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Municipalities Given Greater Flexibility To Share Services

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Nichole Jongsma Derks & Ronald D. Richards Jr.
Foster Swift Municipal Law News
January 2012

Governor Snyder recently signed into law several new laws, 2011 PA 258 to 263, that aim to remove confusion some felt existed in the current inter-governmental agreement laws and streamline how municipalities can work together to share services.  These laws were given immediate effect.  They are designed to give municipal officials improved options when deciding how to spend their limited resources and in collaborating to provide desired services.

Some of the highlights of the new laws are below:

  • Allowing two or more local governmental units, or one governmental unit and one public agency, to enter into a "joint endeavor" contract to perform any function either could exercise individually; and identifying the funding options available for those functions.  2011 PA 258.
  • Explaining what a joint endeavor contract must include, such as the purpose of the joint endeavor; the duration of the contract; a description of the authority created; and designating or selecting officers. 2011 PA 258.
  • Clarifying what a shared service contract may include, such as how revenues will be allocated, the protocol for making claims for federal or state aid payable to the authority; how proceeds of grants, gifts or bequests to the authority will be invested; and division of surplus revenue. 2011 PA 263.
  • Lifting the former requirement that prior labor contracts be retained when a new joint authority is created. Instead, employees who are transferred to a new joint authority will be subject to their previous employment terms until those terms are amended by law, or for six months after the transfer to the authority, whichever is earlier.  2011 PA 261 and 262.

The new public acts give municipal leaders greater flexibility to work together.

If you are considering sharing services and have questions about how to go about it, please contact Ron Richards or Nichole Derks.