On February 5, the Senate Community and Urban Affairs Committee released S-2289, which encourages sharing of services. While providing some civil service relief to encourage shared services, the bill mandates the reduction of state aid if voters reject a shared service proposal brought forth by the Local Unit Alignment, Reorganization, and Consolidation Commission (LUARCC).  The League opposes S-2289. 

Civil Service changes proposed in the bill are as follows: 

• If one or more local units have adopted Civil Service, the shared service agreement must include an employment reconciliation plan when the proposed agreement or contract affects employees in a Civil Service town. Unless otherwise agreed to, the local unit providing the serviceis responsible for filing the employment reconciliation plan with the Civil Service.
• The parties of the proposed shared service agreement or joint contract may request relaxation of the Civil Service law and regulations, including, but not limited to: selection and appointment; requiringnon-Civil Service employees prior to the execution agreement/contract to become Civil Service for the purpose of creating an uniform poolfrom which the new agreement/contract shall hire employeesuntil employee pool is exhausted;permittingexpedited designation as Civil Service employees without regard to normal process, including testing and employment lists. 
• Employment decisions to transfer the employee to the providing town,retainthe employee by the recipient town, or terminate the employee for reasons of economy or efficiency are subject to existing collective bargaining agreements with the affected local units as it pertains to such employment decisions. Disputes must be settled by the parties using mediation. If that is unsuccessful, then binding arbitration.
• Any employee with a permanent Civil Service title who is terminated for reasons of economy or efficiency at any time by either local unit is placed on aspecial reemployment list for any Civil Service employer within the county. Employees are removed from the list if the employee has declined a reemployment opportunity in a position with the same or substantially similar job duties as, the same title and series as, the same or substantially similar work hours, and a location within a 25-mile radius of the previous employment. 
• When a non-Civil Service employee is transferred and given a Civil Service job title due to a shared service agreement/contract, upon termination of the agreement/contract, that employee remains subject to Civil Service. We are concerned that this will create two separate tiers of employees and question how this work and what impact it will have on municipal operations.
• The providing municipality will have the final decision over which employees are transferred from the receiving town to the providing town, subject to the provisions of any existing collective bargaining agreement within the affected local units.
• If the providing town is Civil Service but the receiving town is non-Civil Service and the towns desire that some or all employees of the recipient town are transferred to the providing local unit, the Civil Service Commission shall vest those employees in appropriate titles, seniority, andCivilService tenure with the providing local unit based on the duties of the position, information provided by the recipient unit, and the recommendations of the providing town. 
• The final decision of which employees shall transfer to the new employer is vested solely with the local unit that will provide the service, subject to the provisions of any existing collective bargaining agreement within the local unit.
• If the providing town is non-Civil Service but the receiving town is Civil Service and some or all employees of the receiving town are transferred to the providing town, any Civil Service rules incorporated by reference into a collective bargaining agreement applicable to the receiving town employees shall continue to apply to the transferred employees until the expiration of the collective negotiation agreement. 
• Employee who is being laid off for reasons of economy due to the implementation of a shared service agreement/contract must be provided a layoff notice at least45 daysprior to the layoff date, unless a collective bargaining agreement, employee contract, or personnel policy set forth a different notice requirement. Civil Service employees who has a permanent status has the right to appeal the good faith of such layoffnotice. CivilService canconsolidatethe appeals. All appeals must be filed within20 daysof final notice of such layoff.
• Once transferred, an employee is subject to any collective bargaining agreements, employment contracts, personnelpoliciesand provisions that exist for the new employer.
• Final decision on which employees transfer is vested solely with the providing town but is subject to the provisions of existing collective bargaining agreements within the affected town. Disputes must be settled by the parties using mediation. If that is unsuccessful, then binding arbitration. We believe that this is a cumbersome process that will lead to litigation. We respectfully request that the provision be removed and leave employment decisions solely vested with the local unit,s and empower the local unit providing a shared service with authority to decide.

S-2289 also creates a new “stratified layoff process.” A stratified layoff process is defined as a layoff plan and procedure designed to allow employees within a given employee band to invoke seniority in the event of layoffs but to prohibit employees assigned from one band from invoking seniority rights over an employee assigned to another band.  

Within an employee band, employees shall retain and be entitled to exercise all seniority and layoff rights that they have under Civil Service law, regulations as well as collective bargaining agreements. This only applies to the implementation of a shared service agreement or joint contract.  

Prior to the execution of an agreement, if one of the towns is Civil Service, they may submit to the Civil Service Commission an application to employ a stratified layoff process. The application must assign current employees to one of the three employee bands: executive, managerial, or non-managerial. When application is submitted to Civil Service, it is also sent to the collective bargaining representatives. Within 15 days, the employees may submit additional information to the Civil Service Commission for its consideration. 

Civil Service reviews the material and approves an application to employ a stratified layoff process if the application assigns each employee to the proper band. The Civil Service Commission must assign job titles to one band of either executive band, which are job titles in local government with managerial responsibilities equivalent to a Division Director or higher in State service, managerial band, which are job titles in local government with managerial responsibilities equivalent to Assistant Director or Bureau Chief in State service and that supervise second level supervisors, or non-managerial, which are job titles in local government that are not in the managerial or executive bands. We are concerned that the definition of the bands in the stratified layoff process are using state service only but will apply to municipalities. We respectfully request that definitions be expanded to mirror municipal operations. 

S-2289 also expands LUARCC’s requirement to develop criteria to serve as the basis for recommending the consolidation of specific municipalities; merger of specific existing autonomous agencies into the parent municipal or county government; and for recommending the sharing of services between municipalities or between municipalities and other public entities, including but not limited to counties, fire districts, school districts, and regional school districts. 

