Can an incorporated nonprofit volunteer fire department contract with an Arkansas city or county to provide fire protection, and how did Act 106 of 2015 change that?

Plain-English summary

Senator Terry Rice asked on behalf of the Midland Volunteer Fire Department, an incorporated nonprofit "separate and apart from the City of Midland." The department wanted to know which legal arrangements it could use to provide fire protection to the city and to Sebastian County, and how Act 106 of 2015 would change those arrangements when it took effect on July 22, 2015.

The AG declined to identify a "preferred" contracting method, calling that question too fact-specific to address in a formal opinion. The AG also declined to opine on the effect of an interlocal agreement on a nonprofit fire department, treating that as a question better suited for the department's own counsel.

On whether contracting was legally possible, the AG gave a layered answer.

For counties, the answer was generally yes. Counties have specific authority to provide fire prevention and protection services under Ark. Code Ann. § 14-14-802(b)(2)(D)(iii). A county can contract with a nonprofit corporation as long as the contract has adequate consideration and serves a proper public purpose, both of which were satisfied by fire protection. The AG noted, however, that an agreement between a county and a private nonprofit volunteer fire department would not qualify as a "county interlocal agreement" under § 14-14-910 or under the Interlocal Cooperation Act in § 25-20-101 et seq., because those statutes contemplate cooperation between public entities, and a private nonprofit fire department was not a public entity for these purposes. So "contract" yes; "interlocal agreement" no, under pre-2015 law.

For cities, the answer was "perhaps yes" under pre-2015 law. Ark. Code Ann. § 14-53-101(a) said "[t]he city council shall establish fire departments," which could be read to require a city to fulfill its fire-protection obligation through a city-established department. The AG cited earlier opinions (97-234 and 2014-009) that had taken different views on whether cities could outsource fire protection. The AG did not resolve the conflict among earlier opinions.

Act 106 of 2015 cut through the doubt for cities. Effective July 22, 2015, Act 106 amended § 14-53-101 to add subsection authorizing the city council, by ordinance, to enter into a contract or interlocal agreement for city fire protection with an existing fire department certified by the Arkansas Fire Protection Services Board, "[i]n lieu of establishing its own fire department." Certification was available under § 20-22-806 (the Director of the Office of Fire Protection Services administered the program). The certification covered membership fee-based private fire departments and the full range of volunteer fire departments.

The result, as of the opinion's date and looking forward to July 22, 2015: counties had always been able to contract with nonprofits; cities gained clear statutory authority to do the same with certified fire departments. The AG suggested that any city or fire department entering such a contract consult local counsel.

Currency note

This opinion was issued in 2015. 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.

Background and statutory framework

The municipal fire protection regime in Arkansas had three relevant moving pieces in mid-2015.

First, the long-standing duty in Ark. Code Ann. § 14-53-101(a): "The city council shall establish fire departments." The mandatory verb "shall establish" had created the open question whether a city could discharge its fire-protection obligation by contract rather than by establishing its own department. The AG's office had given divergent answers in earlier opinions.

Second, the long-standing county authority in Ark. Code Ann. § 14-14-802(b)(2)(D)(iii) to make provision for fire prevention and protection services, which the AG read alongside the general rule that counties may contract with nonprofits for adequate consideration in pursuit of a proper public purpose.

Third, the Interlocal Cooperation Act in § 25-20-101 et seq. and the related county interlocal provisions in § 14-14-910. Both contemplated joint exercise of governmental powers between public agencies. The AG read the "governmental powers" requirement of § 25-20-104(a) as excluding private nonprofit volunteer fire departments. So an arrangement labeled "interlocal agreement" with a nonprofit was, in the AG's view, not really an interlocal agreement at all under pre-2015 law.

Act 106 of 2015 added the express authorization. The new subsection of § 14-53-101 read, in relevant part:

In lieu of establishing its own fire department under this section, the city council by ordinance may enter into a contract or interlocal agreement for city fire protection with an existing fire department certified by the Arkansas Fire Protection Services Board.

Certification flowed through the Office of Fire Protection Services under the Arkansas Fire Protection Services Board. Section 20-22-802(4) defined "fire department" to include both fee-based private fire departments and the full range of volunteer fire departments. So once Act 106 took effect, a properly certified nonprofit volunteer fire department was an eligible counterparty for either a contract or an interlocal agreement with a city.

The AG also flagged the limit on AG opinions: Ark. Code Ann. § 25-16-701 prohibits the AG from giving private legal advice. The questions Senator Rice raised about which method to use and the effect on the nonprofit's structure pushed too close to private advice for the AG to answer.

Act 106 had no emergency clause and no specified effective date, so it took effect 91 days after sine die adjournment of the General Assembly, which was July 22, 2015 (referenced in Opinion 2015-044).

Common questions

Could a county contract with a nonprofit volunteer fire department for fire protection?
Yes, in the AG's reading. Counties have specific statutory authority to provide fire prevention and protection services, and they can satisfy that authority by contracting with a nonprofit as long as the contract has adequate consideration and serves a public purpose.

