Monday, October 5, 2009

Michigan Laws that Impede Greater Efficiency through Collaboration

Running our governments more efficiently is a laudable goal of many public servants and politicians.

The Citizens Research Council examined Michigan laws and the city charters to investigate potential legal impediments that would limit the ability of communities to expand collaboration. Here are some excerpts from their report Streamlining Functions and Services of Kent County and Metropolitan Grand Rapids Cities, October, 2009.

“Difficult economic conditions are forcing local government officials to reconsider the standard methods of performing functions and providing services. Officials have three options to deal with the fiscal and operational pressures on local governments: 1) increase taxes to yield more revenues; 2) cut spending to meet available revenues; or 3) find alternative methods of providing services at current levels for less money. The first two options can negatively affect the attractiveness of any single municipality relative to its neighbors. They would either increase the cost of residing and operating a business in the municipality or diminish the menu and/or level of services provided. Intergovernmental collaboration provides local governments with alternative methods of performing functions and providing services.” Page i.

“The 2007 CRC Report, Authorization for Interlocal Agreements and Intergovernmental cooperation in Michigan, found 77 specific laws, or provisions of laws, that authorize intergovernmental collaboration. Some laws broadly authorize collaboration for any services that local governments are authorized to provide independently, other laws authorize collaboration for the provision of specific functions or services.

Laws that Impede Collaboration

Those laws were implemented to authorize collaboration among local governments, but provisions in some of these laws severely limit the ability of local governments to come together for joint service provision.

Employee Protection Provisions

Employee protection provisions contained in six separate laws prohibit local governments from using intergovernmental collaboration to displace employees currently engaged in providing the functions or services that are proposed for joint provision. The provisions state that employees affected by transfer because of collaboration should not be put in any worse position relative to worker’s compensation, pension, seniority, wages, sick leave, vacation, health and welfare insurance, or any other benefits that were provided as an employee of one of the merging government service providers. The result of these provisions is that intergovernmental collaboration cannot be used effectively to reduce the size of municipal staffs. In fact, because of these provisions, consolidated service provision may cause the cost of that service to increase rather than decline.

The Urban Cooperation Act, for instance, provides:

“No employee who is transferred to a position with the political subdivision shall by reason of such transfer be placed in any worse position with respect to workmen’s compensation, pension, seniority, wages, sick leave, vacation, health and welfare insurance or any other benefits that he enjoyed as an employee of such acquired system.”

Government tends to be a labor intensive enterprise for many services. It is especially labor intensive for the public safety services – police and fire protection – that consume the majority of the budgets for full service local governments. Laws that hinder the ability to achieve savings through collaboration put public officials in the difficult position of needing to reduce the service levels or eliminate those services completely to achieve savings.

Laws that Make Collaboration More Difficult

Certain other laws do not directly create impediments to collaboration, but either through their construction or their omission makes collaboration more difficult for the local policymakers that must make difficult decisions when initiating collaborative services.
  • Public Act 336 of 1947, the Public Employment Relations Act (PERA) requires employers and representatives of employees to “…confer in good faith with respect to wages, hours, and other terms and conditions of employment…” [emphasis added]

    This wording has been interpreted to mean that the duty to bargain extends to the public employers diversion of work to non-unionized employees or to outside contractors. Thus local governments currently engaged in the provision of a service must submit to collective bargaining potential actions to provide that service collaboratively with another governmental unit or through non-governmental contractors.

    Further, Public Act 312 of 1969 submits interest or contract formation disputes between public employers and public safety employees to binding arbitration, as well as issues arising during collective bargaining negotiation over the terms to be included in a new contract. Thus, local governments considering collaboration for the provision of police or fire protection must consider the possibility of those changes to the conditions of employment being subjected Act 312 binding arbitration.

  • Public Act 116 of 1954, the Election Law, permits intergovernmental collaboration agreements to be used as a cause for recall efforts against elected officials.

  • Under Public Act 279 of 1909, the Home Rule Cities Act, several cities have amended their charters to create minimum staffing requirements for their police and/or fire departments. Such provisions preclude collaboration as a viable tool for seeking efficiencies in government operations.

  • Finally, Public Act 206 of 1893, the General Property Tax Act could be amended to facilitate greater tax base sharing. As long as local government officials are driven by the need to expand the tax base, the goal of new development will outweigh the benefit of collaboration.

Reform of these laws would better enable local government officials to make structural changes to the methods of providing government services and create an atmosphere in which leaders think beyond the boundaries that define their local governments.” Pages 7 and 8.

These laws must be examined for either repeal or modification to allow our tax dollars to be more effectively and efficiently spent.


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