Is Arkansas AG Opinion 89-230 (Horseshoe Bend improvement district) still good law?

Plain-English summary

State Representative Steven Walker asked whether two conclusions in Arkansas AG Opinion 89-230 remained valid. The AG answered them separately. First, the earlier conclusion that the Horseshoe Bend Municipal Recreation Facilities Improvement District could transfer property to the city remained sound, even though some district property owners lived outside city limits. The AG found no relevant statutory change or later Arkansas case affecting that analysis.

Second, the earlier opinion's $1,200 annual cap on compensation for the district's attorney was no longer valid. The General Assembly removed that cap in 1995. The official PDF's footnote 6 also says the statute's city-attorney language changed from “shall” to “may” under Acts 1995, No. 362, § 1; footnote 9 cites that Act for the cap's removal. The opinion does not set a replacement dollar cap or evaluate any proposed attorney fee.

What this means for you

Horseshoe Bend improvement district commissioners

The AG reaffirmed the earlier opinion's conclusion that this district may transfer some property to the City of Horseshoe Bend despite some owners living outside city limits. The cited statute permits a sale or lease of an improvement, or part of it, to the city or town when the board deems it in the district's best interest. The opinion does not address a particular transaction's title, procedure, or terms.

District and city attorneys

The $1,200 limit discussed in Opinion 89-230 no longer applies under the statute cited here. The AG says the district may employ a private attorney in lieu of the city attorney and quotes the current compensation rule as “such fees as may be agreed upon by the boards.” It does not decide what fee amount is appropriate in a given case.

Common questions

Is Opinion 89-230 still valid on transferring district property to Horseshoe Bend?
Yes. Opinion 2023-016 agrees that the property-transfer conclusion remains sound.

Can an improvement district attorney receive more than $1,200 in a year?
The AG said the statutory $1,200 cap underlying Opinion 89-230 was removed in 1995, so that earlier cap conclusion is no longer valid.

Must the city attorney represent the improvement district?
The AG says a municipal improvement district may employ a private attorney in lieu of the city attorney. Footnote 6 records that the 1995 Act changed the relevant word from “shall” to “may.”

Background and statutory framework

Opinion 89-230 relied on A.C.A. §§ 14-88-201, 14-88-202, and 14-88-501 for the property's location and transfer question, and on Smart v. Gates for legislative authority involving district property outside city limits. Opinion 2023-016 says those authorities still support the first conclusion. A.C.A. § 14-88-406 governs district attorney service and compensation; its 1995 amendment removed the annual cap and changed the city-attorney language, as the PDF footnotes explain.

Citations

• A.C.A. § 14-88-201(b) (district formation outside city limits)
• A.C.A. § 14-88-501(a) (sale or lease of improvements to city or town)
• A.C.A. § 14-88-406(a) (city or private attorney)
• A.C.A. § 14-88-406(c) (attorney fees)
• Acts 1995, No. 362, § 1 (1995 changes)
• Smart v. Gates, 234 Ark. 858, 355 S.W.2d 184 (1962)

Source

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

Original opinion text

Opinion No. 2023-016
April 27, 2023
The Honorable Steven Walker
State Representative
408 Fairway Drive
Horseshoe Bend, AR 72512-2702

Dear Representative Walker:

I am writing in response to your request for my opinion on whether the conclusions and reasoning in Attorney General Opinion No. 89-230 are still valid.

RESPONSE

Opinion No. 89-230 contains two conclusions. The first conclusion, that the Horseshoe Bend Municipal Recreation Facilities Improvement District may transfer property to the City of Horseshoe Bend, is still sound. The second conclusion, that the maximum annual compensation for the city attorney or any other private attorney representing the improvement district is capped at $1,200, is no longer sound because the General Assembly has since amended the underlying statute to remove the compensation cap.

DISCUSSION

Attorney General Opinion No. 89-230 addresses two questions: (1) whether the commissioners of the Horseshoe Bend Municipal Recreation Facilities Improvement District No. 89-01 may transfer certain lakes and parks to the City of Horseshoe Bend, even though some of the district's property owners reside outside city limits; and (2) whether the $1,200 maximum annual compensation restriction in A.C.A. § 14-88-406(c) applies only to the city attorney or also to any private attorney representing the improvement district.