Could a city contract with a nonprofit volunteer fire department?
Under pre-Act 106 law, the AG said "perhaps yes" but noted the conflicting language in § 14-53-101(a) requiring city councils to "establish" fire departments. Once Act 106 took effect on July 22, 2015, the answer became a clear yes, provided the fire department was certified by the Arkansas Fire Protection Services Board.

What did Act 106 of 2015 actually change?
It added an express statutory authorization for cities to enter a contract or interlocal agreement for fire protection with a certified fire department, in lieu of establishing their own department.

Was a contract between a county and a private nonprofit fire department an "interlocal agreement"?
No. The AG read the Interlocal Cooperation Act to require joint exercise of "governmental powers" between public agencies, which excluded private nonprofit fire departments. The arrangement was a contract, not an interlocal agreement, even though parties sometimes used the labels interchangeably.

Did certification matter?
Yes, under Act 106. The new express authorization for city contracts applied only to fire departments certified by the Arkansas Fire Protection Services Board. Certification was administered by the Office of Fire Protection Services under § 20-22-806.

Source

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

Original opinion text

Opinion No. 2015-047
June 17, 2015

The Honorable Terry Rice
State Senator
Post Office Box 2195
Waldron, Arkansas 72958

Dear Senator Rice:

STATE OF ARKANSAS
THE ATTORNEY GENERAL
LESLIE RUTLEDGE

This is in response to your request for my opinion concerning the Midland Volunteer Fire Department, which you identify as "a non-profit [that] is separate and apart from the City of Midland." By way of background, you report that "[t]he department is concerned about and needs clarification on the available contracting methods regarding coverage area and funding between a non-profit volunteer fire department and municipalities and/or counties." You further report that "[i]t is their understanding Act 106 of 2015 may have an effect on this matter once it becomes law." You then ask:

1. Can an incorporated nonprofit [volunteer] fire department enter into a contract, agreement or interlocal agreement with a municipality or county and is one of these methods preferred over the other?
2. Can you explain how an interlocal agreement would affect a non-profit volunteer fire department?

RESPONSE

I must respectfully decline to state an opinion as to the preferred method for a nonprofit volunteer fire department to contract with a city or a county. Nor can I address your second question regarding the effect of an interlocal agreement. These questions cannot be satisfactorily addressed without considering their particular context. Additionally, depending upon the questions' context or purpose, providing an answer may be tantamount to giving private legal advice, which I am specifically prohibited from doing.

In response to the question whether a nonprofit volunteer fire department can enter into a contract, agreement or interlocal agreement with a municipality or county for fire protection services, it is my opinion that the answer under current law is generally "yes" as to a contract with a county, and "perhaps yes" as to a contract with a municipality. I cannot definitively opine regarding an "agreement" or "interlocal agreement," without knowing precisely what sort of arrangement is contemplated by the use of these terms.

In my opinion, generally, a county may contract with a nonprofit corporation so long as the contract is supported by adequate consideration and serves a proper public purpose. And providing necessary fire protection clearly constitutes a proper governmental end. With regard to a city contracting for the provision of fire protection services, a statute currently declares that "[t]he city council shall establish fire departments ...." This might suggest that a city cannot currently fulfill its obligation to provide fire protection services for its inhabitants by contracting with a nonprofit volunteer fire department. But beginning July 22, 2015, the new law you have noted, Act 106 of 2015, will amend Ark. Code Ann. § 14-53-101 to add the following subsection specifically authorizing contracts or interlocal agreements between cities and certified fire departments:

In lieu of establishing its own fire department under this section [Ark. Code Ann. § 14-53-101], the city council by ordinance may enter into a contract or interlocal agreement for city fire protection with an existing fire department certified by the Arkansas Fire Protection Services Board.

Fire departments may apply for annual certification by the Director of the Office of Fire Protection Services pursuant to Ark. Code Ann. § 20-22-806 (Repl. 2014). Included within the category of "fire department" subject to certification are "membership fee-based private fire departments" and the entire range of "volunteer fire departments." Thus, beginning July 22, 2015, there will be specific statutory authority for a city to "enter into a contract or interlocal agreement" with an existing nonprofit volunteer fire department that is certified through the Office of Fire Protection Services.

I will note, however, that an agreement between a county and a private, nonprofit volunteer fire department would not appear to be a "county interlocal agreement" under Ark. Code. Ann. § 14-14-910 (Repl. 2013), which authorizes such agreements between counties and other public agencies or political subdivisions to perform any service or undertaking which any contracting party is authorized by law to perform. Id. at (a). Similarly, the Interlocal Cooperation Act, Ark. Code Ann. § 25-20-101 et seq., authorizes the joint or cooperative exercise of power or authority by agencies having "governmental powers," id. at § 25-20-104(a), a category of agency that would appear to exclude a private, nonprofit fire department.

I suggest that any city or fire department seeking to enter into any contract or agreement in this regard consult local counsel for further information and guidance.

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

Sincerely,

LESLIE RUTLEDGE
Attorney General
LR/EAW:cyh