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 AG Leslie Rutledge a Benton-specific compensation question with a deadline. The City of Benton's elected city attorney had been elected to a four-year term but had won election as circuit judge mid-term. He would step down at the two-year mark, and the city council would appoint a successor under Ark. Code Ann. § 14-43-412 to fill the remaining two years.

The departing city attorney's compensation package included salary, a $36,000-per-year office-expense stipend, health insurance, and retirement benefits. The council was considering removing the stipend for the appointed successor. The question: would that violate Ark. Code Ann. § 14-42-113, which prohibits decreasing the "salary" of a city official during his or her term?

AG Rutledge declined to give a yes-or-no, calling the answer fact-dependent. The dispositive question was whether the stipend qualified as "salary" under § 14-42-113.

The statute's text, in subdivision 14-42-113(a)(1), prohibits decreasing a city official's salary during his or her term unless requested by the official; subdivision 14-42-113(a)(2) requires that when an official whose salary has been decreased leaves office before the expiration of his or her term, the successor must receive a salary not less than the salary the prior official received before the decrease.

So if the stipend is salary, two things follow. First, the city could not have decreased it for the original city attorney (and he hadn't asked for the decrease). Second, the successor must receive a salary not less than what the original city attorney was getting before any decrease. Removing the stipend would put the council in violation.

If the stipend is not salary, removing it is fine. Section 14-42-113 only protects salary, not other compensation components.

The AG laid out two ends of a continuum. If the city attorney has to submit receipts to be reimbursed up to a stipend cap, the payments are essentially expense reimbursement and likely not salary. If the city attorney instead receives fixed, regular stipend payments along with his salary and is expected to cover his office expenses out of pocket from those payments, the stipend functions as additional compensation and likely is salary. Anything in between requires the city's local counsel to look at the actual mechanics.

The opinion's footnote 3 added a caution from Crain v. City of Mountain Home, 611 F.2d 726 (8th Cir. 1979), which struck down on bill-of-attainder grounds an ordinance that reduced a city attorney's salary and barred private practice on the eve of an election, plus awarded attorneys' fees. The AG was reminding the council that aggressive reductions invite federal lawsuits.

This opinion is short because it turns on a fact question the AG cannot resolve from her office. The practical answer for the council was: get the stipend's actual payment mechanics in front of local counsel before cutting it.

Currency note

This opinion was issued in 2020. 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

Why didn't the AG just answer the question?
Because Arkansas AG opinions don't make factual determinations. Whether the stipend qualifies as salary depends on how it is actually paid (reimbursement on receipts versus fixed regular amounts), and the AG had no way to verify those facts. Op. Att'y Gen. 2019-029 reflects the office's longstanding policy of declining factual determinations.

What was the practical test the AG offered?
Two scenarios. (a) If the city attorney must submit receipts and is reimbursed up to $30,000 annually, the stipend likely is not salary; it is an expense-reimbursement program. (b) If the city attorney receives fixed, regular stipend payments along with his salary and pays office expenses out of pocket, the stipend likely is salary; it is part of his compensation package.

Why does it matter that he was the appointed successor?
Because § 14-42-113(a)(2) protects the successor specifically. Even if the council had not violated the statute by not lowering the prior officeholder's salary, the new officeholder's "salary" must be at least what the prior officeholder received before any decrease. So a midterm decision to remove a "salary" component cannot be done by switching from elected officeholder to appointed successor.

Could the original city attorney have agreed to a decrease?
Yes, under § 14-42-113(a)(1), if the official requested it. But the framing of the question suggests no such request was made.

Why did the AG cite Crain v. City of Mountain Home?
As a warning. Crain held that an ordinance reducing a city attorney's salary and limiting his private practice, passed on the eve of his election, was an unconstitutional bill of attainder. Even if cutting the stipend were legal under Arkansas statute, federal constitutional concerns could arise from a reduction targeted in suspicious circumstances. The case also awarded attorneys' fees. The AG was telling the council not to walk into that.

Could the council reduce the salary going forward, after the appointed term ends?
The opinion did not address that question directly. Section 14-42-113(a) prohibits midterm decreases. A reduction that takes effect at the start of a new term (which would be a future general election) would not run afoul of the same provision, but the council should still confirm with counsel.

Background and statutory framework

Ark. Code Ann. § 14-42-113 is the Arkansas statute on midterm changes to municipal-official compensation. Subsection (a)(1) allows mid-term increases freely but allows mid-term decreases only at the official's request, and only under the procedures set out in subsections (b) and (c). Subsection (a)(2) is the successor-protection rule.

The statute defines "salary" to mean the amount of "compensation" the official receives. That definition is the source of the trouble in this opinion: "compensation" is broader than just the line on the pay stub labeled "salary," but how broadly it sweeps depends on the substance of how each compensation component is paid.

Ark. Code Ann. § 14-43-412 (Supp. 2019) is the appointment statute. When a city official's term has time left and the office is vacated, the city council appoints a successor for the remainder of the term.

Crain v. City of Mountain Home, 611 F.2d 726 (8th Cir. 1979), is the federal-court precedent the AG cited. It struck down an ordinance reducing a city attorney's salary and barring private practice as an unconstitutional bill of attainder, and awarded attorneys' fees. The case is a reminder that political timing of compensation reductions matters.

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/

Original opinion text

Opinion No. 2020-020
August 20, 2020
STATE OF ARKANSAS
THE ATTORNEY GENERAL
LESLIE RUTLEDGE
The Honorable Kim 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:

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 14-42-113(a)(1) of the Arkansas Code prohibits decreasing a city official's salary during his or her term unless requested by the official; and subdivision 14-42-113(a)(2) requires that when an official whose salary has been decreased pursuant to (a)(1) 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. 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. If, for example, the city 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.

Sincerely,

LESLIE RUTLEDGE
Attorney General

[Footnote 3, reproduced: 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).]