June 12, 2002
Re: Property rights of members of utility boards
Dear City Administrator:
You asked whether members of the Water and Sewer Board and the Gas Board have a property
interest in their offices such that they would have to be compensated if those boards were
abolished. In my previous letter to you about the abolition of these boards, I noted that these
board members probably did have a property right to their positions and would probably have to
be compensated even though they did not serve the full term. My further research indicates,
however, that they would not have a property interest in the continued existence of the office.
They would have a property interest in the holding of the office for the remainder of the term as
long as the office itself existed, but they have no protectible interest in the law remaining the
same and the office itself continuing to exist.
The U.S. Constitution protects the property rights and interests that local officials and employees
have in their positions, but it does not create those rights or interests. Property interests are
created by sources independent of the Constitution such as state and local law. Board of
Regents v. Roth, 408 U.S. 564 (1972). Therefore, we must determine whether these board
members have a property right to the continued existence of their positions under applicable
state and local law.
It seems clear that the members of these boards, because they have a set term of office, have a
property interest in continuing to hold the office for the term, as long as the office itself exists. It
has been held in Tennessee that “The right to hold office is a ‘species of property.’” Rhea
County v. White 43 S.W.2d 375 at 377 (Tenn. 1931). Section 2-303(3) of the Municipal Code
provides for a four-year term of office for appointed members of the Water and Sewer Board
except for the member who is an alderman. Section 2-601(7) provides the same terms for
members of the Gas Board. These provisions create an entitlement on the part of the members
to hold the positions for the term if the office is still in existence.
The real question we must answer, however, is whether these board members have a property
interest in the continued existence of these boards such that they would need to be
compensated if the boards are abolished. Generally, there is no property right to the continued
existence of a statute or statutory scheme. Dibrell v. Morris’ Heirs, 15 S.W. 87 (Tenn. 1891). If
there were, federal, state, and local governments would probably have to compensate someone
every time a statute or ordinance was amended. It is at least implicitly clear under Tennessee
law that there is no property right on a utility board member’s part in the continued existence of
the utility board. See Tennessee Electric Power Co. v. Mayor of Fayetteville, 114 S.W.2d 811
(Tenn. 1938); State ex rel. Barr v. Town of Selmer, 417 S.W.2d 532 (Tenn. 1967); and State ex
rel. Patton v. Mayor and Aldermen, City of Lexington, 626 S.W.2d 3 (Tenn. 1981). More specific
to your situation, McQuillin makes the following statement of the law:
When offices and public positions are duly abolished the salary or compensation incident
to them also ceases to exist. *** When this occurs the officer cannot receive a salary for
the unexpired term, in the absence of legal provisions to that effect. McQuillin Mun Corp
' 12.183 (3rd Ed).
The case of Halsey v. Gaines, 70 Tenn. 316 (1879), supports this general statement of law
relative to judges of the state’s courts. In this case, a judge’s court was abolished by the General
Assembly. Judges of the state’s inferior and higher courts have a term of eight (8) years that is
constitutionally mandated, and their salary may not be altered during the term.. The judge in this
case claimed compensation for the entire term that would have ended in 1878, even though the
court was abolished in 1875. The Supreme Court held that the judge was not entitled to
compensation for the entire term since he ceased to be a judge. The Court held:
To dispense with an unnecessary court is not to change his term of judgeship, or is it to
affect the guarantees of the constitution as to his salary, nor does it remove the judge
from office. The office no longer exists, and of course a removal from an office that has
no existence is not a conceivable proposition.70 Tenn. at 326.
This principle is followed in The Judges’ Cases (McCulley v. State), 53 S.W. 134 (Tenn. 1899)
and later cases dealing with the judiciary. Van Dyke v. Thompson, 189 S.W. 62 (Tenn. 1916), a
case decided long before the state constitution was amended to prohibit ripper bills, makes a
similar holding relative to municipal officials. In Van Dyke, the General Assembly passed a
private act that abolished some offices in the City of Chattanooga. The office holders sued,
seeking an injunction and claiming that the private act would prevent them from enjoying the
emoluments of office. Held the court:
The only question complainants are entitled to raise is whether or not the act deprives
them ... of a property right in an office, and the answer to this question is that, in the
exercise of the state’s sovereign power over municipalities, its legislative department had
the right to destroy and abolish the offices which complainants held, and this, if done by
an act in all other respects constitutional, put an end to the rights and privileges of
complainants in the respective offices theretofore held by them, except, of course, their
rights to receive compensation for services rendered by them up to the time of the
abolition of their respective offices.... 189 S.W. at 65.
The cases of State v. Morris, 189 S.W. 67 (Tenn. 1916); Goetz v. Smith, 278 S.W. 417 (Tenn.
1925); and Clay v. Buchanan, 36 S.W.2d 91 (Tenn. 1931) all support the proposition that local
offices generally may be abolished by the General Assembly without recourse by the office
holders if they are not protected from abolition by the constitution. Of course, these cases would
be decided differently today because the state constitution has been amended to protect local
officials from private acts of the General Assembly. Article XI, ' 9 has provided since 1953 that:
The General Assembly shall have no power to pass a special, local or private act having
the effect of removing the incumbent from any municipal or county office or abridging the
term or altering the salary prior to the end of the term for which such public officer was
selected....
In my opinion the principle established in these cases still stands in situations in which the local
office holder is not protected under this constitutional provision or the office is not a
constitutional office such as sheriff or one of the other county offices required by the constitution.
Since it will take only an ordinance to abolish these boards and not an Act of the General
Assembly, the protections of Article XI, ' 9 do not apply. These boards were created by
ordinance, and the power of a municipality to repeal an ordinance generally is as broad as its
power to enact it. State ex rel. Patton v. Mayor and Board of Aldermen, City of Lexington, supra,
at 4.
It is my opinion based upon these authorities that the members of the Water and Sewer Board
and the Gas Board do not have any property right or interest in the continued existence of these
boards that would require their compensation for any remainder of their respective terms if the
boards are abolished.
I hope this is helpful. If you have further questions, please contact us.
Sincerely,
Dennis Huffer
Legal Consultant