1. Conclusion 1, property transfers. In Opinion No. 89-230, my predecessor held that a municipal improvement district located partially inside the city limits of Horseshoe Bend could lawfully transfer some district property to the city, even though a few district property owners resided outside city limits. He based this determination on the plain language of A.C.A. §§ 14-88-201, 14-88-202, and 14-88-501. These statutes allow an improvement district to be formed "in whole or in part" outside of a city or town, and they explicitly authorize improvement districts to "sell or lease its improvement, or any part thereof, to the city or town" so long as the improvement board deems it to be in "the best interest of the district." None of these statutes state or imply that a board's ability to sell or lease property would be restricted whenever some improvement district property owners reside outside city limits.

Opinion No. 89-230 also relied on Smart v. Gates for support. That case upheld the validity of a sewer improvement district that embraced lands lying both inside and outside of city limits. The Court held, among other things, that the legislature may authorize a municipal corporation to assess lands lying inside an improvement district but beyond corporate limits. My predecessor reasoned that, similarly, the legislature has the power to authorize a municipal improvement district with property outside city limits to sell or lease its improvement to the city.

Neither A.C.A. §§ 14-88-201 nor 14-88-501 have been amended since Opinion No. 89-230 was issued, and A.C.A. § 14-88-202's recent amendments are not relevant here. Furthermore, no new Arkansas cases impact the opinion's analysis or conclusion. Consequently, the first part of Opinion No. 89-230 remains valid, and I agree with its reasoning.

Conclusion 2, attorney compensation cap. Under A.C.A. § 14-88-406, the city attorney serves as the attorney for local improvement district boards and commissioners, but municipal improvement districts may employ a private attorney in lieu of the city attorney. As compensation, the attorney receives "such fees as may be agreed upon by the boards."

The version of § 14-88-406 that was in effect when Opinion No. 89-230 was issued also capped the attorney's total annual compensation at $1,200. The second question in Opinion No. 89-230 asked whether this cap applied only to the city attorney or also to any private attorney representing the improvement district. Relying on the plain language of the statute, which did not distinguish between the city attorney or private attorney but only referenced "[t]he attorney," my predecessor concluded that the $1,200 cap applied to whichever attorney the improvement district chose to employ.

But the legislature removed the $1,200 cap in 1995. Therefore, Opinion No. 89-230's conclusion regarding the $1,200 salary cap is no longer valid.

Senior Assistant Attorney General Kelly Summerside prepared this opinion, which I hereby approve.

Sincerely,

TIM GRIFFIN
Attorney General

1 A.C.A. § 14-88-201(b) (Repl. 1998). See also A.C.A. § 14-88-202 (Supp. 2021) (allowing property assessments to be spent on improvements outside the boundaries of an improvement district and outside city or town limits if property inside the improvement district will benefit).

2 A.C.A. § 14-88-501(a) (Repl. 1998).

3 234 Ark. 858, 355 S.W.2d 184 (1962).

4 Id. at 860, 355 S.W.2d at 186 (“We see no merit in appellants’ contention that ‘The legislature cannot authorize a municipal corporation to tax lands lying beyond its corporate limits’ …. The legislature is invested with all power not prohibited by the constitution. The only limitation found in the constitution is Article 19, Section 27, which is that the assessments must be ad valorem and uniform and with the consent of a majority in value of the affected property holders.”).

5 See Acts 2013, No. 563, § 1.

6 A.C.A. § 14-88-406(a) (Repl. 1998). The version of A.C.A. § 14-88-406(a) in effect when Op. No. 89-230 was written stated that the city attorney “shall” be the attorney for local improvement district boards and commissioners. Since then, “shall” has been replaced with “may.” See Acts 1995, No. 362, § 1.

7 A.C.A. § 14-88-406(c).

8 At the time, A.C.A. § 14-88-406(c) stated, “The attorney shall receive as his compensation such fees as may be agreed upon by the boards. However, in no event shall his total compensation in any one (1) year exceed the sum of one thousand two hundred dollars ($1,200).”

9 See Acts 1995, No. 362, § 1.