correct size blogSenate President Sweeney’s shared services bill, S-1, was approved by the Senate Budget Committee on February 15, 2018, and awaits consideration by the full Senate.  While the League appreciates the civil service and shared service reforms, the League opposes S-1 due to its taxpayer voting penalty provision.

Civil service and shared service reforms

S-1 would permit the parties of a shared service agreement to request the relaxation of Civil Service law and regulations, including, but not limited to:

  • Selection and appointment
  • Require non-Civil Service employees prior to the execution agreement/contract to become Civil Service for the purpose of creating a uniform pool
    • From which the new agreement/contract shall hire employees
    • Until employee pool is exhausted
    • Provides employees so designated with Civil Service rights

Determination of those employees, if any, which shall be transferred to the providing town, retained by the recipient town, or terminated for reasons of economy or efficiency is a management decision, but the providing municipality has the final decision. However, these employment decisions are subject to existing collective bargaining agreements with the affected local units, as it pertains to such employment decisions.  The parties must use mediation to settle any disputes and, 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 a Special reemployment list for any civil service employer within the county. The employee will be removed from the list if that employee has declined a reemployment opportunity in a position that involves the same, or substantially similar, job duties as the employee’s previous job; the same title and series as the previous job; and the location of the new job is within a 25 mile radius of the previous employment.

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, and civil service 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. When the non-Civil Service employee is transferred and given a Civil Service job title due to a shared service agreement/contract, upon termination of said agreement/contract, that employee remains subject to Civil Service.

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.

Employees who are being laid off for reasons of the economy due to the implementation of a shared service agreement/contract must be provided a layoff notice at least 45 days prior to the layoff date, unless a collective bargaining agreement, employee contract, or personnel policy set forth a different notice requirement. A Civil Service employee has the right to appeal the good faith of such layoff notice, within 20 days of the final layoff notice.

S-1 also creates a new layoff process, if one of the towns in the agreement is Civil Service, for implementation of shared service agreement.  The “stratified layoff process” is designed to allow employees within a given employee band (executive, managerial or non-managerial) 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 and regulations, as well as collective bargaining agreements.  The municipality must assign current employees to one of three employee bands (1) executive, which is a job title with managerial responsibilities equivalent to a Division Director or higher in State service; (2) managerial, which is a job title with managerial responsibilities equivalent to Assistant Director or Bureau Chief in State service and that supervises second level supervisors; or non-managerial, which are job titles that are not in the managerial or executive bands.  When the application is submitted to Civil Service, a copy must also be sent to the collective bargaining representatives, who have 15 days to submit additional information to the Civil Service Commission for consideration.

S-1 also repeals:

    • N.J.S.A. 40A:65-8, which preserves the seniority, tenure, and pension rights of every full-time law enforcement officer in a shared service agreement for law enforcement services.


    • N.J.S.A. 40A:65-17, which preserves the seniority, tenure, and pension rights of every full-time law enforcement officers in a joint contract for the joint operation of law enforcement services.


    • N.J.S.A. 40A:65-19, which requires joint meeting plans to include an employment reconciliation plan.


    • N.J.S.A. 26:3A2-16, which requires in a Civil Service municipality that for Department of Health shared service agreements the full-time local health employees must to be transferred to another local health agency with the same job responsibilities and salary.


    • N.J.S.A. 26:3A2-17, which requires in a non-Civil Service municipality that for Department of Health shared service agreements the full-time local health employees with two or more years of service, must to be transferred to another local health agency with the same job responsibilities and salary. 
    • N.J.S.A. 26:3A2-18, which requires part-time local board of health employees with two or more years of service, to be placed on a preferential reemployment list for two years after employment is terminated for a shared service agreement.


S-1 also removes the requirement that municipal consolidations should be within the same county and legislative district.

LUARCC Process

S-1 expands the “Local Unit Alignment, Reorganization and Consolidation Commission(LUARCC) to undertake studies to examine the sharing of services between specific municipalities or between municipalities and other public entities as well as consolidation.  In addition, LUARCC is required to develop criteria to serve as the basis for:

  • Recommending the consolidation of specific municipalities; and
  • 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.

Please note that 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 also request LUARCC to undertake a study to examine the local unit’s potential for providing specific shared service to constituent municipalities. However, no county shall be included in study that could potentially serve as a basis of recommendation subject to CMPTRA aid penalty, unless the study is agreed to by the municipal governing body by resolution.

LUARCC will 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. Only after “affirmatively” demonstrating that it has already studied all municipalities in the State that are not engaged in shared services can LUARCC impose a CMPTRA aid penalty in a municipality with an existing shared service agreement.

LUARCC will be required to conduct at least five (5) on-site consultation sessions in each local unit with the governing bodies and affected officials of each local unit for sharing of services. In addition, they must hold at least one public hearing on consolidation recommendations and two public hearings in each municipality for a shared service recommendation.

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 implementation of the proposed consolidation or sharing of service;
  • provide options for delivery of the shared services and an explanation of why those options are not optimum;
  • include a transcript of the public hearings; and
  • include any other pertinent information

LUARCC must provide written notice of recommendations, including any economic analysis and documentation supporting the recommendation, to the governing body of each local unit.  Any LUARCC economic analysis 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. Within 30 days from LUARCC’s submission, a local unit must either certify the recommendations or provide written objections along with supporting documentation to the State Treasurer.  The State Treasurer has 90 days to either certify the recommendations or object to LUARCC’s findings.  LUARCC must work with the State Treasurer in satisfying the objections, prior to resubmitting a recommendation for review and certification.

A local unit may appeal the total net savings estimate contained in LUARCC’s proposal to the 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 a hearing is deemed necessary.

If the LUARCC’s study finds that there could be savings in a shared service, thereby resulting in a taxpayer CMPTRA 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; and
  • must project either a meaningful savings or a slowed rate of growth of costs to result over a reasonable period of time.

If a local unit receives a recommendation for sharing of services from LUARCC along with the State Treasurer’s certification, the local unit must approve the recommendation within 14 months of the date of the notice or be subject to the CMPTRA penalty. An approved shared service proposal must be implemented within 28 months following LUARCC’s recommendation.

The local unit may adopt a resolution or ordinance to approve a recommendation or submit it to the voters at the next general election. S-1 provides the language for a local unit to use if they wish to submit a public question.

Taxpayer Penalty

Regardless of the outcome of the vote on the public question, if a municipality does not approve LUARCC’s recommendation within 14 months or does not make a good faith attempt within 28 months to enter into and implement the recommendations, the State shall annually reduce the total amount of CMPTRA  allocated to that local unit by the total net savings estimated in LUARCC’s proposal.  The CMPTRA penalty only applies to shared service recommendations and not consolidation recommendations.

No municipality will be subject to a CMPTRA reduction if it approved a recommendation for sharing of services and the failure to implement the recommendation was due to action or inaction of the governing body or voters of another local unit.

The League continues to 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.  To us, this is a fundamental position, respecting our voters and the concept of self-determination.

Though we oppose the bill, we thank the Senate President for involving local officials in the development of this legislation, for listening to our concerns and accepting some of our recommendations.  We remain committed to working with the sponsors and other interested stakeholders to address our remaining concerns with the legislation.


Lori Buckelew, Senior Legislative Analyst, lbuckelew@njslom.org, 609-695-3481 x112.