Could the cities of Springdale and Johnson, Arkansas enter an interlocal agreement to jointly design and do environmental work for a 56th Street widening project?

Plain-English summary

Springdale City Attorney Ernest Cate submitted a proposed Interlocal Agreement between the City of Springdale and the City of Johnson for AG review under the Arkansas Interlocal Cooperation Act (A.C.A. § 25-20-101 et seq.). The Act requires the AG to certify that any interlocal agreement between Arkansas public agencies is "proper in form and consistent with state law" before it can take effect (A.C.A. § 25-20-104(f)).

The agreement covered "Phase I" of a 56th Street Extension Project, specifically the design and environmental work for widening and extending 56th Street from Don Tyson Parkway to Johnson Mill Boulevard.

AG Dustin McDaniel approved it. The opinion confirms:

1. Both cities qualify as public agencies under A.C.A. § 25-20-103(1) (which includes any "political subdivision of this state").

2. The Act permits this kind of undertaking. A.C.A. § 25-20-104(a) lets two public agencies jointly exercise any power either of them could exercise alone, so long as both have the same power. Both Springdale and Johnson have authority over street design and construction within their boundaries, so a joint design and environmental work project fits.

3. The agreement specifies all six required items for any interlocal agreement under § 25-20-104(c): duration, identity of any separate legal entity, purposes, manner of financing, methods of termination and property disposal, and other necessary matters.

4. Because the agreement does not establish a separate legal entity, it also satisfies § 25-20-104(d) by naming an administrator. Section 2 of the agreement designates the Mayor of Springdale as the administrator of the project. That dispenses with the need for a separate joint board or new corporate entity.

5. The duration provision is sufficient. Section 3 says the agreement remains in effect for Phase I until final acceptance and close-out is obtained from the Arkansas Highway and Transportation Department. That provides a clear endpoint, satisfying § 25-20-104(c)(5).

With those boxes checked, the AG approved the agreement as submitted.

Currency note

This opinion was issued in 2014. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

What is an interlocal cooperation agreement in Arkansas?
It's a written contract between two or more Arkansas "public agencies" (cities, counties, school districts, state agencies, and similar political subdivisions) to jointly exercise a power that any one of them could exercise alone. The Interlocal Cooperation Act, A.C.A. § 25-20-101 et seq., is the authorizing statute. Common uses include shared police/fire services, joint road projects, regional planning, and shared facilities.

Does an Arkansas interlocal agreement need AG approval?
At the time of this opinion, yes. A.C.A. § 25-20-104(f) required the AG to certify that the agreement is "proper in form and consistent with state law" before it can take effect. The AG's review focuses on statutory compliance, not on the policy merits of the underlying project.

What must an Arkansas interlocal agreement include?
The six required elements under A.C.A. § 25-20-104(c) are: (1) duration, (2) identity of any separate legal entity created to conduct the work, (3) purposes, (4) financing and budgeting, (5) termination methods and property disposal, and (6) other necessary matters. If the agreement does not create a separate legal entity, A.C.A. § 25-20-104(d) adds two more required items: (7) an administrator or joint board, and (8) how property used in the undertaking will be acquired, held, and disposed of.

Do both cities need the same statutory authority for the joint project?
Yes. A.C.A. § 25-20-104(a) says public agencies may jointly exercise "[a]ny governmental powers, privileges, or authority exercised or capable of exercise by a public agency of this state alone... with any other public agency of this state which has the same powers, privileges, or authority under the law."

Can the AG reject an interlocal agreement?
Yes. The AG can decline to approve an agreement that's missing required elements, exceeds the statutory authority of one or both parties, or conflicts with other state law. The opinion is reviewed for form and statutory consistency, not for the wisdom of the policy choice.

Does naming a Mayor as administrator avoid needing a separate legal entity?
Yes. Under § 25-20-104(d), an agreement that does not create a new entity must designate either an administrator or a joint board "responsible for administering the joint or cooperative undertaking." Naming a single Mayor satisfies that.

Background and statutory framework

The Arkansas Interlocal Cooperation Act, A.C.A. §§ 25-20-101 et seq., implements the idea that municipalities and other state subdivisions should be able to pool resources to do things together that they could each do separately, without having to create new permanent intergovernmental institutions. The AG-approval requirement at A.C.A. § 25-20-104(f) functions as a check on form and statutory compliance.

The specific provisions the 2014 opinion walks through:

• A.C.A. § 25-20-103(1): defines "public agency" to include political subdivisions of the state. Cities clearly qualify.
• A.C.A. § 25-20-104(a): scope of permissible joint action. Two public agencies may jointly exercise any power that either of them has under law, as long as both have the same power.
• A.C.A. § 25-20-104(c): six required elements of any interlocal agreement.
• A.C.A. § 25-20-104(d): two additional required elements if the agreement does not create a separate legal entity.
• A.C.A. § 25-20-104(f): AG approval requirement.

