Agreement on the IT Service Center of the Cantons of Obwalden and Nidwalden - Name, Legal Nature, Headquarters

1. The Cantons of Obwalden and Nidwalden establish a public-law institution with its own legal personality under the name "Information Technology Service Center Obwalden - Nidwalden (ILZ)", with its seat in Sarnen.

2. The ILZ is autonomous in its organization and operation; it maintains its own accounts.

1. The ILZ

a. * provides information technology services for those organizations for which the Agreement on Cooperation in the Field of Information Technology[1] applies;

b. * may execute orders for third parties, provided that this does not result in any qualitative or financial disadvantages for the contracting cantons of the agreement.

c. * ...

1. The ICT Services Center provides, in particular, the following IT services

a. * it assumes all tasks of the ICT Services Center according to the agreement on cooperation in the field of information technology;

b. * it prepares guidelines for the use of information and communication technologies within the framework set by the governments;

c. it ensures data security in its domain as well as compliance with data protection regulations;

d. * it advises the personnel of its clients on matters related to IT usage and offers training programs;

e. * it ensures the operation of IT applications and systems (data processing, information, and communication systems) that are of central importance;

f. * it receives and processes orders from its clients;

g. it operates one or more data centers, particularly for the processing of applications according to letter e;

h. * it can provide audit services for the benefit of its clients.

i. * ...

2. It can be entrusted by its clients with further tasks such as strategy development, financial planning, and project processing.

3. The ICT Services Center can outsource IT services to third parties. The outsourcing of services with strategic significance or corresponding economic impact requires the approval of the governments of the contracting cantons. The ICT Services Center remains responsible for fulfilling these tasks.

4. ...

1. The contracting cantons shall provide the ILZ with a capital contribution of CHF 500,000 each for the commencement of operations, which is to be interest-bearing by the ILZ.

2. ...

2a. The interest to be paid to the canton is determined according to the current yield of ten-year federal bonds as of January 1 of the fiscal year, plus a surcharge of 0.5 percent, and amounts to a minimum of 3.0 and a maximum of 5.5 percent. The interest rate is rounded to one decimal place. The interest payment is due on January 31 of the fiscal year.

3. The contracting cantons may grant the ILZ loans, which are to bear interest at market conditions.

1. Each member canton may delegate two members from its cantonal parliament to the interparliamentary audit commission.

2. The commission constitutes itself.

3. It fulfills its tasks by

a. taking a position on the annual report, the annual financial statements, and the audit report before approval by the governments of the member cantons;

b. informing the cantonal parliaments of the member cantons about the execution of services within the scope of the audit;

c. being informed by the board of directors about the activities of the ILZ.

1. The Governments of the Agreement Cantons

a. * elect the members of the Board of Directors of the ILZ for a term of four years, and from among them, a President;

b. appoint the audit office;

c. annually approve the management report and, based on the audit report, the annual financial statements of the ILZ;

d. * ...

1. The Organs of the ILZ are

a. the Administrative Board;

b. the Executive Management;

c. the Audit Office.

1. The Board of Directors composed of five members consists of

a. two members elected by each of the two governments,

b. the fifth member jointly designated by the two governments upon the proposal of the four members.

2. The Board of Directors constitutes itself with the exception of electing its presidency. It establishes its rules of procedure, particularly regulating decision-making, signatory authority, and the remuneration of members.

3. The Managing Director of the ILZ has an advisory vote and the right to submit proposals.

1. The Board of Directors

a. is responsible for the organization and operation of the ILZ;

b. approves the budget of the ILZ;

c. exercises direct supervision over the management;

d. prepares the annual report and financial statements, and reviews the audit report;

e. informs the Interparliamentary Audit Commission and the governments of the agreement cantons annually about the execution of services and orders, as well as the audit report;

f. appoints the Director of the ILZ;

g. issues personnel regulations in accordance with Art. 14 of this agreement.

1. The Executive Management fulfills its duties by specifically

a. being responsible for the management of the business;

b. fulfilling the orders issued to the ILZ;

c. ensuring controlling and reporting;

d. concluding public-law employment contracts with employees;

e. rendering an account to the Board of Directors;

f. preparing the Board of Directors' affairs.

2. The Executive Management is furthermore vested with all powers not assigned to another body. Powers vested in it may be further delegated.

1. The audit authority shall annually examine the accounts in accordance with statutory regulations and recognized auditing standards, as well as the correctness of the performance and effect data.

2. It shall report and make recommendations to the board of directors.

1. The ILZ ensures through organizational and technical measures that the Federal data protection regulations and the agreements of the cantons are complied with and that data security is guaranteed at all times.

1. The ILZ employs its staff in accordance with the public law provisions of the legislation of the Canton of Obwalden. It may deviate from these in terms of working hours, salary, premiums, and allowances if special circumstances justify it.

2. Disputes are decided by the Administrative Court of the Canton of Obwalden.

1. All employees of the ILZ, as well as any auxiliary persons involved, are subject to official secrecy in accordance with the provisions of the State Administration Act of the Canton of Obwalden.

1. Liability of the ILZ as well as the responsibility of its organs and personnel for sovereign activities are governed by the provisions of the legislation of the Canton of Obwalden. The competent authority for decision-making is the Administrative Court of the Canton of Obwalden.

2. In all other cases, federal civil law applies.

1. The ILZ prepares an annual financial statement. This consists of the balance sheet, the income statement, and the notes.

2. The annual financial statement shall be prepared in accordance with the provisions of the Swiss Code of Obligations regarding the proper accounting of corporations. More extensive financial reporting is permissible.

1. For services, market prices are charged, which generally must cover costs and allow for a reasonable profit. This is assessed with regular price benchmarks.

2. If the provisional annual financial statements show an annual profit of more than 10 percent of the endowment capital and the general reserves can be covered, price discounts based on the ordered user services must be granted to the two cantons and the municipalities, charged to the same annual financial statements.

1. The annual result determined after deducting additional depreciation on fixed assets and price discounts is used for

a) * the creation of general reserves to cover potential losses until the amount reaches 30 percent of the endowment capital;

b) * the creation of free reserves;

c) * any potential profit carried forward to the next fiscal year.

2. The free reserves can be utilized

a) for financing activities within the framework of fulfilling and improving the service mandate;

b) for distributions, half of which go to the contracting cantons, provided that the general and free reserves together exceed 50 percent of the endowment capital.

1. The ILZ is exempt from all cantonal and municipal taxes for its activities in fulfilling the orders of the agreeing cantons and municipalities.

1. The agreement is valid for an indefinite duration.

2. The governments of the cantons party to the agreement may terminate it by giving two years' notice to the end of a year, for the first time on December 31, 2027.

3. In the event of termination, the detailed exit modalities are to be separately regulated between the ILZ and the cantons party to the agreement.

1. Upon dissolution of the agreement, assets and liabilities shall be divided among the contracting cantons in accordance with the actual benefits received over the past four years.

2. Each canton is jointly and severally liable for the obligations of the ILZ incurred during its membership.

1. Disputes between the signatory cantons shall be decided by an arbitral tribunal.

2. The arbitral tribunal shall consist of five members. Each disputing party shall appoint two representatives. These representatives shall jointly appoint a president.

3. The proceedings shall be governed mutatis mutandis by the provisions on arbitration in the Swiss Code of Civil Procedure (Civil Procedure Code, CPC).

1. This agreement shall enter into force on January 1, 2002, following approval by the constitutionally competent authorities.