It requires LUARCC to first focus its studies on local units that neither participate in a shared service agreement nor have undertaken independent shared service studies or negotiations before it studies any local units that participate in shared services. If a LUARCC study could result in the State aid penalty, then the recommended model must be projected to be capable of maintaining the same level of service or improving the services provided by the participating municipalities. It also must project either meaningful savings or a slowed rate of growth of costs to result over a reasonable period. 

LUARCC is prohibited from engaging in a State aid penalty study if the municipality demonstrates that it is already sharing services with a local unit unless LUARCC affirmatively demonstrates that it has already studied all municipalities in the State that are not engaged in shared services. 

LUARCC is permitted to undertake studies to examine the sharing of services between specific municipalities or between municipalities and other public entities. In addition, LUARCC may undertake studies to examine the consolidation of municipalities, but those recommendations will not be subject to the reduction of state aid penalty. A local unit may request LUARCC to undertake a study to examine the local unit’s potential for consolidation or sharing of service. A county may request LUARCC to undertake a study to examine the local unit’s potential for providing specific shared services to constituent municipalities. However, no county shall be included in studies that could potentially serve as a basis of recommendation subject to State aid penalty unless the study is agreed to by the municipal governing body by resolution. 

As part of the process, LUARCC will be required to conduct at least five on-site consultation sessions in each local unit with the governing bodies and affected officials of each local unit for sharing of services. If the consultation sessions are subject to Open Public Meeting Act requirements, LUARCC must reimburse the local units for any expenses incurred. 

Each consolidation or shared service proposal must: 

• Detail the current delivery service being considered for the shared service proposal, including personnel, equipment, and cost.
• Detail the cost, including personnel and equipment, for the proposed shared service.
• Include an estimate of the total net savings that will result from the implementation of the proposed consolidation or sharing of service.
• Provide options for the delivery of the shared services and an explanation of why those options are not optimum.
• Include a transcript ofthe publichearings.
• Include any other pertinent information.

LURACC must provide written notice of recommendations, including any economic analysis and documentation supporting the recommendation, to the governing body of each local unit. Any economic analysis performed by or on behalf of LUARCC must be submitted to the State Treasurer for review of the accuracy of the analysis prior to releasing a recommendation. At the same time, the economic analysis shall be submitted to the affected municipalities and other public entities. 

No recommendation for a shared service that is submitted to the State Treasurer by LUARCC can be made unless LUARCC finds that the current level of service will be maintained or improved for each affected municipality and that each affected municipality will realize cost savings. The State Treasurer has 90 days to either certify the recommendations or prepare a memo of objections for LUARCC. Within 30 days from LUARRC’s submission to Treasury the local unit must either certify the recommendations or provide written objections along with supporting documentation to the State Treasurer. LUARCC shall work with the State Treasurer in satisfying the objections prior to resubmitting a recommendation for review and certification. 

LUARCC must submit to each local unit a written notice, recommendation of the State Treasurer certification or objections to the economic analysis. documentation supporting LUARCC’s recommendation, and notice giving the local units 14 months to implement their recommendation or that they need not take any action with respect to a recommendation that was not certified 

A local unit may appeal the total net savings estimate contained in LUARCC’s proposal to Department of Community (DCA) Commissioner within 30 days of receipt of the LUARCC report. The DCA Commissioner has 15 business days to review the analysis and the challenge in order to determine whether the analysis should be adjusted. The DCA Commissioner may extend the review time for the appeal if they deem a hearing is necessary.  

For consolidation of municipalities, LUARCC shall be present at one or more public hearings. For sharing services, LUARCC must hold at least two public hearings in each municipality in places that are easily accessible to the residents of both or all of the municipalities. Notice must be given seven days prior to the public hearing in the official newspaper and posted in each local unit’s official building and on their websites. LURACC shall reimburse local units for any expenses incurred in holding the public hearing.

The bill does remove the requirement that municipalities to be considered for consolidation must be within the same county and must also be situated within the same legislative district. 

We share the commitment to provide meaningful, lasting relief to New Jersey’s property taxpayers. There are some positive changes that S-2289 would make that would assist municipalities in sharing services such as the repeal of preservation of seniority, tenure and pension rights for law enforcement officers and removing county and legislative district restrictions. 

The League’s main objection to S-2289 is the penalty provision. We must oppose any proposal which would, on the one hand, allow the voters to express their will; but on the other hand, inform those voters that they will be penalized if their will does not comport with that of a majority of the appointed members of LUARCC. This is a fundamental position, respecting our voters and the concept of self-determination. 

When taxpaying voters democratically reject an option offered to them by a bureaucratic State agency, they should not then forfeit the right to property tax relief funding. As taxpaying citizens of the State of New Jersey, they should be allowed the unencumbered right to determine the future government of their communities. And they should be assured of equitable access to the benefits secured by their own tax dollars. 

Shared Services are not a new concept to municipalities, and the League is a longtime supporter of shared services. In fact, the vast majority of municipalities are already sharing services, many initiated years ago. DCA has logged over 4000 shared service agreements that have an estimated cost savings of $365 million and have awarded $24 million in LEAP grants. 

There is no overnight cure for our property tax crisis. Shared services, consolidation, or other cost saving measures are long-term actions where benefits/savings may not be seen for a number of years down the road. A majority of Mayors are willing to consider options, but do not want to see their citizens punished if they disagree with the decisions reached by LUARCC.  

We trust the judgment of the people who elect us and Legislators should trust local officials to act in the best interests of their residents. The time has come for public servants at all levels of government and in all local units to put our heads together and work towards a serious approach that will benefit taxpayers in the long run. 

Contact: Lori Buckelew, Deputy Executive Director, lbuckelew@njlm.org, 609-695-3481, x112.