## Facts

- Durango Transportation, Inc. (DTI) held a Colorado Public Utilities Commission (PUC) certificate to operate a mass transit system within La Plata County.
- The City of Durango and La Plata County entered an intergovernmental agreement (IGA) under which the City would operate a mass transit system serving areas in both the City and the County.
- The IGA provided that fares would be set by the City with advice from a transit advisory board composed of City and County appointees.
- DTI challenged the joint transit operation as infringing its certificated rights and argued the City lacked authority to operate outside its municipal boundaries without PUC approval.
- After prior appellate proceedings and a state supreme court ruling, the remaining dispute focused on whether the IGA was valid under Colorado’s constitutional and statutory provisions authorizing intergovernmental cooperation.

## Issues

1. Whether the City–County IGA for mass transit was valid under provisions permitting agreements for “functions, services, and facilities lawfully authorized to each” participating entity.
2. Whether “lawfully authorized to each” requires each party to have independent authority to provide the service throughout the entire combined service area, or only within its own jurisdiction.
3. Whether designating the City as a lead operator and allowing unequal managerial or financial participation invalidates the IGA.

## Decision

- The court affirmed dismissal of DTI’s complaint and upheld the IGA.
- It held the IGA was valid because each governmental entity was authorized to provide mass transit within its own jurisdiction, and the agreement permissibly allocated operational responsibility.
- It rejected the argument that the IGA required equal participation or was invalid because the City acted as a lead agency.

## Legal Principles

- Intergovernmental cooperation provisions allow public entities to contract jointly for functions, services, or facilities that are “lawfully authorized to each” participating entity.
- “Lawfully authorized to each” means each party must have authority to perform the function within its own jurisdiction; it does not require each party to have independent authority to perform the function throughout the entire area covered by the agreement.
- An IGA may designate one governmental unit as a lead agency and allocate operational duties unevenly, absent a statutory requirement of equal participation.
- Political accountability of participating local governments supports permitting flexible local arrangements for shared public services without added regulatory supervision where each entity acts within its territorial authority.

## Conclusion

The court sustained a city-county agreement assigning the City primary responsibility for operating a regional transit service, holding that intergovernmental cooperation is valid when each entity has authority to provide the service within its own boundaries and the agreement merely organizes performance rather than expanding governmental powers.


Durango Transportation, Inc. v. City of Durango, 824 P.2d 48 (Colo. App. 1991)