Judges: CHARLES C. FOTI, JR., ATTORNEY GENERAL.
Filed Date: 10/27/2005
Status: Precedential
Modified Date: 7/5/2016
Dear Inspector General Robinson:
You have requested an opinion of this Office regarding our interpretation of several laws and rules that govern the payment of a salary to the President of the Orleans Levee District. Specifically, you ask the following questions:
(1) Must the President of the Board of Levee Commissioners ("the Board") of the Orleans Levee District seek and obtain approval from the Board before he sets his own salary and issues a warrant to take his salary in lieu of per diem or can the President simply set the amount of his salary and issue a warrant for that salary without prior approval from the Board?
(2) Under La. R.S.
38:308 (B), must the Board seek review from the Commissioner of Administration and the Joint Legislative Committee on the Budget ("JLCB") of a salary that it intends to pay?(3) Does the "review" contemplated in La. R.S.
38:308 (B) refer only to notifying the Commissioner of Administration and the JLCB or are those entities given the power to deny or modify the salary request?(4) Can the President's election to receive a salary in lieu of per diem, if valid, be applied retroactively to the first date of his presidency by using a warrant?
Each of these questions is addressed in order below. In addition to your request, you attached, for our review, a letter from the President of the Orleans Levee District in which he elects to draw a salary in lieu of per diem and a copy of the Bylaws of the Board of Levee Commissioners ("the Board") of the Orleans Levee District. In this instance, we also have the benefit of access to documents created by consulting attorneys to the Board. These attorneys have rendered their opinions on the matter of the legality of the salary, both prospectively and retroactively. From the above-referenced materials and from your request letter, we glean the facts surrounding this request that we recount below.
Nine years ago, Governor Murphy J. "Mike" Foster appointed the current President of the Orleans Levee District. At the beginning of his tenure, the President was informed by someone affiliated with the Orleans Levee District ("the District") that he could not draw a salary for his position. The reason given for why he could not draw a salary was that the District already had an executive director performing the District's administrative duties and that, under La. R.S.
On July 8, 2005, the President issued a warrant to the Orleans Levee District Secretary to draw the salary that he was told he could not receive in 1996.1 His warrant requested the maximum salary allowable, retroactively to June 19, 1996, less the amount paid to him in per diem, and prospectively for the remainder of his tenure. Without taking this matter before the Board of the Orleans Levee District and without ever being classified as an administrator of the District under La. R.S.
Can the President Unilaterally Grant Himself a Salary?
As to your first question, regarding whether the President can unilaterally grant himself a salary, it is our opinion that the answer to this is in the negative. As an initial matter, it is axiomatic that the conduct of good government must be accomplished in an open, public, and democratic manner. See, Ryan M. Seidemann, Louisiana's Open Meetings Law: Implications for Policymaking, 82 Louisiana Coastal Law 1 (2003). There is no doubt that the unilateral granting of a salary to oneself by a governmental official without resort to the typical open and democratic process violates this axiom. That being said, there is no question that the President can, as he did in this instance, unilaterally issue a warrant. However, compliance with the statutory scheme and the Board's bylaws and customary practice do not allow such a warrant to lead directly to an unreviewed, unilateral granting of a salary. It is clear from our review of the circumstances and the law, that such compliance is lacking in this situation.
Although neither the statutes related to levee boards, La. R.S.
In addition to the tacit requirement that the Board must vote on the President's salary in the Revised Statutes, there is also tacit evidence to this effect in the Bylaws of the Board of Levee Commissioners of the Orleans Levee District ("the Bylaws"). Under Article III of the Bylaws, there are numerous provisions that provide the Board with control over the finances of the District. Although none of these provisions directly address the compensation of any Board members, the authority of the Board to control the finances of the District can only be logically interpreted to mean that such compensation falls under the power of the Board to approve or disapprove. Thus, it is our opinion that, because the salary increase for the President was not submitted to the Board for a vote, it is an invalid exercise of power under both the Revised Statutes and the Bylaws. In other words, to have been valid, the Board must first have voted on this matter.
The law on the control of the finances by the Board is also upset by the actions of the President unilaterally paying himself a salary. Under La. R.S.
Louisiana Revised Statute
According to the documentation that has been provided to this Office,3 the President is not currently classified as the administrator. However, La. R.S.
