ways to improve efficiency, meet accreditations standards, and reduce costs by sharing service delivery and other functions with other LHDs, agencies, and entities. One method for such cross-jurisdictional collaboration is the utilization of state interlocal agreement acts. These acts permit localities to enter into agreements with other entities to provide health and other services, and govern the terms of those agreements. Many permit the creation of new entities to accomplish public health goals. The goal of these acts is, as stated for example by Florida s Interlocal Cooperation Act, to permit local governmental units to make the most efficient use of their powers by enabling them to cooperate with other localities on a basis of mutual advantage and thereby to provide services and facilities in a manner and pursuant to forms of governmental organization that will accord the best geographic, economic, population, and other factors influencing the needs and development of local communities. Fla. Stat In 2012, with the extremely helpful assistance of pro bono attorneys from the firm of McDermott Will & Emery LLP and the Iowa Health System, the Network conducted a survey of intergovernmental cooperation laws currently in effect in all 50 states. The results of that survey are provided below. Please be advised that this table should be used only as a guide. While we do not know it to contain any errors, we do know that it is incomplete. We also caution that in many cases other laws and regulations may be used to share services and personnel between organizations and such actions may be permissible even without explicit enabling legislation. We strongly suggest that interested persons and entities contact us for assistance in this complicated area of law.

2 Michigan Intergovernmental Cooperation Agreements Summary As of September 2013 Urban Cooperation Act of 1967 Michigan Compiled Laws; Ch. 124 Municipalities MCLS , No Can entities enter into agreements? ; If Yes: Michigan law on municipalities permits the joint exercise of powers between a public agency of the state and any other public agency of Michigan, any other state of the United States, a public agency of Canada or any public agency of the United States government. The joint exercise of powers can include any power, privilege or authority that the agencies share in common and that each might exercise separately. Mich. Comp. Laws Ch A joint exercise of power may occur by contract in the form of an interlocal agreement, which may provide for: (a) the purpose of the interlocal agreement or the power to be exercised and the method by which the purpose will be accomplished or the manner in which the power will be exercised; (b) the duration of the interlocal agreement and the method by which it may be rescinded or terminated by any participating public agency prior to the stated date of termination; (c) the precise organization, composition, and nature of any separate legal or administrative entity created in the interlocal agreement with the powers designated to that entity; (d) the manner in which the parties to the interlocal agreement will provide for financial support from the treasuries that may be made for the purposes set forth in the interlocal agreement, payments of public funds that may be made to defray the cost of such purpose, advances of public funds that may be made for the purposes set forth in the interlocal agreements and repayment of the public funds, and the personnel, equipment, or property of one or more of the parties to the agreement that may be used in lieu of other contributions or advances; (e) the manner in which funds may be paid to and disbursed by any separate legal or administrative entity created pursuant to the interlocal agreement; (f) a method or formula for equitably providing for Can new entity be created? ; If Yes: Is new entity limited in duration? Can new entity issue bonds? Does new entity have taxing authority? Yes. A new entity can be created. Mich. Comp. Laws Ch (1)(c) (the interlocal agreement may provide for the precise organization, composition, and nature of any separate legal or administrative entity created in the interlocal agreement with the powers designated to that entity ). Yes. The interlocal agreement may limit the duration of the new entity, but it is not required to do so. Mich. Comp. Laws Ch (1)(b) (the interlocal agreement may provide for the duration of the interlocal agreement [which can set up a separate legal or administrative entity] and the method by which it may be rescinded or terminated by any participating public agency prior to the stated date of termination ). The Michigan Attorney General has issued an opinion that local units of government may not join together to create an authority with power to zone land, as legislative bodies of local government may not delegate their legislative functions. However, administrative functions associated with zoning may be delegated to a joint public agency if the municipalities involved are subject to the same zoning act. Op Atty Gen, June 14, 1978, No There is substantial additional information in the statute on obtaining a voluntary mutual agreement or otherwise obtain the of labor organizations to the extent the joint exercise of power impacts the rights of public employees who are under a collective bargaining agreement. See Mich. Comp. Laws Ch (3). Page 2

