Does an Arkansas agreement between a county and a city to split a federal Justice Assistance Grant need AG approval under the Interlocal Cooperation Act?

Plain-English summary

Faulkner County and the City of Conway worked out an arrangement around a 2016 Byrne Justice Assistance Grant ("JAG"). The City would accept the grant funds, send half to the County, serve as the applicant fiscal agent, and handle the federal reporting. The County would spend its half on equipment that increased public safety and officer safety. Faulkner County Attorney David Hogue sent the agreement to the AG and asked the AG to approve it under the Interlocal Cooperation Act.

AG Leslie Rutledge declined, on a narrow jurisdictional ground. The Interlocal Cooperation Act, Ark. Code Ann. §§ 25-20-101 to -108, requires the AG to review "agreement[s] for joint or cooperative action" between public agencies. The JAG arrangement was not that. It was a simple pass-through and split: a contract for handing money over, not a "joint endeavor" that would create new structures or shared operations. Because the agreement was not the kind of "joint or cooperative action" the Act covers, the AG had no statutory duty or authority to approve or reject it.

The AG was careful to say that this jurisdictional decline was not a comment on whether the agreement itself was valid, binding, or enforceable. The agreement was a "straightforward contract" of the kind that Ark. Code Ann. § 25-20-108 contemplated could be entered without AG approval.

Currency note

This opinion was issued in 2016. 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

What the Interlocal Cooperation Act actually covers

The Act's stated purpose, in § 25-20-102, was to let local governmental units "make the most efficient use of their powers by enabling them to cooperate with other localities on a basis of mutual advantage." Section 25-20-104(a) gave the legal vehicle: "Any governmental powers, privileges or authority exercised or capable of exercise by a public agency of this state alone may be exercised and enjoyed jointly with any other public agency." The Act then required, in subsections (b), (c), and (f)(1), that any agreement "for joint cooperative action" be in proper form, compatible with state law, and approved by the AG.

The Act envisioned more than two governments shaking hands on a transfer of money. Subsections 25-20-104(b)-(d) called for an actual joint undertaking, with a budget and either a separate legal or administrative entity or a joint board or administrator.

Why the JAG agreement did not fit the Act

The AG keyed on a long-running test: an agreement falls under the Act when it "assigns each party any obligations or functions showing that each is an active participant in activities that each entity might exercise independently." That test came from Op. Att'y Gen. 2006-042, with comparators in 2008-029, 2012-127, 2004-194 (track project), and 2005-173 (justice complex with joint board of county judge and city administrator). Those cases involved cities and counties actually constructing or running something together.

The JAG split did not look like that. The agreement:

• did not establish a separate legal or administrative entity;
• named no joint administrator or board;
• did not contemplate any ongoing endeavor beyond receiving, splitting, spending, and reporting the JAG award;
• gave the County only the obligation to spend its share on appropriate equipment; and
• gave the City only the obligations of accepting funds, paying half over, and handling federal reporting.

That was a fiscal-agent pass-through, not a "joint or cooperative action."

The AG's statutory authority is narrow

The AG's review power under the Act is jurisdictional. If the agreement is not one "for joint or cooperative action," the AG has no power to approve or reject it. The opinion drew this line carefully: it was not saying the agreement was invalid or that the parties had picked the wrong vehicle. It was saying that the AG's signature is not part of the formation requirements for this kind of pass-through. The parties could execute it under their own authorities (Ark. Code Ann. § 25-20-108 expressly contemplated cooperative arrangements outside the Act).

Green v. Mills and statutory context

The AG used Green v. Mills, 339 Ark. 200, 4 S.W.3d 493 (1999) (Arkansas Supreme Court), for the canon that statutes are read in the context of the whole statutory scheme. The phrase "joint or cooperative action" in § 25-20-104(b) had to be read in light of the rest of the Act, which contemplated structures and ongoing endeavors.

Common questions

Q: Does every interlocal agreement need AG approval in Arkansas?
A: No. Only agreements that qualify as "joint or cooperative action" under § 25-20-104(b) require AG review. Pure pass-through contracts, fiscal-agent arrangements, and other "straightforward contracts" between two local governments do not fall under the AG-review requirement.

Q: How can you tell whether an arrangement needs AG review?
A: The AG's working test is whether the parties are taking on a shared endeavor that each could have done alone, and whether the agreement creates a structure (a board, an administrator, a budget, a separate legal entity) to carry it out. If both governments are simply allocating money and reporting, it is probably not a joint endeavor.

Q: Did the AG say the Faulkner County/Conway JAG agreement was valid?
A: No. The AG was explicit that the jurisdictional decline did not address validity, binding effect, or enforceability. Those questions were for the parties and their attorneys.

Q: What if a joint police equipment program had a shared operations committee?
A: That looks much more like the agreements the AG had approved before (for example, the city-county justice complex run by a joint board in Op. Att'y Gen. 2005-173). Those probably do require AG review under the Act.

