INTERGOVERNMENTAL AGREEMENTS AND
INTERAGENCY SERVICE AGREEMENTS
- Intergovernmental Agreements
Two or more public agencies, by direct contract or agreement, may contract for services or jointly exercise any powers common to the contracting parties and may enter into agreements with one another for joint or cooperative action, so long as each agency
has been authorized by their legislative or other governing body. (A.R.S. § 11-952)
The Arizona Board of Regents (ABOR) is authorized to enter into Intergovernmental Agreements ("IGA") by the Arizona legislature (A.R.S. § 15-1625.B) and ASU has been authorized by the Board to enter into IGAs. (ABOR 3-204 and 3-808)
- Minimum prerequisites which must be set forth in an IGA are as follows:
- Duration;
- Purpose(s);
- The manner of financing the joint or cooperative undertaking and of establishing and
maintaining a budget;
- How a complete or partial termination of the agreement will be accomplished,
including disposal of any property that might be purchased or created through the
joint or cooperative undertaking; and
- Any other necessary and proper matters, i.e. the standard public agency contract
provisions.
Note: Payment for services under an IGA shall not be made unless pursuant to a fully approved written contract. Any person who authorizes payment of any monies in violation of the statutory provision regarding IGAs is liable for the monies paid
plus 20% of such amount and legal interest from the date of payment.
- Procedural requirements mandated by statute and ABOR policy:
- Prior to execution, University legal counsel must review to determine (a) that
agreement is in proper form and (b) that the purpose of the agreement is within the
University’s powers and authority granted to it under the laws of Arizona and the
Board of Regents. (A.R.S. § 11-952.D and ABOR 3-204.A.3)
- An attorney in the ASU Office of General Counsel must review an IGA even where
the other contracting party is a federal department or agency and no federal law
requires that an attorney for the federal department or agency review the agreement.
(A.R.S. § 11-952.E and ABOR 3-204.A.3)
- After approval as to form by the Office of General Counsel, the agreement is
forwarded to the President or his designee to sign the agreement on behalf of the
Arizona Board of Regents for and on behalf of ASU.
- If the value of the IGA exceeds $1,000,000 for the term of the agreement or any
renewal period, the agreement must be submitted to the Board of Regents for
approval.
- The fully executed IGA must be filed with the appropriate recording office:
Secretary of State:
if approved by the Attorney General’s Office
if more than one county is affected
Maricopa County Recorder’s Office:
if only one county is affected
- Arizona Attorney General interpretation of "contract for services" and "joint exercise of powers"
- The touchstone of an IGA is that it involves the joint exercise of a governmental
power or proprietary function common to the contracting parties. (Op. No. I85-050;
I83-057)
E.g. A water service subcontract between the United States, the Central
Arizona Water Conservation District and the subcontractor is not governed
by the Intergovernmental Agreement statutes because the subcontract
addresses the separate powers and responsibilities of each party under state
and federal reclamation law. The entities are exercising separate but
complementary powers. (I85-050)
- Even if all contracting parties are public agencies, an intergovernmental agreement
can only be used when each of the agencies has the power to perform the services or
action contemplated in the contract pursuant to which they agree to allocate
responsibilities between them. (I84-135) Once the capacity for joint exercise of
powers has been established, the public agencies may jointly exercise those powers
or contract to have one party perform the powers that are in common. (I83-057)
E.g. City of Tempe has the governmental power to build and improve streets;so does the Arizona Board of Regents. (A.R.S. § 15-1634). City of Tempe and
ABOR can enter into an IGA concerning the construction of improvements
to a roadway on or adjacent to university property wherein the agencies
allocate responsibilities, e.g. design, labor, supervision, equipment, payment,
amongst themselves.
E.g. A lease for a land parcel to be used as a school site between the BLM
and a school district is not subject to the intergovernmental agreement
statutes. Even though both parties have the statutory power to lease, such a
lease does not involve the exercise of joint or cooperative action nor is it a
contract for services. (I83-117)
- Public policy supporting the use of IGAs recognizes that public agencies are excused
from complying with competitive bidding requirements where two agencies are
charged with performing the same duties and it is economically efficient to avoid
duplication of services and allocate responsibilities between the parties. (I83-057)
However, a contract under which one agency merely procures a needed service from
another does not qualify as an IGA unless the parties are acting jointly to exercise
powers common to the parties. Id.
E.g. Any school district participating in the state purchasing program within
the Division of Finance of ADOA must execute an IGA with DOA. (I79-079)
E.g. Where agency receives, allocates, and disburses grants or funds made
available by U.S. government, corporations, foundations and other
businesses, agencies and individuals and provides accounting and auditing
and administrative procedures to assure proper fiscal management but has no
independent power to spend the funds for its own projects (the recipient
agency has the sole authority to utilize grant award); the agency is acting only
as a conduit in the transfer of funds and there is no common power between
the contracting parties. The intergovernmental agreement statutes would not
apply. (I79-193)
This latter category of agreement requires careful review of (a) the applicable
statutory or regulatory provisions and (b) the substance of what the parties are
agreeing to before a determination can be made on the applicability of the IGA
requirements.
