How do two Arkansas cities formally amend their joint sewer agreement, and what does the AG check before approving it?

Plain-English summary

Cotter and Gassville submitted an amendment to their interlocal agreement for improvements to a wastewater collection system they jointly operate. The Interlocal Cooperation Act required the AG to review whether their joint agreement was proper in form and consistent with state law.

Then-Attorney General Leslie Rutledge reviewed Amendment No. 3 and approved it. The amendment by itself did not include the two structural items the Act requires when no separate legal entity is created (an administrator or joint board, and a manner of acquiring and disposing of joint property). But the cities' 1975 original agreement already addressed both, paragraph "NINTH" set up a "Board of Sewer Commissioners," and paragraph "ELEVENTH" handled joint property. The amendment's standard incorporation clause, providing that "all terms and conditions of the original agreement and amendments thereto shall remain as previously agreed to unless specifically changed by this amendment," was enough to carry those provisions forward.

The opinion also clarified one minor procedural point: the AG's approval is signified by the formal opinion itself, not by signing the agreement, because the Interlocal Cooperation Act does not make the Attorney General a signatory.

Currency note

This opinion was issued in 2021. 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 does an Arkansas interlocal agreement actually have to spell out? Under § 25-20-104(c), every interlocal agreement for joint or cooperative action must specify: duration, purposes, financing and budget, methods of termination and property disposal on termination, and any other necessary or proper matters. The opinion adds that § 25-20-104(d), for agreements that do not create a separate legal entity, the requirement to name an administrator or joint board and to set out how real and personal property will be acquired, held, and disposed of.

Why did the AG accept the cities' "incorporation by reference" approach? The opinion read the amendment's clause that all original terms remain in effect "unless specifically changed by this amendment" as carrying forward the original agreement's joint-board and property provisions. Practically, that meant the cities did not have to restate every governance term every time they amended a single line.

Who has to ask the AG for this certification?
The opinion is addressed to attorney Roger L. Morgan of Sanders, Morgan & Clarke PLLC, who submitted the amendment for review.

Did the AG sign the agreement itself?
No. Citing Op. Att'y Gen. 2004-194, the opinion noted that the Interlocal Cooperation Act does not provide for the AG to be a signatory; the formal opinion is the approval mechanism.

Background and statutory framework

The Interlocal Cooperation Act (§ 25-20-101 et seq.) governs the cities' joint undertaking. The point, as § 25-20-102 puts it, is "to permit local governmental units to make the most efficient use of their powers by enabling them to cooperate with other localities on a basis of mutual advantage."

The Act requires AG approval under § 25-20-104(f) when an interlocal agreement undertakes a joint enterprise between or among public agencies. The AG must find it "proper in form and consistent with state law." The AG compared the amendment and incorporated terms of the 1975 agreement with the statutory list, then approved the agreement.

Citations

Statutes:

• Ark. Code Ann. § 25-20-101 et seq. (Interlocal Cooperation Act, Repl. 2014 and Supp. 2019)
• Ark. Code Ann. § 25-20-102 (Repl. 2014)
• Ark. Code Ann. § 25-20-104(c) (Repl. 2014) (required terms)
• Ark. Code Ann. § 25-20-104(d) (Repl. 2014) (additional requirements when no separate entity)
• Ark. Code Ann. § 25-20-104(f) (Repl. 2014) (AG review requirement)

Prior AG opinions:

• Op. Att'y Gen. 2004-194

Source

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

Original opinion text

STATE OF ARKANSAS
Tm: ATTORNEY GENERAL
LESLIE R UTLEDGE

Opinion No. 2021-014

February 24, 2021

Roger L. Morgan, Esq.
Sanders, Morgan & Clarke PLLC
701 South Street
P. 0. Box 2308
Mountain Home, AR 72654

Dear Mr. Morgan:

You have requested approval, pursuant to the Interlocal Cooperation Act, 1 of an agreement to amend an existing interlocal agreement between the City of Cotter, Arkansas, and the City of Gassville, Arkansas. 2 You have submitted a copy of the agreement, entitled "Amendment No. 3 to Interlocal Cooperation Agreement," the terms of which provide for the parties' cooperation in making improvements to the existing wastewater collection system that they jointly operate .

You seek 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. 3

1
Ark. Code Ann . § 25-20-101, et seq. (Repl. 2014 and Supp. 2019).

2
The original Interlocal Cooperation Agreement was executed on February 19, 1975, and filed of record on February 21, 1975.

3
Ark. Code Ann.§ 25-20-104(f) (Repl. 2014). The purpose of the Interlocal Cooperation Act is " to permit local governmental units to make the most efficient use of their powers by enabling them to cooperate with other localities on a basis of mutual advantage." Id. at § 25-20-102 (Rep I. 2014 ).

323 CENT ER STR EET. SU ITE 200 •LITT LE R OC K , AR KANS AS 72201 T ELE PHO NE (50 I) 682-2007 • F AX (50 I) 68 2-8084 I NT ERNET WLB SITE . http://www.ag.s tate.a r.us/

Roger L. Morgan, Esq.
Opinion No. 2021-014
Page 2

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 purposes of the agreement;

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

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

(5) Any other necessary and proper matters. 4

In addition, if the inter local agreement does not establish a separate legal entity to conduct the joint or cooperative undertaking, it must contain the following:

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

(2) The manner of acquiring, holding, and disposing of real and personal property, if any, used in the joint or cooperative undertaking. 5

Having reviewed the "Amendment No. 3 to Interlocal Cooperation Agreement" with the above requirements in mind, I note that the agreement does not specifically reference an administrator or joint board; nor does it specifically address the ownership or disposal of property-items required by the Interlocal Cooperation Act. 6 However, these items are addressed by the original 1975 Interlocal Cooperation Agreement at para. "NINTH" (establishing a "Board of Sewer Commissioners") and "ELEVENTH" (addressing "joint property" ownership and disposal). And the agreement submitted for my approval provides that "all terms

4
Id. at § 25-20-104( c ).

5
Id. at § 25-20-104( d).

Roger L. Morgan, Esq.
Opinion No. 2021-014
Page 3

and conditions of the original agreement and amendments thereto shall remain as previously agreed to unless specifically changed by this amendment." 7 This language appears to incorporate the noted provisions of the original agreement and amendments regarding a joint board and joint property. With that understanding, I conclude that the requirements of the Interlocal Cooperation Act in this respect are satisfied.

According to my review, the agreement you submitted also complies with the other requirements set forth above. Because all of the requirements of the Interlocal Cooperation Act appear to be satisfied, the agreement is approved. 8

Sincerely,

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LESLIE RUTLEDGE
Attorney General

7
Amendment No. 4 to Interlocal Cooperation Agreement at para. (2).

8
You have asked me to signify my approval by signing the agreement.
However, the Interlocal Cooperation Act does not provide for the Attorney General to become a signatory to agreements approved pursuant to the Act. See Op. Att'y Gen. 2004-194 (and opinions cited therein). My formal opinion is sufficient to signify the Attorney General's approval. Id.