A review of the Bylaws also does not lead necessarily to the conclusion that the President is also the Board administrator. Article V of the Bylaws lists the powers and duties of the President, which include several items. Taken together, these items could lead to a conclusion that the President may also function as administrator, but this could perhaps be said of any of the officers of the Board when viewing their duties from a treetop perspective. The most significant duty of the President to this inquiry, of which a similar duty is shared by all officers, is that he has "all other executive powers as may be designated by virtue of the office and as required by the Board." Bylaws at 4. This Office notes that the President, in the warrant submitted as Exhibit 1 to this request, complains of the volume of work that he has performed in his official capacity. We do not dispute this assertion. Indeed, we are sure that performing as the President of the Orleans Levee District, a century-old political subdivision charged with, among other things, managing the New Orleans Lakefront Airport and 129 miles of levees around the City of New Orleans,4 can, at times, be daunting. However, the daunting nature of the job is not at issue here. Because the duties described by the President in the warrant5 and the remainder of the duties in Article V of the Bylaws6 appear to be ministerial in nature, a reasonable conclusion is that the President is not the de facto administrator and that a factual inquiry is required to determine whether or not the President should also be classified as the Board administrator at all. This conclusion is bolstered by the duties of the Executive Director for the Board who appears to serve the functions of the Board administrator. In this respect, the Bylaws state that the duties of the Executive Director include "responsibility . . . to execute the policies and projects of the Board as a prudent administrator." Bylaws, Art. IV at 4 (emphasis added).
Although, at present, this Office is aware of no evidence showing that the President is also the Board administrator, this would not preclude a later factual finding that the President does act as the Board administrator. However, as we have stated in numerous previous opinions, this Office is not a finder of fact and we decline to pass final judgment on the factual determination whether of or not the President's should be classified as the Board administrator. See e.g., La. Atty. Gen. Op. Nos. 05-0083 and 04-0157. Despite any factual finding as to the President's classification as administrator or not, this finding does not, in light of the analysis below, avoid the reality that proper procedure has not been followed with respect to the approval of a salary grant. Thus, even if the President is ultimately determined to have been or to be the Board administrator, proper procedures for approving his salary were not followed. Additionally, under the analysis below, the President is not entitled to a retroactive salary even if it is found that he may receive it prospectively through a classification as the Board administrator.
Must the Board Seek Review of Salaries?
Your second question brings into question the invalidity of the President's unilateral salary increase. In that question, you ask how La. R.S.
What is Meant by "Review" in La. R.S.
As a corollary to the above question, you also ask what the meaning of "review" is as it is used in La. R.S.
Such an interpretation of La. R.S.
The typical mode of statutory analysis is to take the most common-sense and typically-used definition of a word as the meaning that the Legislature intended when it created a law. La. C.C. Art.
Can the President Receive a Retroactive Salary?
As to your fourth question, regarding whether the President can retroactively draw a salary, it is our opinion that the answer to this is in the negative. Though you ask if an election to receive a salary retroactively can be accomplished "simply by issuing a warrant," the warrant has nothing to do with this retroactive issuance of a salary. Admittedly, there have been a few instances in which retroactive salaries were found to be valid for governmental employees in Louisiana. See e.g., La. Atty. Gen. Op. No. 95-341; 95-440; 00-68. However, the factual scenarios in those cases substantially differ from the situation that you pose in your request. Therefore, it is our opinion that this situation does not meet the necessary criteria for such retroactive pay. The brief answer to this question is that retroactive pay is a violation of the prohibition against donations by the State under La. Const. Art.
In spite of the fact the levee board President referred to in this request may have been erroneously advised regarding whether he could receive a salary or a per diem, he took the position. He was not promised a salary pending funding becoming available, nor was any other representation made to him to entice him to take the position that would have created a preexisting obligation on the part of the levee board to retroactively pay the President upon a determination by the Board that he is also the administrator. In the absence of a preexisting obligation to pay a salary increase retroactively, this Office has consistently opined that such an action, even for services rendered in the past, would constitute a donation in violation of La. Const. Art.
Article
VII , Section14 (a) of the Louisiana Constitution of 1974 states the following concerning the donation, loan or pledge of public credit:Except as otherwise provided by this constitution, the funds, credit, property, or things of value of the state or of any political subdivision shall not be loaned, pledged, or donated to or for any person, association, or corporation, public or private. Neither the state nor a political subdivision shall subscribe to or purchase the stock of a corporation or association or for any private enterprise.
This section of the constitution is applicable to situations in which the state or a political subdivision has no obligation to make a payment of public funds. As stated by the Louisiana Supreme Court in City of Port Allen v. Louisiana Municipal Risk Management Agency, Inc., et. al, Article VII Section 14 is violated when the state or a political subdivision seeks to give up something of value when it is under no legal obligation to do so.
439 So. 2d 399 (La. 1983). The Louisiana Civil Code defines an obligation as a legal relationship whereby an obligor is bound to render performance which may consist of giving, doing or not doing something. La. Civil Code Art.1756 . Obligations can arise from contracts and other declarations of will. La. Civil Code Art.1757 .This office has consistently opined that the payment of a bonus, or any other gratuitous, unearned payment to public employees is prohibited, as same would be tantamount to a donation. La. Atty Gen. Op Nos. 79-1352, 80-806, 80-1095, 81-1044, 85-908, 86-88, 86-639, 88-344, 89-190 and 91-383. Within the listed opinions, we have found that retroactive pay increases for services previously rendered is a violation of Article VII Section 14. Any salary adjustment should have prospective application only. See also, McElveen v. Callahan,
309 So. 2d 379 (La.App. 3d Cir. 1975), writ denied,313 So. 2d 602 (La. 1975), wherein the court stated "[p]ayments to be legal must be in the form of salary increases for the future, not extra compensation for past services rendered."