- The Intergovernmental Agreement statutory provisions are cumulative and
supplemental and do not authorize any public agency to exercise any power or
engage in any business or enterprise that such public agency is not authorized to
exercise or engage in pursuant to other provisions of law.
- Interagency Service Agreements
- Interagency Service Agreements (ISA) are entered into between budget units. An
ISA may provide for reimbursement for services performed or advancement of funds
for services to be performed. (A.R.S. § 35-148.A) This provision is a funding mechanism.
- ISAs do not apply to money realized from the sale of personal property or from the
sale of real property or improvements thereon by the Arizona Board of Regents and
any of the state colleges. (A.R.S. § 35-148.C)
- "Budget unit" means any department, commission, board, institution or other agency
of the state organization receiving, expending or disbursing state funds or incurring
obligations against the state. The Arizona Board of Regents, ASU, ASU West, ASU
East, U of A and NAU are considered to be major budget units, as are: DES, DOC,
AHCCS, DHS, DPS, Community Colleges Board, the judiciary, DOA, Lottery
Commission, DEQ, ADOT and Dept. of Youth treatment and rehabilitation.
IGA CHECKLIST
- Identify each public agency which is a contracting party by correct statutory title and indicate
whether it is a State, county or city, town or other public or municipal agency or
instrumentality.
- Place into the recitals or elsewhere in the agreement, the exact statutory references under
which each contracting party is empowered or authorized to exercise the powers
contemplated.
- State the duration.
- State the purpose or purposes to be accomplished.
- State the manner of financing the undertaking and, where applicable, state the manner of
establishing and maintaining a budget for the project.
- State the method and means of partial or complete termination.
- Where property is to be acquired solely for the accomplishment of the purpose or purposes
of the agreement, provide a means or method for disposing of such property upon the
termination or completion of the agreement.
- Provide in the agreement or contract that it will be filed with (a) the Maricopa County
Recorder’s Office if all parties are located in Maricopa County or (b) the Secretary of State
if one or more of the parties resides other than in Maricopa County. State that the agreement
will not become effective until after it has been filed.
- Provide in the agreement for cancellation by the ASU President in accordance with A.R.S.
§ 38-511.
- State that the parties agree to comply with Executive Order 75-5 and incorporate the same
into the agreement and to comply with all applicable state and federal laws, rules, regulations
regarding equal opportunity, nondiscrimination and affirmative action.
- State that in the event of a dispute under the agreement, the parties agree to use arbitration
to the extent required under A.R.S.§12-1518 and A.R.S.§12-133.
- Provide that to the extent required by A.R.S.§35-214, the parties
agree to retain all books, accounts, reports, files and other records relating to the Agreement
and to make such records available at all reasonable times for inspection and audit by the
University or the Auditor General of the State of Arizona, or their agents, during the term of
and for a period of 5 years after the completion of the agreement.
- Provide that the personnel of the other party to the agreement will not for any purpose be
considered employees or agents of the University and that the other party assumes full
responsibility for the actions of its personnel while performing services under the agreement,
and shall be solely responsible for their supervision, daily direction and control, payment of
salary (including withholding income taxes and social security), worker’s compensation and
disability benefits.
- Assure that indemnification and hold harmless clauses are stricken or qualified to except
therefrom a state agency or board.
- Include with any agreement, authenticated copies of each "appropriate action by ordinance,
resolution or otherwise" of the governing bodies authorizing the future execution (signing)
thereof.
- Submit the agreement to the Office of General Counsel for its determination of whether the
agreement is in proper form and within the powers and authority granted to the Arizona
Board of Regents and/or the University by law before the President or his designee actually
is presented with the agreement for signature.
- If the Office of General Counsel determines that the agreement is in proper form and within
the powers and authority granted by law, note such determination on the agreement. The
following provision should be included in the proposed agreement:
Pursuant to A.R.S. § 11-952, the foregoing agreement has been
submitted to Counsel to the Arizona Board of Regents for and on
behalf of Arizona State University. The undersigned has determined
that said agreement is in proper form and is within the powers and
authority granted under the laws of the State of Arizona to the Board
of Regents for and on behalf of Arizona State University.
ARIZONA STATE UNIVERSITY
OFFICE OF GENERAL COUNSEL
By___________________________
_____________________________
Associate General Counsel
All documents will then be returned to the party from whom it was received. In the event
that the Office of General Counsel determines that the agreement is not in proper form or not
within the powers and authority granted under the law, the agreement will be returned with a
letter or memorandum identifying the deficiencies.
After the Office of General Counsel has made a favorable determination, the parties should
then execute (sign) the agreement and file it with the appropriate recording office.