Issued April 19, 2002

The Ethics Commission has received a written request for an advisory opinion from Mr. Stuart W. Hankins who represents the Maumelle Suburban Improvement District No. 500 (“MSID”). In his advisory opinion request, Mr. Hankins asks whether or not an annual Statement of Financial Interest (“SFI”) is required to be filed by the commissioners of the MSID.

This topic has been discussed by the Ethics Commission previously.
[1]  However, since there are numerous ways to form an improvement district and select commission members[2], whether or not commissioners of the MSID must file a SFI is a factual determination to be decided on a case-by-case basis.

The code sets forth who must file a SFI in Ark. Cod Ann. § 21-8-701(a):

The following persons shall file a written statement of financial interest:
   A public official, as defined in § 21-8-402(16);
   A candidate for elective office;
   A municipal judge or city attorney, whether elected or appointed;
   Any agency head, department director, or division director of state government;
   Any public appointee to any state board or commission who is authorized or charged by law with the exercise of regulatory authority or is authorized to receive or disburse state or federal funds;
   All persons who are elected members of a school board or who are candidates for a position on a school board;
   All public and charter school superintendents;
   Directors of educational cooperatives; and
   Any person appointed to one (1) of the following types of regional, municipal, or county boards or commissions:

(A)     A planning board or commission;
(B)  An airport board or commission;
     A water or sewer board or commission;
     A utility board or commission; or
      A civil service commission.

Advisory Opinion 2000-EC-004 opined that a board member of an improvement district does not fall within the categories listed in subsections (a)(2) through (a)(6).  In 2001, an amendment added subsections (a)(7) and (a)(8) to Ark. Code Ann. § 21-8-701.  It is clear that commissioners of improvement districts do not fit into these new categories either. Therefore, if a commissioner of an improvement district is required to file a SFI it would be by virtue of (a)(1) or (a)(9).

The first application of the facts will be to (a)(1) which provides that a SFI is required to be filed by a “public official.”  The code defines the term “public official” in Ark. Code Ann. § 21-8-402(17).  It is set out to mean:

a legislator or any other person holding an elective office of any governmental body, whether elected or appointed to the office, and shall include such persons during the time period between the date they were elected and the date they took office.

 The term “governmental body” is defined in Ark. Code Ann. § 21-8-402(6) and is set forth below:

any office, department, commission, council, board, committee, legislative body, agency, or other establishment of the executive, judicial, or legislative branch of the state, municipality, county, school district, improvement district, or any political district or subdivision thereof.

The statutes specifically hold than an improvement district is a governmental body.  In order for a person to be required to file a SFI under this subsection, he or she would need to hold an elective office as a commissioner of the improvement district.

Based upon the information submitted by Mr. Hankins, the MSID was formed by petition and ensuing order of the Pulaski County Judge in December of 1975.  This improvement district was organized under Ark. Stat. Ann. § 20-704, which is now codified at Ark. Code Ann. § 14-92-219.  The purposes of the MSID include providing water and sewer services to the district. The manner in which successors are chosen is governed by Ark. Stat. Ann. § 20-703.
[3]   Accordingly, the first commissioners were appointed by the county judge, but subsequent commissioners were “selected” by the remaining commissioners.  Therefore, the commissioners do not meet the definition of a “public official” and would not be required to file a SFI under this provision.

The second category to be reviewed is Ark. Code Ann. § 21-8-701(a)(9).  This subsection requires that any person who is appointed to one of five types of regional, municipal, or county boards or commissions must file a SFI.  Included in those types of boards or commissions are (1) planning boards or commissions; (2) airport boards or commissions; (3) water or sewer boards or commissions; (4) utility boards or commissions; and (5) civil service commissions.

In the information Mr. Hankins provided, he stated that the MSID provides water and sewer services for the district.  Under the application of this statute if the commissioners of the MSID were appointed, they would be required to file a SFI.  The original commissioners of the improvement district were appointed.  However, the current commissioners were not appointed to this improvement district.  They were instead “selected” by the remaining commissioners as per the requirements found in Ark. Stat. Ann. § 20-703.   As such, the commissioners of the MSID are not required to file a SFI.

This advisory opinion is issued by the Commission pursuant to Ark. Code Ann. § 7-6-217(g)(2).

Melissa Dorn Bratton
Staff Attorney

[1]   See, e.g. Advisory Opinion Nos. 92-EC-022, 93-EC-005, 99-EC-101, and 00-EC-004.

[2]   Title 14, Subtitles 5 – 24 of the Ark. Code Ann.

[3]   The “1981 amendments” to suburban improvement districts were not made retroactive to previously formed improvement districts.   See Ark. Code Ann. § 14-92-202(a) and § 14-92-209(c).   As such, Ark. Stat. Ann. § 20-703 is the controlling law of the MSID.