(footnotes omitted). Although the matter at issue in La. Atty. Gen. Op. No. 05-0223 is one of pay increases, it is our opinion that this same principle applies to the granting of a retroactive salary to the President. As was demonstrated above, the Orleans Levee District is not obligated to pay a salary to the President. Thus, under the Revised Statutes, the case law and past opinions of this Office, paying such a retroactive salary would constitute a violation of La. Const. Art.
One argument has been made on this matter stating that the Legislature's enacting La. R.S.
In an effort to fully analyze this issue, we have conducted a comprehensive search of opinions of this Office and the relevant case law. The opinions of this Office, cited in the quote from Opinion 05-0223 above, are consistent in their holding that retroactive salary increases are donations that constitute a violation of La. Const. Art.
A few opinions of this Office do present interesting insights on the distinctions of what constitutes retroactive salaries and what does not. In La. Atty. Op. No. 91-383, this Office opined that, while the granting of retroactive salaries would be considered a gratuity and thus prohibited under the Louisiana Constitution, retroactive compensation for expenses would not be so classified. However, in light of the statement from La. Atty. Gen. Op. No. 95-440, quoted in the previous paragraph, it is our opinion that an argument that the past salary that the President of the Orleans Levee District did not receive could not be classified as compensation for expenses. The compensation for expenses in this situation would, no doubt, be the per diem that he did draw and, making an argument that he is due something more under a compensation for expenses argument, akin to the one thousand dollars per month salary, is sure to be rejected by any court.
Another opinion of particular interest is La. Atty. Gen. Op. No. 95-341, commenting that, in a particular circumstance, under the ruling in an unreported case, back pay could avoid being classed as a donation but rather would be a nonprohibited reimbursement for past due salaries. No explanation of how the difference in terminology between "donation," "back pay," and "reimbursement for past due salaries" is undertaken in that opinion, making a comparison of the circumstances to the matter under consideration difficult. Nevertheless, because this opinion stated that the salaries were "past due," the situation on which that opinion was rendered is distinguishable from the present matter. Due to the lack of an obligation to pay a salary to the President in the present scenario, the salary that he is attempting to claim cannot be said to be "past due" as it was never actually due at all. This is exacerbated by the reality that the President drew a per diem in lieu of a salary, even if that per diem was drawn in light of erroneous advice.
Although not directly addressing the matter at hand, La. Atty. Gen. Op. No. 01-221 is somewhat informative as to whether or not retroactive pay for salary is due if the reason that the salary was not paid in the first place was a mistake of the governmental entity. This opinion, citing La. Atty. Gen. Op. No. 00-188 as further support, states that there is no legal obligation to pay a back salary even when someone was wrongly or erroneously not paid that salary in the first place. Because the numerous other opinions of this office note, based on City of Port Allen v.Louisiana Municipal Risk Management Agency, Inc., et. al, that a legal obligation to pay is required to avoid the constitutional prohibition against donations, we find it necessary to conclude that the alleged error of the levee board in this instance is not sufficient to support a reason to provide retroactive pay to the President, nor does the alleged error create an obligation to do so. Additionally, regardless of any alleged error in this matter, the only obligation that was created was for the payment of per diem and not for a salary, thus even a finding of error should not affect the outcome of this matter. The only obligation, the one for per diem, was performed upon, error or no error — to grant anything more would be a constitutional violation.
In the absence of any real support for granting retroactive pay in the case law, the Revised Statutes, or the opinions of this Office, we examine the question of retroactive pay under conventional obligations law. While Civil Code Article
All of the foregoing considered, it is our opinion that a retroactive salary, including the one for the Orleans Levee District President, falls under the category of prohibited donations in La. Const. Art.
Opinion Summary
To summarize this lengthy opinion, we offer the following recapitulations of our conclusions:
(1) Although the President of the Board of Levee Commissioners of the Orleans Levee District can issue a warrant for his salary, he must seek and obtain approval from the Board before he sets his own salary and takes the salary in lieu of per diem. This action cannot be accomplished unilaterally.
(2) The Board must seek review from the Commissioner of Administration and the Joint Legislative Committee on the Budget, pursuant to La. R.S.
38:308 (B), before actually paying a salary.(3) The "review" contemplated by La. R.S.
38:308 (B) is something more than merely notifying the Commissioner of Administration and the Joint Legislative Committee on the Budget. Rather, this review contemplates some measure of comment and approval by these bodies.(4) The President cannot receive a salary retroactively absent a preexisting obligation to grant said salary.
We hope this sufficiently answers your inquiry, however if we may be of further assistance please do not hesitate to contact our office.
Sincerely yours,
CHARLES C. FOTI, JR.ATTORNEY GENERAL
By: ___________________RYAN M. SEIDEMANNAssistant Attorney General