With the recent growth in interlocal contracts for municipal service delivery, insufficient attention has been given to city governments that choose to terminate interlocal contracts. The termination of interlocal contracts deserves scrutiny because theory points to multiple possible explanations for service change. This research examines the termination of interlocal contracts for police service delivery by California cities between 2001 and 2010. Public documents from the nine cities that terminated interlocal contracts are analyzed to assess rationale for termination. The stated reasons for termination include problems related to community responsiveness, the contract relationship, local control, service cost, service levels, and staffing. Grounded theory is advanced through analysis of the nine cities. The research refines our understanding of how cities weigh the costs and benefits of in-house production versus production through interlocal contract. While contract failure is evident in some cities, termination may also be explained as a process of vertical integration and service expansion. The research refines theories about local government service delivery and informs the practice of interlocal contract management.
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