The 56th Street project context: the agreement covered "Phase I" only (design and environmental work), implying a larger project to follow. The Arkansas Highway and Transportation Department (now Arkansas Department of Transportation) was the relevant state body for project close-out. The agreement's tie to ARDOT close-out provides a clear external trigger for termination, which is exactly the kind of definite duration § 25-20-104(c)(1) and (c)(5) contemplate.

This is a routine approval opinion. The AG's substantive analysis is short because the agreement was well drafted. The value of this type of opinion is procedural: it gives the parties a clean record that the agreement was reviewed and approved by the state's chief legal officer before they began executing it.

Citations

• A.C.A. § 25-20-101 et seq. (Interlocal Cooperation Act)
• A.C.A. § 25-20-103(1) (Supp. 2013) (definition of "public agency")
• A.C.A. § 25-20-104(a) (scope of permissible joint action)
• A.C.A. § 25-20-104(c) (six required elements of an interlocal agreement)
• A.C.A. § 25-20-104(d) (two additional elements when no separate entity is created)
• A.C.A. § 25-20-104(f) (Supp. 2013) (AG approval requirement)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

STATE OF ARKANSAS

THE ATTORNEY GENERAL
Dustin McDANIEL

Opinion No. 2014-053

June 12, 2014

Mr. Ernest B. Cate, City Attorney
City of Springdale

201 North Spring Street
Springdale, Arkansas 72764

Dear Mr. Cate:

You have requested approval, pursuant to the Interlocal Cooperation Act (A.C.A.
§ 25-20-101 et seq.), of a proposed "Interlocal Agreement" between the City of
Springdale, Arkansas and the City of Johnson, Arkansas. You have submitted a
copy of the Agreement, under the terms of which the parties agree to undertake the
design and environmental work associated with the widening and extension of
56th Street from Don Tyson Parkway to Johnson Mill Boulevard. You are
seeking my approval of the Agreement pursuant to the statutory requirement that I
approve as proper in form and consistent with state law any interlocal agreement
to undertake a joint enterprise between or among "public agencies."

The Agreement refers to this as "Phase I" of the "56th Street Extension Project." So this "Phase"
apparently is part of a larger project which is not the subject of your submission.

A.C.A. § 25-20-104(f) (Supp. 2013). The Cities of Springdale and Johnson clearly qualify as "public
agencies" as that term is defined at A.C.A. § 25-20-103(1) (Supp. 2013) (including within the definition of
"public agency" any "[p]olitical subdivision of this state").

With respect to the range of permissible agreements under the Interlocal Cooperation Act, subsection 25-
20-104(a) provides in pertinent part that "[a]ny governmental powers, privileges, or authority exercised or
capable of exercise by a public agency of this state alone may be exercised and enjoyed jointly with any
other public agency of this state which has the same powers, privileges, or authority under the law...." In
my opinion, this grant of authority would generally include an agreement between two political
subdivisions such as Springdale and Johnson to cooperate in the design and other work associated with a
street-widening and extension project.

The Interlocal Cooperation Act requires that interlocal agreements for joint or
cooperative action specify the following items:

(1) The duration of the agreement;

(2) The identity of any separate legal entity to conduct the
undertaking;

(3) The purposes of the agreement;

(4) The manner of financing the joint or cooperative undertaking and
of establishing and maintaining a budget for it;

(5) The methods of accomplishing termination of the agreement and
for the disposal of property (if any) upon termination;

(6) Any other necessary and proper matters.

In addition, if the interlocal agreement does not establish a separate legal entity to
conduct the joint or cooperative undertaking, it must specify the following items:

(1) The provision for an administrator or a joint board that will be
responsible for administering the joint or cooperative undertaking;

(2) The manner of acquiring, holding, and disposing of real and
personal property (if any) used in the joint or cooperative
undertaking.

Having reviewed the Agreement, I find that it meets all of the requirements set
forth above. Accordingly, I hereby approve the Agreement as submitted.

I note in particular that the Agreement, in Section 2, authorizes the Mayor of Springdale to administer the
project, thereby dispensing with the need to establish a separate entity to conduct the undertaking. See
A.C.A. § 25-20-104(d)(1). And it provides, in Section 3, that the Agreement "shall remain in effect for
Phase I until such time as final acceptance and close out has been obtained from the Arkansas Highway and
Transportation Department." This appears sufficient to meet the Interlocal Agreement Act's requirement
with respect to an agreement's termination. See id. at (c)(5).

Deputy Attorney General Elisabeth A. Walker prepared the foregoing opinion,
which I hereby approve.

Sincerely,

DUSTIN McDANIEL
Attorney General

DM/EAW:cyh