3 Can entities enter into agreements? ; If Yes: Can new entity be created? ; If Yes: Is new entity limited in duration? Can new entity issue bonds? Does new entity have taxing authority? and allocating revenues revenues derived by or payable to any participating party or any other public agency which revenues directly or indirectly result from that undertaking, whether the revenues are in the form of ad valorem taxes on real or personal property, taxes on income, specific taxes or funds made available by the state in lieu of ad valorem property taxes or local income taxes, any other form of taxation, assessment, levy or impost, or any money paid under or which revert from a tax increment financing plan [see statute for substantial additional detail on the funding formula]; (g) the public agency that will function as the employer of personnel and staff needed for the joint exercise of power; (h) the fixing and collecting of charges, rates, rents, fees, loan repayments, loan interest rates, or other charges on loans, where appropriate and the making and promulgation of necessary rules and regulations and their enforcement by or with the assistance of the participating parties to the interlocal agreement; (i) the manner in which purchases shall be made and contracts entered into; (j) the acquisition, ownership, custody, operation, maintenance, lease or sale of real or personal property; (k) the disposition, division or distribution of any property acquired through the execution of such interlocal agreement; (l) the manner in which, after the completion of the purpose of the interlocal agreement, any surplus money shall be returned; (m) the acceptance of gifts, grants, assistance funds, or bequests and the manner in which those gifts, grants, assistance funds, or bequests may be used for the purpose set forth in the interlocal agreement; (n) the making of claims for federal or state aid payable to the individual or several participants on account of the execution of the interlocal agreement; (o) the manner of responding for any liabilities that might be incurred through the performance of the interlocal agreement and insuring against any such liability; (p) the adjudication of disputes or disagreements, the effects of failure of participating parties to pay their shares of the costs and expenses, and the rights of the other participants in such Page 3

4 Can entities enter into agreements? ; If Yes: Can new entity be created? ; If Yes: Is new entity limited in duration? Can new entity issue bonds? Does new entity have taxing authority? cases; (q) the manner in which strict accountability of all funds shall be provided for and the manner in which reports, including an annual independent audit, of all receipts and disbursements shall be prepared and presented to each participating party to the interlocal agreement; (r) the manner of investing surplus funds or proceeds of grants, gifts, or bequests to the parties to the interlocal agreement under the control of a legal or administrative entity; and (s) any other necessary and proper matters agreed upon by the participating public agencies. Mich. Comp. Laws Ch (1). If the purpose of the interlocal agreement is the acquisition, construction, or operation of a revenue-producing facility, the agreement may provide for the repayment or return to the parties of all or any part of the contributions, payments, or advances made by the parties and may provide for payment to the parties of any additional sum or sums derived from the revenues of the facility irrespective of whether such contributions, payments, or advances are required to be paid, repaid, or returned from revenues of the facility. Payments, repayments, or returns shall be made at any time and in the manner specified in the agreement, and may be made at any time on or prior to the rescission or termination of the agreement, or completion of the purposes of the agreement. Mich. Comp. Laws Ch Page 4

5 SUPPORTERS The Network for Public Health Law is a national initiative of the Robert Wood Johnson Foundation with direction and technical assistance by the Public Health Law Center at William Mitchell College of Law. This document was developed by Corey Davis, Staff Attorney with the Network for Public Health Law Southeastern Region (cdavis@networkforphl.org) and Milissa Markiewicz, Project Manager with the with the Network for Public Health Law Southeastern Region in conjunction with pro bono attorneys from McDermott Will & Emery LLP and the Iowa Health System. The Network for Public Health Law provides information and technical assistance on issues related health. The legal information and assistance provided in this document does not constitute legal advice or legal representation. For legal advice, please consult specific legal counsel. Page 5