Connecticut laws/regulations; Background;

OLR Research Report

October 26, 2011




By: Rute Pinho, Associate Analyst

You asked for a description of the laws authorizing (1) towns to collaborate on different activities and (2) state grants for towns that do so.


Many statutes allow towns to collaborate on different activities. Some give them broad authority to (1) collaborate on any activity they can perform separately, (2) jointly finance projects and activities, and (3) share tax revenue. Other statutes specify the activity and how towns may collaborate to undertake it. This includes allowing towns to establish a regional entity to perform a specific municipal function (e.g. health, education, or waste management) and join together to implement a regional property revaluation program or purchase employee health insurance.

The law authorizes three state grant programs for towns that join together to deliver a service, purchase capital equipment, or implement a capital project. Under the Regional Performance Incentive Grant Program, towns and regional entities can receive grants for jointly performing a service they have been performing separately. The Intertown Capital Equipment Purchase Incentive Program, established during the 2011 legislative session, is designed to help towns jointly buy or lease needed vehicles or capital equipment (PA 11-57). Lastly, a new law makes groups of towns collaborating on a capital project eligible for Small Town Economic Assistance Program (STEAP) grants (PA 11-123).


The law gives towns and municipal bodies (e.g., special taxing districts and municipal districts) blanket authority to enter into interlocal agreements to perform jointly any function that any statute, special act, charter, or home-rule ordinance allows them to perform individually (CGS 7-148cc and 7-339a, as amended by PA 11-99).

The law specifies how participants must enter into and approve these agreements, but gives towns flexibility in negotiating their provisions.

Towns may also collaborate to finance projects and activities. CGS 7-136n allows them to jointly issue bonds to fund any type of project or activity. It specifies the conditions and procedures for issuing these bonds.

CGS 7-148bb allows two or more towns to share real and personal property tax revenue. Those that choose to do so must adopt an agreement endorsed by each participating town's legislative body. Among other things, the agreement must identify the source of the shared revenue and describe how the towns will collect and share it.


Several statutes allow towns to jointly perform specific services or activities by creating an interlocal body or by some other method. Towns can establish a wide variety of regional entities with responsibilities for specific municipal functions, such as health, education, transportation, waste management, and economic development, among other things. OLR Reports 2008-R-0533 and 2010-R-0072 describe these entities and their responsibilities and powers.

The statutes also allow towns to collaborate on specific services without creating an entity to do so. For example, they can establish a regional property revaluation program (CGS 12-62q); purchase employee health insurance (CGS 7-464b); or establish cooperative arrangements to provide school accommodation services, programs, or activities (CGS 10-158). (OLR Report 2006-R-0616 describes the process school boards must follow in entering into these cooperative arrangements.)

Towns can also collaborate for economic development purposes. OLR report 2009-R-0233 describes some of the ways in which they can do so. In addition, the law allows towns that belong to the same federal economic development district to enter into mutual agreements to promote regional economic development and share the real and personal property tax revenue the development generates (CGS 7-148kk). Another statute allows towns, through their regional planning and economic development organizations, to organize regional economic development districts, prepare economic development plans, and apply for state and federal economic development funds to implement them (CGS 32-741).


Regional Performance Incentive Grant Program

Under the Regional Performance Incentive Grant Program, the Office of Policy and Management (OPM) provides funds to towns and regional entities for jointly performing a service they have been performing separately (CGS 4-124s, as amended by PA 11-61). The program is open to two or more municipalities, regional planning organizations, regional economic development districts, and any combination of these eligible entities.

According to OPM's program guidelines, proposed projects must:

1. be new (on a regional basis),

2. demonstrate cost savings,

3. not result in any loss of services, and

4. be sustainable on a regional basis once established.

The OPM secretary must give priority to proposals that (1) involve all of a regional entity's member municipalities, (2) increase their purchasing power or provide cost savings, and (3) economic development districts submit.

The legislature created the grant program in 2007 and used $8.6 million in FY 07 budget surplus funds to fund 24 grants in FY 08. These grants funded (1) information technology, (2) administrative services, (3) public safety, (4) human services, and (5) public works-related projects. OPM's Annual Report on the Regional Performance Incentive Program summarizes the projects and their status as of March 2011.

PA 11-6 established a dedicated funding source (a portion of the state hotel tax and rental car surcharge) and account to fund future grants under the program. The Office of Fiscal Analysis estimates that the account will receive $7.2 million in FY 12 and $7.4 million in FY 13.

Intertown Capital Equipment Purchase Incentive Program

PA 11-57 established a new grant program, administered by the OPM secretary, to help municipalities jointly buy or lease needed vehicles or capital equipment starting October 1, 2011.

The program provides grants to pay up to 50% or $250,000, whichever is less, of the cost of buying or leasing (1) a maintenance vehicle, pickup truck, tractor, truck tractor, utility trailer, or similar vehicle or (2) any other equipment, including data processing equipment with a unit price under $1,000, that has an expected remaining useful life of at least five years from the purchase or lease date. The municipality must use the vehicle or equipment to perform or deliver a required government function or service.

The act authorized $10 million in bonds for FY 12 and FY 13 for the grant program. The OPM secretary must develop program guidelines, including application and administration procedures, by September 1, 2011.

STEAP Grants

A 2011 law makes groups of municipalities eligible for STEAP grants, as long as each municipality that is a member of the group is otherwise eligible for the grants (PA 11-123). STEAP provides grants for capital projects to municipalities that do not qualify for the Urban Action grant program, which is meant mainly for cities and economically distressed towns. A municipality can receive up to $500,000 each fiscal year in total STEAP grants, including any grants it receives as part of a group.

In FY 11, OPM awarded STEAP grants for a variety of capital projects, including reconstructing roads, bridges, and sidewalks; repairing and improving town offices and libraries; and constructing recreation facilities. The list of FY 11 grant awards is available here: http://www.ct.gov/opm/lib/opm/budget/steap/fy2011_steap_awards.pdf.