Citations and references

Statutes:

• Ark. Code Ann. §§ 25-20-101 to -108 (Repl. 2014), Interlocal Cooperation Act
• Ark. Code Ann. § 25-20-102 (Repl. 2014), legislative purpose
• Ark. Code Ann. § 25-20-104(a), joint exercise of governmental powers
• Ark. Code Ann. § 25-20-104(b), agreements for joint cooperative action; AG review
• Ark. Code Ann. § 25-20-104(c), (f)(1), AG approval requirements
• Ark. Code Ann. § 25-20-108, scope clause

Cases:

• Green v. Mills, 339 Ark. 200, 4 S.W.3d 493 (1999) (Ark. Sup. Ct.)

Prior AG opinions referenced:

• Op. Att'y Gen. 2012-127, 2008-029, 2006-042, 2005-173, 2004-194

Source

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

Original opinion text

Opinion No. 2016-077
August 3, 2016

The Honorable David Hogue
Faulkner County Attorney
801 Locust Street
Conway, AR 72034

Dear Mr. Hogue:

You requested on behalf of Faulkner County, Arkansas (the "County"), my approval under the Interlocal Cooperation Act (the "Act") of an agreement between the County and the City of Conway (the "City"). The agreement is made in connection with the City's receipt of an award under the 2016 Byrne Justice Assistance Grant ("JAG") program.

The agreement provides that the City will accept JAG grant funds and share them equally with the County. The City also agrees to serve as the "applicant fiscal agent" and make any required reporting. The County agrees to spend its share on equipment to increase public safety and law enforcement officer safety. The Agreement does not, in my estimation, contain any other significant promise of either party.

RESPONSE

In my opinion, the Agreement is not an "agreement . . . for joint cooperative action" as described in the part of the Act that requires the Attorney General to approve such agreements. I accordingly have no statutory duty or authority to approve or reject the Agreement, and I must respectfully decline your request.

My conclusion that I am not authorized to approve or reject the Agreement should not be taken as a comment on whether the Agreement will be valid, binding, and enforceable.

DISCUSSION

The Act requires me to review each "agreement for joint or cooperative action" to determine whether it is in proper form and otherwise compatible with state law. But the agreement that is the subject of your request is not one "for joint or cooperative action" as that term is used in the statute.

While the statute does not define the phrase "agreement for joint or cooperative action," the meaning of this phrase is clear from the statutory context. The Act is focused on mutual government endeavors or undertakings, whereby two governmental units take on together a project or program that they each had the power to pursue separately. See Ark. Code Ann. § 25-20-104(a) ("Any governmental powers, privileges or authority exercised or capable of exercise by a public agency of this state alone may be exercised and enjoyed jointly with any other public agency.")

The Act is focused on "joint cooperative action" and clearly contemplates a "joint or cooperative undertaking" with a budget and a separate legal or administrative entity, or an administrator or joint board. This office has observed in this regard:

A key factor appears to be whether the agreement assigns each party any obligations or functions showing that each is an active participant in activities that each entity might exercise independently. See Op. Att'y Gen. 2006-042; compare Op. Att'y Gen. 2004-194 (acknowledging the propriety under the Act of an agreement between a city and a county to construct a track to be used by each entity, although rejecting the agreement on other grounds); Op. Att'y Gen. 2005-173 (approving an agreement between a city and a county to cooperate in the construction and operation of a justice complex to serve both entities, with the facility to be administered by a joint board consisting of the county judge and the city administrator).

Even if the meaning of the term "agreement for joint or cooperative action" in the Act were ambiguous (which it is not), the General Assembly's expressed purpose for the Act confirms my understanding of the term. The General Assembly stated in law that the Act's purpose 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 and thereby to provide services and facilities in a manner and pursuant to forms of governmental organization that will accord best with geographic, economic, population, and other factors influencing the needs and development of local communities.

This stated purpose of the General Assembly further confirms that an "agreement for joint or cooperative action" is one in which two or more governmental units agree to jointly undertake some type of project, program, or endeavor and, for that reason, in some fashion combine their obligations or functions to carry out the endeavor.

In light of the above, I do not believe the Agreement establishes a "joint undertaking" of the type the Act contemplates and authorizes. Instead, it simply obligates the City to accept JAG funds, pay half to the County, and assume reporting responsibility; and obligates the County to spend its share appropriately. The Agreement establishes no separate legal or administrative entity, and names no administrator or joint board. It does not envision or provide for any ongoing endeavor, once the JAG funds are received, spent, and reported upon. Accordingly, I perceive no joint or cooperative undertaking as contemplated by the Act. Instead, the Agreement is, in my view, the sort of straightforward contract the parties might enter into without my approval. Because the Agreement is not of the sort that requires my approval under the Act, I have no authority to approve it or reject it.

Sincerely,

LESLIE RUTLEDGE
Attorney General