Intergovernmental Service Arrangements For

156 Pages·2004·7.49 MB·English

Intergovernmental Service Arrangements For
Delivering Local Public Services:
Update 1983
Advisory Commission On
Intergovernmental Relations
Washington, DC 20575
October 1985

INTERGOVERNMENTAL SERVICE ARRANGEMENTS FOR
DELIVERING LOCAL PUBLIC SERVICES:
UPDATE 1983
A Report to the
U.S. DEPARTMENT OF
HOUSING AND URBAN DEVELOPMENT
by the
U.S. ADVISORY COMMISSION ON
INTERGOVERNMENTAL RELATIONS
under
Interagency Agreement
I AA-H-32-83
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FOREWORD
Intergovernmental contracting is one of those subjects that a t first
blush doesn't appear to be an important topic. Yet, nothing could be further
from the truth. It is well worth taking a minute to outline some of the
reasons why we should pay particular attention to this issue.
First, the rich array of contracting that our study and others have
found indicates an inherent rationality on the part of local officials to
seek economical and efficient ways to deliver local government services.
Whether through private contract, contract with other governments or through
the creation of joint power agencies, we find a creative inventiveness on the
part of local governments. One merely has to read through the studies under-
taken by the Workshop for Political Theory and Policy Analysis at Indiana
University on the provision of police services in the United States to see
how coordination and economic services are provided through voluntary agree-
nents. From mutual aid agreements to contracting with regional crime labs,
local governments demonstrate more times than not effective solutions to
joint problems. These findings are a far cry from the description of local
govermaents by reformers as being chaotic and uncoordinated. Second, con-
tracting makes small local government not only possible but also feasible.
This point was best stated by the Federalists when they argued that one of
the virtues of the Republic was that it allowed for large scale government to
undertake those functions that were national i n scope while allowing smaller
-- --
governments state and local governments to undertake those functions
appropriate to their competence. Contracting i n a most basic sense increases
the capacity of local governments, allowing them to overcome one of the long
standing arguments against them: that they could not operate efficiently
because they could not realize economies of scale. By contracting, small
local governments can realize economies of scale as well as negotiating for
particular services. Contracting thus creates the possibility of small scale
units of government whose main role Is political. Political i n the sense of
articulating the demands of its citizens, while the production of services is
-- --
done not through traditional public agencies but rather through a num-
ber of service delivery mechanisms.
Third, contracting provides the possibility of solving large scale
problems through joint action by a number of small governmental entities.
Metropolitan crime labs exist in part because they rely on the purchase of
services by smaller governments. Ten fire departments i n metropolitan Sacra-
mento contract with a larger fire department for an integrated fire network
and emergency number. Singly none of these departments could have provided
--
the service yet each maintains a say on how the service is produced.
Finally, contracting is one of the keys to alternative service delivery,
an issue that looms large on the intergovernmental horizon. For as local
governments seek to experiment with different ways of delivering services,
they surely w i l l use contracting as one method of implementing those experi-
ments. As the preface to this, study indicates, intergovernmental contracting
and alternative service delivery will be research topics of top priority to
the Commission in the coming years. This study updates our past work and
lays the ground for more detailed studies; it was adopted by the Commission
on December 6, 1984.
The founding fathers would have thought contracting an ingenious device
--
one that links the virtues of smallness with the abilities of largeness.
And this is one of the questions that we will have to explore in the future:
does contracting encourage the emergence of small scale government, with its
democratic virtues?
Robert B. Hawkins, Jr.
Chairman
PREFACE AND ACKNOWLEDGMENTS
With this report, ACIR begins a reevaluation of the role and performance
of local governments i n the American federal system. It examines two specif-
--
i c local government arrangements interlocal contracting and transfers of
--
functions under the broad subject area oE intergovernmental service ar-
rangements. This has been a matter of interest to the Advisory Commission on
Intergovernmental Relations since its first report on intergovernmental coop-
eration in 1961.
While these two mechanisms are important options i n service delivery
systems, they are by no means exhaustive. In a time of Fiscal constraints,
declining federal aid, and the memory of taxpayer revolts, it is imperative
that any ~~echanisnwsh ich can increase the efficiency and effectiveness of
local governments in delivering basic public services be considered. Forth-
coming ACIR studies w i l l extensively explore other alternatives.
This report reviews the constitutional and statutory authority for in-
terlocal corltracting and service transfers. It notes considerable progress
i n expanding local authority, not only for joint agreements and interlocal
contracting, but also for actual transfers of responsibility among local
governments. In the latter case, while more states have authorized such
transfers, they are generally subject to stricter regulations than were found
in a 1974 survey.
The Commission believes that states need to encourage rather than in-
hibit interlocal contracting and cooperation. At its meeting on December 6,
1984, the Commission urged that states authorize functional transfers among
their political subdivisions, and that such authorization be broadened to
include transfers to the state governments. The Commission also recommended
that states examine their laws authorizing local governments to contract with
other governments or for private service delivery and eliminate any stringent
procedures and conditions that are unnecessary to protect the public interest.
Because the report focused primarily on only two alternative service
delivery mechanisms, the reader should keep in mind its limited context. The
report does not consider recent experiments by a number of jurisdictions with
alternative service finance/delivery mechanisms. Those innovations suggest
that there is considerable potential for improved service at lower costs and
higher level of citizen satisfaction through a variety of options other than
direct public production financed by taxes.
Two forthcoming ACIR studies w i l l explore this subject area. One,
entitled Local Political Economies: The Structure and Performance of Local
Governments, will seek to determine how the structure and organization of
local governments enhance or impede the efficient and responsive provisions
of public services to serve the diverse needs of citizens at the local level.
The second study w i l l focus more narrowly on alternative mechanisms of fi-
v i i
nance and delivery of local public services. This study w i l l place the two
specific alternative delivery arrangements examined in this report in the
context of the entire array of alternatives available to local governments:
user charges, private sector coni:racting, special districts, franchising,
vouchers, and market mechanisms of various sorts, to mention just a few.
The reader should also be apprised that the survey for the accompanying
study produced some surprising findings. For example, the study found that
use of interlocal agreements appears to be on the decline, although most
observers believe it is increasing. Two explanations may account for this.
First, some displacement of government-to-government arrangements has proba-
bly taken place due to the increase of both joint service agreements and
private sector contracting. Second, because a mail survey was employed (a
field survey being far beyond the Commission's resources for this particular
study), it probably was not sensitive enough to pick up certain mitigating
phenomena. For example, as various interlocal service agreements become
institutionalized within local governments, many of the local personnel no
longer perceive them distinctly as intergovernmental arrangements. Local
sewer hook-ups with a larger metropolitan sewer system are illustrative of a
colnmon type of interlocal arrangement frequently not perceived as such, and
thus often unreported on mail surveys.
Despite these limitations, we believe the picture of interlocal arrange-
ments revealed by this report is important. It serves as a useful beginning
for a broader examination of local governments, and establishes a framework
for future Commission reports.
This report was prepared under the direction of S. Kenneth Howard, for-
mer executive director, and David B. Walker, former assistant director for
government structures and functions. Albert .J. Richter was the project
nanager. ACIR Fellow Ann Martino was responsible for Chapter 3, for design
of the survey instrument and for the literature research. ACIR Fellow Lori
Henderson prepared the initial draft of Chapters 4 and 5 and assisted in the
legal research for Chapter 3 and i n the literature research. Secretarial
services were rendered by Michelle B. Simms.
The survey of city and county officials was conducted under contract by
the International City Management Association.
John Shannon
Executive Director
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