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Interlocal
Services Agreements
Elements
of an Interlocal Services Agreement
An agreement between two or more local units regarding
the provision of a service is no different from any other contract executed
by a local government. An Interlocal Services Agreement reflects the standard
contract formula by enumerating the duties, roles and responsibilities
of the contracting parties, in addition to detailing how payment for the
service may be accommodated.
There is no set form for such an agreement. However,
the Interlocal Services Act, at N.J.S.A. 40:8A-6, identifies the basic
elements of any interlocal agreement. These elements include:
- Nature of the service.
- Performance standards and the assignment of responsibility.
- Cost allocation.
- Duration of the contract.
- Procedure for payment.
The contract should clearly and concisely detail the "who,"
"what," "where," "when," "how" and "how much" of the interlocal activity.
Simplicity of statement should be the watchword. Overly complex language,
albeit impressive to some, increases the potential for confusion. The following
list containes elements which should be considered where appropriate in
drafting an Interlocal Services Agreement. The list is not finite. Its purpose
is to increase the level of awareness of the types of elements an interlocal
agreement could include. Your interlocal contract should be tailored to
meet the unique needs of your particular situation.
PURPOSE
- A clear and concise statement of the exact nature of
the service to be performed by the Provider or to be performed jointly
by the parties to the agreement.
- Stipulate the services to be performed. Use plain language
devoid of jargon. The use of simple declarative sentences is best.
- Who will be doing what?
- What elements related to the primary activity are not
to be included?
- Detail the scope of services to be provided. Differentiate
those services to be provided as a matter of course and those which
require a specific request.
TERM
Identify the length of the contract. The Law provides that
unless otherwise stated in the Agreement, the term of the contract shall
be for a period of seven (7) years.
COURT TESTIMONY
The enforcement side of the service being provided may require the Provider's
staff to be present in Court. The Agreement should state whether this is
a "normal" part of the service or is something extra. If the latter, the
Agreement should speak to the fee for this service.
HOURS OF SERVICE
Clearly identify when the service is to be provided. When will the provider
be available? What about overtime? What happens if the scheduled service
cannot be provided at the appointed time?
COMPENSATION/CONSIDERATION
- Identify the cost of such services throughout the duration
of the contract.
- What provision has been made for the periodic modification
of the fee for services or an updating of the fee formula based upon
actual experience or in accordance with specific procedures identified
in the contract?
- Provide for a periodic review of the fee schedule based
upon real time experiences.
- How is the cost to be allocated between/among the parties?
In dollar amounts or by formula? What is the basis for the formula --
population served, services received, assessed valuation or actual expenses
incurred?
- How are payments to be made? When are payments to be
made -- per diem, monthly, quarterly, once a year, or on a per service
provided basis?
- Establish a recordkeeping and reporting mechanism.
- Are fees collected to be used as an offset against
the cost of the service? If not, how will fees be distributed?
- Is there to be a separate charge for consumables?
- Are capital costs associated with the service to be
shared? If yes, on what basis?
- If there are start-up costs, are they to be shared?
If yes, on what basis?
INDEMNIFICATION
Is there a need for the Recipient of the service to indemnify
and hold harmless the Provider of the service from any and all claims, demands,
losses, damages, injuries, suits, penalties, costs, liabilities and expenses
(including but not limited to, reasonable investigation and legal expenses)
for personal injury to property damage arising out of the provision of the
service? This might be particularly applicable in situations when equipment
is shared among the members to the contract and there is a need to cover
the operation, use or storage of the vehicle or equipment while in the possession
of the recipient municipality.
INSURANCE
Has the need for adequate insurance coverage, including Worker's Compensation,
motor vehicle and comprehensive general and public liability been addressed?
Should the policies name the Recipient as an additional insured party? When
equipment is shared among the parties to the Agreement, who is to assume
the risk of loss, theft or damage to the equipment once the Recipient takes
possession? Who is to assume the costs of repair and/or the full replacement
cost if the shared equipment is damaged, lost or destroyed while in the
possession of the Recipient?
DISRUPTION OR TERMINATION OF SERVICE
What is the responsibility of the Provider if there is a disruption in the
service schedule? Can the Recipient seek the services of a third party?
If so, who will cover the costs incurred? Consider permitting the suspension
of contractual obligations because of circumstances beyond the Provider's
control.
DISPUTE SETTLEMENT
Provide for binding arbitration, for binding fact-finding procedures or
other mechanisms to settle any disputes or questions which may arise between
the parties as to interpretation of the terms of the contract or the satisfactory
performance by any of the parties of the services and other responsibilities
provided for in the contract. AMENDMENT What provision has been
made for amending the contract as a result of increased costs or a change
in the level of service?
OVERSIGHT
- Who is responsible for supervising and reporting on
the contract's implementation? To whom and how frequently are the reports
made?
- What provisions have been made for an audit?
- When will the audit be performed? What areas will it
cover?
- What type of audit will be performed?
MEASURABLE STANDARDS OF PERFORMANCE
Has provision been made for measurable standards of the
level, quality and scope of such performance, with specific assignment and
allocation of responsibility for meeting such standards between or among
the parties?
PARTIES
Clearly identify the parties to the contract. What is the relationship between
the parties?
CONTRACT LIMITATIONS
Detail the priorities for the use of equipment or facilities
PERSONNEL
Who will hire and direct staff? Who will fire staff? Who disciplines the
staff? Specify the rights, privileges and immunities of the Provider's employees
working in the Recipient's jurisdiction.
PROPERTY
How will property acquisition be accommodated? Who will hold title? Will
funds from the disposition of jointly held assets be shared among the parties
to the contract? If so, on what basis?
EQUIPMENT
Inform the Recipient of any request for new or replacement equipment. Define
the rights of the parties upon the sale, transfer or exchange of equipment.
Does the Provider possess adequate equipment to undertake the service?
BONDABLE ITEMS
Before the purchase of any bondable items, the Provider should seek and
give due consideration to the advice and counsel of the Recipient.
REPORTS
Define the frequency, form, and content of the reports the Provider will
furnish. Identify the interval when reports describing the nature, amount
and cost of the service provided should be submitted.
MEETINGS
Establish a schedule for periodic meetings in order to unify policy and
facilitate solutions to common problems.
COMPLAINTS
Establish a mechanism for receiving, reporting and responding to citizen
complaints.
EMERGENCIES
What constitutes an "emergency" in terms of requiring that a service be
provided and/or in terms of when a service need not be provided.
FORMS
If special forms are necessary, who will provide them?
PERMITS
If permits are required to implement the service, does the Provider possess
the appropriate permit? Does the permit cover the time period the interlocal
contract will be operational? Who is responsible for paying the application
fee for the required permit? |
