By: Rebecca Weltmann
For the past few decades, municipalities throughout the state of New Jersey have engaged in interlocal service agreements with neighboring communities and counties. Recently, the state has further encouraged such agreements as a piece of the puzzle to help solve the state’s property-tax crisis.
For governing bodies towns, schools, counties to enter into an interlocal service agreement, willing partners must agree on both the service and terms under which it is to be provided. Often, a feasibility study is done to determine how a service could be shared. According to state Department of Community Affairs spokesperson Chris Donnelly, a contract then specifies the details, terms and conditions. The agreement is then authorized by resolution by each participating body.
"Sharing services is a way to stretch budget dollars and a vital component of Gov. Corzine’s property-tax reform," Mr. Donnelly said. "Two or more local units can do things more economically or more efficiently than a single community."
New Jersey and its neighbors use a number of agreements, such as the NY-NJ Port Authority and the Delaware River Port Authority, to address joint services or issues that affect the region, he added. Mainly, though, interlocal service agreements occur between neighboring town governments, a municipality and its school district or a school district and a neighboring school district.
As a method of further encouraging more towns to look into sharing services, the state offers grants for interlocal shared-service agreements. The DCA administers the SHaring Available Resources Efficiently (SHARE) program, which provides feasibility study grants to assist with the one-time start up or transitional costs in establishing a new shared-service program.
Three years ago, for example, Plumsted Township received a $39,000 grant to enter into a shared-service agreement with the school district for use of the information technologies department. Last summer, the DCA awarded Washington $100,000 in extraordinary aid because of township’s efforts in forming and maintaining over a dozen service agreements.
"Shared services can result in cost savings, though every service and every sharing situation is different," Mr. Donnelly said. "Some will bear immediate results, others may take longer to produce significant savings. Shared services are another tool available to local officials to help control costs and maintain services."

