Code of Iowa Chapter 28E provides the ability for governmental entities to enter into contracts with one another. The purpose of the law is to “permit state and local governments in Iowa to make efficient use of their powers by enabling them to provide joint services and facilities with other agencies and to cooperate in other ways of mutual advantage.” Governmental entities are permitted to conduct any activity jointly with another entity as long as each entity has the power to conduct that activity on its own. Cities are also allowed to enter into 28E agreements with non-profit and private organizations in certain situations. Additionally, the state code permits the creation of separate entities to administer and carry out the purpose of the agreement.
Cities form 28E agreements for a variety of reasons, the most common being for law enforcement services, fire protection and mutual aid, emergency response, joint dispatch and street maintenance. In many cases, a city may not have a full-time need for a particular service or may not have the budget capacity to operate a service. By forming a 28E agreement, a city can provide a service to its citizens in a more cost-effective way. For example, many small cities in Iowa contract with another agency such as a county sheriff department to provide law enforcement in their community. While these cities often do not have a need for around-the-clock service and do not have a large enough budget to pay for their own police department, they are still able to provide law enforcement in their community by contracting with another agency.
The process to completing a 28E agreement can include many steps, and cities should involve their city attorney while reviewing potential contracts. Before any formal action occurs, city officials should review which services, equipment or facilities could be done in a cooperative manner. This review should not only look at potential cost savings, but also determine the value of the arrangement. While sharing services, equipment or facilities is often more efficient, it may not lead to improvements in effectiveness.
Once a city has identified potential items that can be done in a cooperative agreement, city officials should determine other entities that may also benefit and meet with them to begin preliminary negotiations. The entities should discuss the purpose of the agreement, what each party will be required to do, insurance coverage and any costs or fees that will be part of the agreement. The interested parties should then conduct planning meetings to discuss how the service will be provided and prepare a working draft of the agreement that can be reviewed by their respective attorneys. Once the terms of the proposed agreement have been finalized, it should be sent to each governing body along with a form of resolution that approves the agreement. After the agreement has been approved and executed by all participating governing bodies, the agreement must be filed with the Secretary of State.
Chapter 28E also allows for agreements that create a separate entity. For example, Sections 28E.21-30 allow cities in a county to form a Unified Law Enforcement district with the county sheriff department. In addition to the county sheriff department providing law enforcement to participating cities, a property tax levy may be established to provide more funding for the district. Such a levy must be approved by voters. If approved, a public safety commission is established to administer the unified law enforcement agreement.
If a separate entity is created by a 28E agreement the separate entity is considered a governmental body and is subject to open meeting and open records laws. If the entity had more than $100,000 cash on hand at the end of the last fiscal year and spent more than $100,000 in that fiscal year, it is required to produce a summary of the proceedings of each meeting, including the schedule of bills paid. The entity must publish the summary in one newspaper of general circulation within the geographic area served by the joint board of the entity created in the agreement. The summary of the proceedings shall include the date, time and place the meeting was held, the members present, the actions taken at the meeting and be published within 20 days of the meeting. Entities that do not go over the $100,000 threshold must file electronically the summary of their meeting with the county recorder along with the 28E agreement.
As stated in Section 28E.5, each agreement is required to specify the following:
- The duration of the agreement
- The precise organization, composition and nature of any separate entity created and the powers of such entity
- The purpose or purposes of the agreement
- The manner of financing the joint or cooperative undertaking
- The manner of establishing and maintaining a budget
- The permissible methods to be used to partially or completely terminate the agreement
- The permissible methods to be used to dispose of any property upon such termination
- Any other necessary and proper matters
In addition, agreements that do not create a separate entity must detail who will administer the cooperative undertaking (an individual or joint board) and specify how property will be acquired, held or disposed. If a joint board is created it is considered a governmental body and must follow Iowa’s open meetings and open records laws.
All 28E agreements must be filed electronically with the Secretary of State’s Office, which also keeps a database of the agreements. Certain types of agreements and activities will call for additional reporting requirements, particularly those that tax citizens.
As with any time a city council is considering a contract, it should consult with their city attorney to ensure the city’s interests are protected. It is wise to continually review all 28E agreements, either on a quarterly or annual basis, to determine effectiveness and whether needs are being met. This is also important as it relates to the city budget – cities that receive funding from another entity for providing a service need to determine if the revenues are sufficient to cover the costs of the service. Conversely, if the city is paying for a service, it should ensure the service is being provided in the agreed upon manner and the city’s budget is able to handle ongoing obligations.