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Contractual Agreements Between Municipal and Tribal Governments and/or Non-profits



Frequently Asked Questions
Additional Resources
Applicable Laws


Introduction    Back to Top

A significant number of Alaskan communities have both municipal and tribal governments and/or regional or local non-profits providing services in a community. Increasingly these communities are finding that the limited funds and/or pool of trained workers cannot support two or more government administrations, and are looking at options for combining functions to lower costs and implement "economies of scale."

Contracting for cooperative or joint administration is one method frequently considered to provide administrative and other services such as water/sewer and electric utilities, public safety, etc. more cost effectively. These contractual agreements are a practical tool to save time and money, especially in small rural communities with a limited economic resource base. The State of Alaska Constitution, Article X, Section 13 and state statute AS 29.35.010(13) provide the authority for a municipality to enter into this type of agreement.

A contractual agreement, sometimes referred to as a "Memorandum of Agreement" (MOA), is the method used to formalize joint/cooperative administration agreements. This contractual agreement is a legal document between the parties setting out the terms of the agreement and responsibilities of both parties. Issues such as who will be responsible for administration and/or operations and maintenance of services and/or programs identified in the contract are things that would be covered in the agreement. This type of agreement is usually entered into for one year with the option to renew at the end of the year.

In Alaska these types of contracts are usually between the municipal and tribal governments, but in some situations may involve a non-profit organization.


Frequently Asked Questions    Back to Top

How do you begin the process for preparing a joint or cooperative administration agreement?

The process begins with a series of meetings to define the goals of the agreement and the process that will be used. It will take a number of meetings to finalize the agreement, so be prepared and set an appropriate time so the meetings will not conflict with other community activities. If both organizations come to an agreement to pursue a MOA, begin the process of negotiating the terms and defining the responsibilities of each party.

What are some of the steps required to enter into a contractual agreement?

Both entities must first meet to discuss how involved the contract will be. In some cases the intent may be to combine all administrative functions and operations under one administrative unit, or just to combine administration for one service, such as the water and sewer utility. Following are some basic guidelines:

    1. Hold a joint meeting to assess the issues to be addressed and develop the scope of the agreement. Some questions to ask are:
      a. What are the issues that need to be addressed? Some examples are: how better service delivery can be provided, how to address decline in revenues resulting in the need to combine administrations as a cost saving measure, how to deal with a limited pool of trained workers to draw from, etc.
      b. What are some available options? Some examples might be: job sharing, such as one payroll clerk for both entities; transferring responsibility for providing certain services or programs, such as administration of the water/sewer utility; or transfer of all administrative functions and operations and maintenance.
      c. What is the goal of the agreement? What will the agreement accomplish? An example might be to improve collections by entering into a contract agreement for the billing and collections for the water and sewer utility.
    2. Devise a work plan for developing and implementing the agreement.
      a. Assign responsibility for drafting and reviewing the agreement.
      b. Create a timeline.
      c. Decide the level of detail required.
      d. Decide if you will request outside assistance. Commerce staff are available to work on these agreements, and it is generally advisable to request attorney review of a contractual agreement.
    3. Work the plan.

      a. Draft the agreement.
      b. Prepare a transition plan.
      c. Review and enter into the agreement.
      d. Implement the agreement.

If one of the parties transfers responsibilities for administering its services, does that mean decision-making powers and assets are transferred also?

No. As an example, if a municipality enters into an agreement to combine all services and programs under one administrative entity, the municipal government is still responsible for decisions made regarding its resources and programs. The municipality continues to own municipal assets such as buildings, land, and equipment, and is still responsible for oversight of public funds received in the name of the municipality.

The contractual agreement is merely an agreement to contract for certain services. The municipality must still perform all duties and functions required under the law.

What happens with municipal property and assets included in (but not limited to) the agreement?

The municipality retains ownership and control of property and assets, including sale and other disposition of municipal lands in compliance with its land ordinance (AS 29.35.090). One of the first steps in entering into a contractual agreement should be to prepare an inventory of all assets including the condition, value, and location of the assets.

What are the minimum legal requirements to keep a municipality operational?

