Original Author: Hemsley, Sid
Date of Material: 10/18/2005
Personnel--Compensation--Laws and regulations
Reviewed Date: 06/25/2021
MTAS was asked whether the city recorder is entitled under Tennessee Law to compensation based on the collection of property taxes.
FROM: Sid Hemsley, Senior Law Consultant
DATE: October 18, 2005
RE: Compensation of the City Recorder
Article 5, '4 of the City Charter provides:
That as compensation for his services in collecting and distributing taxes the Recorder shall receive the same commission as is allowed by law to the County Trustee and for the copy work by him from the County Property Assessor' s book of property in corporate limits of the town, and for his other services, the Recorder shall receive such compensation as the Board of Mayor and Aldermen shall prescribe.
Is that compensation provision legal under Tennessee law?
To my surprise, I can find no provision of the Tennessee Constitution, statute or case under which Article 5, '4, is illegal. In fact, under Article 2, '1 of the City Charter, the recorder is elected for a four-year term, and several provisions of that charter prescribe certain duties for the office of city recorder. For those reasons, the city recorder is undoubtedly a city officer rather than an employee. [See Gamblin v. Town of Bruceton , 803 S.W.2d 690 (1990).] The significance of being an officer rather than an employee is that the " salaries" of officers are generally protected under Article XI, '9 against private acts that have the effect of altering their salaries.
The county trustee is entitled under Tennessee Code Annotated, '8-11-110 to a commission of 6% on all sums up to $10,000, 4% on all sums above $10,000 up to $20,000, and 2% on all sums above $20,000. I have not checked to determine what commissions are allowed on" copy work" from the county property assessor's book of property.
The city recorder has the statutory duty under Article 6 of the City Charter to collect property taxes.
The Anti-Fee Statute
Tennessee Code Annotated, '8-22-101 deprives a wide range of court and county officials of their:
fees, commissions, emoluments and perquisites that shall accrue, or be received by virtue of their respective offices, except payment for special services as trustee or receiver and payment for special services as special commissioner; and they shall be compensated for their services by salaries in the manner provided in chapter 24 of this title, which salaries shall be in lieu of all other compensation.
However, this statute does not apply to municipal officers. In addition, Article 5, '4 of the City Charter does not appear to make the recorder' s office a fee-based office; it simply makes one form of that office' s compensation the same as the county trustee' s commission on the collection of property taxes.
Common Law Limitation on Salaries
In State ex rel. Windham v. LaFever , 486 S.W.3d 740 (Tenn. 1972), a private act gave the sheriff extra duties for which it also provided the sheriff compensation in addition to the compensation he received as sheriff. The private act was challenged on the ground that the private act violated a general law providing for the compensation of sheriffs. But the Court rejected that challenge, reasoning that:
The duty imposed by the private act on the sheriff of DeKalb County, not being one required of sheriff' s generally under statutes or by the common law, is not a " ex officio" duty; consequently, the fixing of compensation for the performance of the duty by the legislature is not in contravention of the general law giving the authority of the county court to compensate a sheriff for the performance of ex officio services, and is constitutional. [At 744]
As far as I can determine, while some city charters in Tennessee give the city recorder the duty to collect property taxes, the common law did not prescribe, and no general statute does prescribe, such a duty for city recorders. For that reason, a charter provision that provides for the city recorder separate compensation for the collection of property taxes, while unique, is not a violation of the common law or a general statute.
Salary Alterations Under Article XI, '9 of the Tennessee Constitution
Article XI, '9, of the Tennessee Constitution prohibits the passage of private acts that have the effect of altering the salary of a local government official during the term for which the official was elected. Article XI, '9, raises this question: Is the " compensation" of which Article 5, '4, of the City Charter qualify as " salary" ?
Public legislative bodies in Tennessee, including municipal governing bodies, have broad authority to modify the salaries and other forms of compensation of elected officers to the extent not limited by the Tennessee Constitution. In Peay v. Nolan , 157 Tenn. 222, 7 S.W.2d 815 (1928), the Tennessee Supreme Court held that the General Assembly could authorize the payment of expenses of its members without violating Article II, '23, of the Tennessee Constitution, which prescribes the compensation of members of the General Assembly. The court reasoned that the constitutional limitation in Article II, '23, was a " salary" and not a " compensation" limitation.
Blackwell v. Quarterly County Court , 622 S.W.2d 535 (1981), contains even more sweeping language along that line. In upholding the right of a county to modify a pension plan, the Tennessee Supreme Court in effect declared that within constitutional limitations, governments at both the state and local levels have broad authority relative to salary and compensation adjustments of their elected as well as appointed officials.
