Can an Arkansas city council reduce a newly appointed city attorney's total pay by getting rid of his office-expense stipend?

Plain-English summary

Senator Kim Hammer asked whether Benton could remove an office-expense stipend from the compensation package for a city attorney appointed to finish an unexpired term. The departing attorney's package included salary, a stipend of about $36,000 a year, health insurance, and retirement benefits. The question was whether removing the stipend would decrease "salary" during the term in violation of Ark. Code Ann. § 14-42-113.

Attorney General Leslie Rutledge said the answer depends on how the stipend is paid. She had no facts about those payment arrangements and could not definitively classify it as salary. Reimbursement after submitting office-expense receipts, up to an annual limit, would likely be an expense payment rather than salary. Fixed, regular stipend payments made alongside salary, with the attorney paying office costs out of pocket, would likely be salary. She advised making any decision with local counsel after reviewing the circumstances.

The opinion also quoted § 14-42-113(a): an official's salary may be decreased during a term only at the official's request, subject to statutory exceptions. If an official whose salary was decreased under that provision leaves before the term expires, the successor must receive at least the salary for the office immediately before that decrease.

Currency note

This opinion was issued in 2020. Later law or decisions may have changed the analysis. Check current law before relying on its compensation guidance.

Common questions

Is an office-expense stipend automatically part of salary?

No. The AG treated the answer as a question of fact. She compared reimbursement based on receipts with fixed, regular payments made alongside salary and said the two arrangements likely would be classified differently.

Did the AG decide whether Benton could remove this stipend?

No. She did not have information about how the stipend was paid and advised a decision with local counsel after considering the circumstances.

Why did the AG mention the appointed successor?

The question concerned an attorney appointed to finish an unexpired term. Ark. Code Ann. § 14-42-113(a)(2) protects a successor's salary when an earlier official's salary was decreased under subsection (a)(1) before leaving office.

What did the Crain citation add?

In a footnote, the AG said unreasonable reductions in elected officials' salaries have led to successful lawsuits. She cited Crain v. City of Mountain Home, in which a federal court struck down an ordinance reducing a city attorney's salary and barring private practice on the eve of an election.

Background and statutory framework

Ark. Code Ann. § 14-42-113(a)(1) governs increases and decreases during an elected or appointed city official's term. Subsection (a)(2) sets a salary floor for a successor when the previous officeholder received a decrease under (a)(1) and left before the term ended. The AG did not decide whether Benton's stipend was salary under these provisions.

Citations

Statutes:

• Ark. Code Ann. § 14-42-113 (Supp. 2019) (midterm salary changes for city officials)
• Ark. Code Ann. § 14-42-113(a) (no decrease except at official's request; successor protection)
• Ark. Code Ann. § 14-43-412 (Supp. 2019) (appointment to fill vacancy)

Cases:

• Crain v. City of Mountain Home, 611 F.2d 726 (8th Cir. 1979) (ordinance reducing city attorney's salary as unconstitutional bill of attainder)

Prior opinion referenced:

• Op. Att'y Gen. 2019-029 (AG declines to make factual determinations)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/
• Official PDF: https://opinionstorage.blob.core.windows.net/opinions/2020-020.pdf

Original opinion text

STATE OF ARKANSAS
THE ATTOl{ NEY GENERAL
LESLI E R UTLEDGE

Opinion No. 2020-020

August 20, 2020

The Honorable Kirn D. Hammer
State Senator
1201 Military Road PMB 285
Benton, AR 72015

Dear Senator Hammer:

This is in response to your request for an opinion concerning Ark. Code Ann. § 14- 42-113. In this regard, you have provided the following background information:

The City of Benton, Arkansas, is a city of the first class. The city attorney is elected to a four-year term. The present city attorney, who is in the second year of a four-year term, has been elected circuit judge and will take the judgeship office at the mid-point of his city attorney term. The vacancy in the office of city attorney will leave an unexpired term of two (2) years that will be filled by appointment under Ark. Code Ann . § 14-43-412, based on my understanding.

