The Town Crier - Legislative Backgrounder

Since 2011, Senate President Sweeney has been advancing legislation to encourage shared services by making various civil service reforms, but would permit the state to withhold state aid from municipalities that did not implement a shared service agreement.  For the past ten years the League has been working with the Senate President to address municipal concerns.  While the intent of legislation has always been to encourage sharing of services, over the years the bill has undergone amendments on various issues, such as civil service reforms,  some of which we viewed positively and some less so.   The one constant that has remained is the voter penalty – if the voters reject a recommendation of Local Unit Alignment, Reorganization, and Consolidation Commission (LUARCC) then the municipality would lose state aid (ERT/CMPTRA) equal to the amount of savings LUARCC certifies the municipality would have if they enacted the shared services.

The full Senate will be considering S-1 on Friday.  Below is a summary of the current legislation.  Given the significant number of amendments Senate President Sweeney and cosponsor Senator Vin Gopal have made to address our concerns both on the Civil Service reforms and the LUARCC process, the League, after a review of the latest amendments with League leadership, will be taking a neutral position on the bill.  We still continue to express our objections to the penalty, especially if the voters reject the recommendation, and the stick approach to shared services instead of the carrot. 

 Below is a summary of the current version of S-1:  

Shared Services Civil Service Reforms:

• Permits municipalities to apply to the Civil Service Commission for relaxation of rules including but not limited to selection, appointment, requiring non-Civil Services become Civil Service employees for the creation of uniformed employee pool with sharing is between non- Civil Service and Civil Service municipalities.
• Removes terminal leave.
• For reemployment list – if a person turns down employment for a job that has similar job duties with similar hours within a 25-mile radius of the previous location they are removed from the special reemployment list.
• When an employee from a non-Civil Service municipality is transferred to a Civil Service municipality for a shared service agreement they remain an employee of the Civil Service municipality when the contract is terminated.
• Determination of which employees are transfer to the new employer is vested solely with the local unit providing the shared services.
• If Civil Service employees are transferred to a non-Civil Service municipality, any civil service rules are incorporated into the collective bargaining agreement and continue to apply to the transferred employees until the expiration of the collective bargaining agreement.
• Once transferred, that employee becomes a permanent employee of the new employer and subject to any collective bargaining agreements, employment contracts, personnel policies, and provisions that exist for the new employer.

Shared Services Labor Issues (all municipalities):

• Repeals the statute on perseveration of seniority, tenure, pension rights of law enforcement (N.J.S.A. 40A:65-8 & N.J.S.A. 40A:65-17) – Note: this is the statute that requires towns entering into a shared service or joint contract agreement to recognize and preserve seniority, tenure and pensions of all fulltime law enforcement officer and prohibits termination of those law enforcement officers, except for cause.
• Repeals the statute on Employment reconciliation plan (N.J.S.A. 40A:65-19).
• Repeals the Local Health Services Act (N.J.S.A. 26:3A2-1 through 26:3A2-18).

LUARCC Provisions (all municipalities):

• Defines state aid as Energy Tax Receipts and CMPTRA.
• Increases LUARCC membership from 9 to 11 with one new seat dedicated for a member of either PBA, FMBA, CWA or AFSCME. The other seat dedicated to a municipal administrator, manager or chief financial officer with at least 10 years of experience.
• Expands LUARCC’s mission to include efficiency of whether some municipal services and functions would be more efficiently provided by counties.
• To enforce the “penalty provision” LUARRC:
  • can only study local units that have not participated in a shared service agreement, or have not undertaken an independent shared services studies or negotiations;
  • must recommend a model that is capable of maintaining the same level of service or improving the services;
  • must either project meaningful savings or a slowed rate of growth of costs to result over a reasonable period of time.
  • LUARRC must conduct one on-site consultation session with each local governing body.
  • LUARRC proposal must include
    • detail of current delivery of services;
    •  cost, including personnel and equipment;
    • include estimate of total net savings;
    •  provide options for the delivery of services and why those options are not optimum;
    •  transcripts of the public hearings; and
    •  other pertinent information
    • LUARRC’s economic analysis must be submitted to the State Treasurer for review prior to the release of recommendations. The municipality may contest the economic analysis to DCA.
    • LUARRC cannot submitted a study to the State Treasurer unless LUARRC finds that the current level of service will be maintained or improved for each affected municipality and each affected municipality will realize a cost savings.
    • Local units may implement the recommendation by adoption of ordinance or public question.
    • Reduction in state aid will not happen to municipalities that are unable to implement the recommendations due to the other local unit’s inaction.
    • A county may request LUARRC to undertake a study examining the sharing of services with municipalities, however, that study cannot be subject to the reduction of state aid unless the governing bodies of the affected municipalities adopt a resolution stating support of the study.