State v. Duncan, 1 Tenn. Ch. App. 334 (1901) defines salary as annual compensation to men in official and some other situations, even if paid in installments. West v. Jefferson Woolen Mills, 147 Tenn. 100 (1922) declared that " ' salary' has reference to the compensation of clerks, bookkeepers, other employees of like class, officers of corporations and public officers." In Peay v. Nolan , above, one of the questions was whether the per diem allowed legislators under Article II '23, of the Tennessee Constitution was salary or compensation. Article II, '23, provided that:
The sum of four dollars per day and four dollars for every twenty-five miles traveled to and from the seat of government shall be allowed to the members of each General Assembly....But no member shall be paid for more than seventy-five days of a regular session, or for more than twenty days of any extra or called session, or for any day when absent from his seat in the Legislature, unless physically unable to attend. The Senators, when sitting as a court of impeachment, shall each receive four dollars per day of actual attendance. [At 817]
The Court declared that:
The term "per diem" as used in article 2, '23 is synonymous with " salary." The term salary imports the idea of compensation for personal service, and not the repayment of money expended in the discharge of the duties of the office . Troop, Public Officers, 441. Compensation attached to the office, whether " salary" or " per diem" (22 R.C.L., p 526, note 4) is not given to the incumbent because of any supposed legal duty resting upon the public to pay for the services. (Moore v. Stickling, 46 W.Va. 515, 33 S.E. 274, 50 L.R.A. 280), and a law creating an office without any provision for compensation carries with it the implication that the services are to be rendered gratuitously. 22 R.C.L. p. 532. [At 917] [Emphasis is mine.] The object in allowing compensation for official service is to enable public officials to give due attention to their official duties. State ex rel. v. Nashville, 15 Leas, 705, 54 Am.Rep. 427.
These principles touching the duty of the citizen in serving the state are derived from the common law and were understood when the Constitution of 1870 was promulgated, and when the provision therein was made to compensate members of the General Assembly, and the allowance for compensation was intended to cover the personal expenses of members, that is expenses incident to their personal comfort, convenience, and taste, and so as to be distinguished from official expenses arising from the performance of official duty. [Citations omitted.] [At 817]
Peay v. Nolan appears to speak of the terms" compensation" and " salary" as the same thing. Citing 29 Cyl. 1427-1429, it says that:
Where the compensation is fixed by the Constitution, or where there is a constitutional provision prohibiting such change during the term of an incumbent, no change of salary during such a term is permissible * * * Such limitations do not effect provisions for expenses, except that the use may not be made of a power to increase an allowance for expenses so as to increase compensation received by an officer. [At 817]
When Article V, '4 of the City Charter speaks of the recorder' s " compensation," it speaks of two kinds, in both cases in terms of "salary" rather than in terms of the expenses of that office:
- A " commission" for " services" in the collection and distribution of taxes and for copy work. The commission is not fixed in terms of dollars as was the per diem in Peay v. Nolan . But it is fixed in terms of being pegged to the commission received by the county trustee for like duties. In addition, even the legislators in Peay had control over the actual dollar amount of per diem they received by attending or not attending sessions of the General Assembly;
- for " other services," for which the recorder receives such " compensation" as the board of commissioners fixes. This form of the recorder' s compensation is obviously dependent upon what the city' s governing body fixes.
But both forms of compensation appear to be the same as " salary" even though the first form does not generally appear in city charters or ordinances in Tennessee. The outcome of that conclusion is that the city recorder' s compensation falls within Article XI, '9, of the Tennessee Constitution and cannot be altered during the recorder' s term of office.
Because under Article XI, ' 9, of the Tennessee Constitution, the General Assembly cannot pass a private act having the effect of altering the salary of the mayor and aldermen, this question arises: Can the General Assembly pass a private act under which the city can alter the salary of the city recorder during his or her term of office? The Tennessee courts have never directly answered that question, but I am convinced that the answer is no. The reason is that Article XI, '9 actually prohibits private acts that have the effect of doing two things with respect to local government officers: (1) shortening the terms of such officers; (2) altering the salaries of such officers. An argument can be made that if the General Assembly passes a private act under which the city could alter the salaries of city officers, it is a private act that does not involve the General Assembly in the altering of those salaries. That logic seems faulty to me for two reasons:
First, no matter how such an act is sliced it is the private act that ultimately has the effect of altering the salary, whether the alteration is done by the act itself, or the act delegates to the city the right to alter the salary.
Second, if the argument is accepted that a private act can be passed by the General Assembly that delegates to the city the authority to alter the salary of city officers during their terms without running afoul of Article XI, '9, of the Tennessee Constitution, the same argument must be accepted with respect to a private act passed by the General Assembly that delegates to the city the right to shorten the terms of city officers. It cannot be the law that under Article XI, '9 a private act passed by the General Assembly can authorize a city to shorten the term of a city officer.
Contracting with County Trustee for the Collection of Property Taxes
Read together, Tennessee Code Annotated, ''67-1-701-702, 67-5-1801, and 67-5- 2005, permit a municipality to collect its own property taxes (if authorized by the city charter), or to turn over the collection of its property taxes to the county trustee. If the City decided to turn over the collection of its property taxes to the county trustee, that change in collection methods would be accomplished under the general law of the state rather than by private act. The consequence with respect to the recorder is that her salary for performing that duty would not be protected under Article XI, '9.
Tennessee Code Annotated, '8-11-110(h) authorizes the city and the county trustee to enter into an intergovernmental agreement for the collection of the city' s property taxes at fees lower (or higher) than the trustee is authorized to charge under Tennessee Code Annotated, '8-11-110(a). Obviously, I do not know if such fees could be negotiated that would be lower than the commission the city is required to pay the recorder for the duty of collecting property taxes, or even if the city is interested in such a change in property tax collection methods.