By ordinance, the compensation of the city attorney includes a salary, a stipend for office expenses, health insurance, and retirement benefits. The city council is considering modifying the compensation package by removing the stipend for office expenses, an amount that equals approximately $36,000.00 per year, thereby lowering the total amount of compensation the newly-appointed city attorney will receive. Ark Code Ann. § 14-42-113 states a city council may not decrease the "salary" of a city official during his or her term of office.
"Salary" is defined in the statute as the amount of "compensation" the official receives.

In light of the foregoing background information, you have asked the following question:

323 CENTE R STREET. SU IT E 200 •LITTL E R OCK , ARKANSAS 7220 1 TELEPHONE ( 50 I) 682-2007 • FAX ( 50 I ) 682-8084 I NTER NET WEBSITE. http://www.ag.state.ar.us/

The Honorable Kim D. Hammer
State Senator
Opinion No. 2020-020
Page 2

Based on this information, may the city council lower the total amount of compensation the appointed city attorney will receive by removing the stipend for office expenses in light of the language of Ark. Code Ann.§ 14-42-113?

RESPONSE

The answer to your question depends on whether the stipend for office expenses is considered salary. This is a factual question that cannot be definitively decided in the context of an opinion from this office.

DISCUSSION

Subdivision 14-42-l 13(a)(l) of the Arkansas Code prohibits decreasing a city official's salary during his or her term unless requested by the official; and subdivision l 4-42-1l3(a)(2) requires that when an official whose salary has been decreased pursuant to (a)(l) leaves office prior to the expiration of his or her term, the official's successor shall receive a salary not less than the salary the exiting official received prior to the decrease. 1 Therefore, whether the city council may lower an appointed city attorney's total compensation by removing his or her stipend for office expenses depends on whether the stipend is considered ·'salary.''

I do not have any information regarding how the stipend in question is paid to the city attorney. Whether the stipend payments can be considered salary is ultimately a question of fact that cannot be decided by this office. 2 If, for example, the city

1
Ark. Code Ann. § 14-42-113(a) (Supp. 2019) provides as follows:

(a)( 1) Except as provided in subsections (b) and (c) of this section, the salary of an official of a city of the first class, a city of the second class, or an incorporated town may be increased during the term for which the official has been elected or appointed and may be decreased during the term only if requested by the official.

(2) When any city official whose salary is decreased under subdivision (a)( 1) of this section leaves office before the expiration of his or her term, his or her successor shall receive a salary not less than the salary for the office immediately before the salary was decreased under subdivision (a)( 1) of this section.

2
See, e.g., Op. Att'y Gen. 2019-029 (noting this office's long-standing policy of declining to make factual determinations in the context of rendering official opinions).

The Honorable Kim D. Hammer
State Senator
Opinion No. 2020-020
Page 3

attorney must submit receipts for office expenses, after which he or she is reimbursed with stipend funds up to $30,000 annually, these payments to the city attorney would likely not constitute salary. On the other hand, if the city attorney receives fixed, regular payments of stipend funds along with his or her salary, and the city attorney is expected to pay for office expenses out-of-pocket, then the stipend payments would likely be considered salary. A decision regarding the potential elimination of the city attorney's stipend should be made with the advice of local counsel, taking into consideration all of the particular surrounding circumstances. 3

Sincerely,

..c::-...

LESLIE RUTLEDGE
Attorney General

3
Acting under the advice of local counsel is especially important, given that attempts to unreasonably reduce the salary of elected officials have led to successful lawsuits against cities. See, e.g., Crain v. City of Mountain Home, 611 F.2d 726 (8th Cir. 1979) (striking down as unconstitutional an ordinance passed on the eve of the election reducing city attorney's salary and prohibiting him from the private practice of law as an unconstitutional bill of attainder and also awarding attorneys' fees).