A municipality must:

    1. Hold regular meetings that are open to the public, including meetings with the contracting entity (AS 29.20.020
    and AS 29.20.160(b)).
    2. Maintain a journal/public record of its official proceedings (AS 29.20.160(e)).
    3. Appoint municipal officials (AS 29.20.360).
    4. Perform duties of municipal clerk (AS 29.20.380).
    5. Prepare and execute annual budget and capital improvement plans, make monthly financial reports, and exercise custody over municipal property (AS 29.20.500).
    6. File reports with Department of Community and Economic Development (AS 29.20.640).
    7. Conduct regular elections annually (AS 29.26.010-070).
    8. Develop and pass a municipal budget (AS 29.35.100).
    9. Provide an annual audit or report of income and expenditures (AS 29.35.120), and any other requirements to keep the contract functional in cooperation with the contracting entity.

There are also mandatory requirements that a municipality must perform in order to qualify for State Revenue Sharing
(AS 29.60.100-120), Safe Communities (AS 29.60.350), Shared Fish Tax (AS 29.60.450), PILT, and Grants (AS 29.60.400).

What happens to the employees when administration transfers?

Unless the agreement eliminates the need for the position, the tribe or municipality (depending upon which entity is performing administrative duties) usually rehires the employee(s) who then work under the supervision of the administering entity. As an example, there would still be a need for a city clerk position to perform those duties required under AS 29.20.380 however, the duties of the municipality's chief administrative officer could be delegated to the tribal administrator to carry out. An important element of the agreement process is clarifying staff duties.

Does the State of Alaska need to be involved or approve the agreement?

Frequently, regional office Local Government Specialists of the Department of Community and Economic Development (Commerce), are available to assist with developing the agreement.

What other steps might be required to implement the agreement?

Additional steps needed to implement the agreement depend on the level of responsibility being transferred.

If you are entering into a simple agreement to job share, some steps might be to develop a new job description to clarify job duties, identify what files or other documents need to be placed in the care of the contracting entity, and how information will be handled.

If the agreement results in transferring total responsibility for operation and maintenance of a service or total administrative unit, the steps would also include:

    a. Inventory assets - what condition are they in. what is their value. where are they located? Devise a formal system to transfer funds.
    b. Decide where files will be located and how they will be maintained.
    c. Clarify how operations and maintenance plans will be carried out.
    d. Clarify billing and collections procedures.
    e. Develop a schedule and process for conducting joint decision making meetings between the parties.
    f. Develop a method to assess how well the agreement is working.

NOTE: The agreement should also identify the method for terminating the agreement and transferring responsibility back to the contracting entity.


Narrative    Back to Top

A MOA will work only if the entities involved are willing to work together for the duration of the agreement. A good working agreement can result in improved services, improved capital improvement planning, better use of funds by pooling funds from federal and state sources, and promoting cooperation between the entities. To do this successfully requires frequent and consistent joint meetings.

The Alaska Department of Community and Economic Development Local Government Assistance section can answer questions and facilitate the agreement process if requested. Also, other communities with a working MOA can be a valuable source of information.


Additional Resources   Back to Top


Commerce, Local Government Handbook, Legal Requirements - The Municipal Attorney
Commerce, Local Government Handbook,Legal Requirements - Contracts
Sample Documents:

Commerce, Sample City/Tribe Combined Administration Agreement
Existing agreements: Quinhagak, Napaskiak, Aleknagik, Too'gha, Lower Kalskag, Kwethluk, Goodnews Bay, and Chefornak.

Internet Links:

The Alaska Constitution
The Current Alaska Statutes
The Alaska Administrative Code
Alaska Department of Law
Rural Governance Commission


Applicable Laws    Back to Top

State of Alaska Constitution, Article X, Section 13 - cooperative and joint administrative agreements, transfer of power.
AS 29.20 - Municipal Officers and Employees
AS 29.20.020 public meetings
AS 29.20.160(e) maintain journal of official proceedings
AS 29.20.360 appointment of municipal officials
AS 29.20.380 municipal clerk duties
AS 29.20.500 duties of chief administrative officer, budget, monthly reports, municipal property
AS 29.20.640 required reports to be filed with Commerce AS 29.26.010-.070 elections
AS 29.35 - Municipal Powers and Duties
AS 29.35.010(13) power to enter into a cooperative or joint administration agreement
AS 29.35.050(3)(c) award contracts for collection and disposal of garbage and solid waste
AS 29.35.090 municipal property, land disposal
AS 29.35.100 budget and capital program
AS 29.35.120 post audit
AS 29.60 - State Programs

Revised 10/1/02

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