Contracts that Little Rock and North Little Rock have with their respective chambers of commerce violate the Arkansas Constitution, Pulaski County Circuit Judge Mackie Pierce ruled Monday, reaffirming his 5-month-old decision that banned the municipalities from continuing to pay those economic promoters.
Those "illegal contractual arrangements" are barred by Article 12, section 5, of the state constitution, Pierce said, reaching the same conclusion he reached in January. The section bars cities from engaging in giving money to private companies without getting anything in return, including purchasing membership or investing in ownership.
Since Pierce first struck down the contracts, the Arkansas Legislature has proposed a constitutional amendment for voters to consider next year that would eliminate those restrictions. Several other cities have put their contracts on hold or are rethinking their financial agreements with their chambers and similar development groups.
Pierce concluded Monday's 40-minute hearing by siding with plaintiffs' attorneys Jim McMath and Sonia Rios. Pierce gave the lawyers seven days to submit a proposed order that codifies his findings in writing, a requirement for the municipalities to begin their appeals. The judge also said he would consider the plaintiff lawyers' requests for the cities to pay their legal fees and expenses.
Rios told the judge that the cities pay out and receive little or nothing in return. She said a mainstay of their argument has been that the chambers and similar operators provide no unique services for the municipalities and that they would continue their work regardless of whether they get city funding.
"Public money can only be put to public use under public authority," she said.
Community activists Jim Lynch, Tony Orr and Glen Miller sued the cities in 2013, challenging the legitimacy of the payments to the chambers and similar development promoters.
Since their initial victory in January, the plaintiffs have withdrawn accusations that tax dollars have illegally been used to pay the Little Rock Regional Chamber of Commerce, the Metro Little Rock Alliance, the North Little Rock chamber and the North Little Rock Economic Development Corp.
Pierce had agreed to hear arguments from the cities, who had hoped to change his mind about the ruling. But Pierce said he found the reasoning of Little Rock City Attorney Tom Carpenter and John Wilkerson of the Arkansas Municipal League on behalf of North Little Rock to be unconvincing.
Carpenter argued that the judge had ruled with insufficient evidence and asked the judge to hold a trial on the issue.
He compared the cities' contracts with the chambers to the contracts cities would have with any other consultant. There's no law, including the state Freedom of Information Act, that requires the city to account for every dollar spent on that service, he said, suggesting that imposing that kind of requirement would be like micro-managing the purchase of specific office equipment.
Carpenter also questioned an observation that Pierce made in the January hearing that the development groups would continue doing what they've been doing -- trying to attract new business while cultivating growth of existing industry -- regardless of whether they were paid by the cities.
"There was no evidence in the record ... these [development] things would be done anyway," Carpenter told the judge. "They've never shown work is not being done."
Metro on 06/02/2015