Joint Powers Organizations

Pointers for Joint Powers Agreements

Public entities continue to look to the joint exercise of powers (a.k.a. joint powers entities or organizations) to deliver services efficiently and effectively. Protection is granted to governmental units that come together in accordance with Minnesota Statutes, Section 471.59. Specifically, this law provides that regardless of the number of participating governmental units, the joint powers may be treated as one governmental unit for purposes of liability.

A joint powers agreement can be used to:

  1. Consolidate and transfer operations to a new entity, which is a joint powers entity; or
  2. Resemble a contract where governmental units agree to collaborate and deliver a service, which is a joint powers collaboration.

Because the joint powers agreement is a legal document, it should accurately reflect how the cooperative venture will actually operate and which party(ies) has liability for which operations. If the agreement creates a new, separate entity, that entity must have its own coverage, as the coverage of its creating members does not extend to the new entity.

Details about forming joint powers agreements are provided in MCIT Resource Library articles.

Joint Powers Organizations Must Comply with Open Meeting and Data Practices Laws

Joint powers entities must comply with many of the same laws and practices as their member entities, such as the Minnesota Open Meeting Law and Minnesota Government Data Practices Act. Failure to comply with these laws can lead to fines and damages.

Members can learn more about these laws, tips for complying and recommendations for managing risk, by reviewing articles in the Resource Library.

Joint Employer Liability May Affect Joint Powers Entities and Collaborations

Often the services provided by or on behalf of the joint powers entity/collaboration are actually performed by an employee or department of a participating member. Because of this, identifying who is the employer is not always as clear as in a traditional employee-employer relationship.

When the employment relationship is vague, liability issues may raise questions as to which entity is the employer and impute potential liability to more than one organization. That is, both organizations could be liable for an employee’s tortious conduct or an employer’s unlawful conduct, or an aggrieved employee may make a claim against the joint powers entity and the member from whom he or she receives his or her paycheck.

Members can learn more about joint employer liability and sharing employees by reading articles in the MCIT Resource Library.

Consultation for Joint Powers Agreements

MCIT risk management consultants and staff counsel for risk control are available to provide risk management recommendations regarding joint powers agreements. They are available for consultation over the phone, via e-mail and in-person meetings. Members should contact their risk management consultant to initiate a conversation.