(1) The local governments that are parties to a contract entered into pursuant to this act have the responsibility, authority, and right to manage and direct on behalf of the public the functions or services performed or exercised in connection with the contract.

    (2) The following are prohibited subjects of collective bargaining between a local government and a bargaining representative of its employees:

    (a) A decision as to whether or not the local government will enter into a contract for a joint endeavor pursuant to this act for or in connection with 1 or more functions or services.

    (b) The procedures for obtaining the contract for a joint endeavor pursuant to this act.

    (c) The identities of the other parties to the contract for a joint endeavor pursuant to this act.

    (3) Except as otherwise provided in this section, the contents or language of a contract for a joint endeavor under this act shall be a permissive subject of collective bargaining between a local government and a bargaining representative of its employees. If a local government and a bargaining representative of its employees engage in collective bargaining before the contract for a joint endeavor is approved as provided in section 3(2) and that local government and that bargaining representative reach an agreement on issues that would obligate an entity that will function as an employer in the joint endeavor, then the contract for that joint endeavor shall include those obligations.

    (4) Nothing in this act creates an employment relationship between the existing employees of a local government or a public agency and the proposed joint endeavor.

    (5) Nothing in this act relieves a local government of the duty, to the extent a duty exists under applicable law, to collectively bargain with its employees over the effect of the joint endeavor on its employees.