LITTLE ROCK — The Little Rock Sanitary Sewer Committee voted Wednesday to investigate $236,000 in longevity awards given to Little Rock Wastewater Utility employees earlier this month by executive staff members.
The committee also voted to defer the approval of any raises or bonuses for utility employees in the coming yearuntil after the investigation - which was given a 30-day time limit - and to put off making any decision on the terms of employment for Reggie Corbitt, the utility’s chief executive officer.
The committee approved the utility’s 2013 budget without a planned 3 percent merit raise for employees.
The investigation was spawned by a last-minute resolution approved at theend of a marathon Little Rock Board of Directors meeting Tuesday. Ward 5 City Director Lance Hines made the motion about 11:30 p.m. to direct the Sanitary Sewer Committee to investigate the longevity bonuses and how they were awarded.
The vote Tuesday to ask for the investigation was 8-0, with two city directors having left before the motion was made.
The committee appointed four people to conduct the investigation - committee Vice Chairman Marilyn Perryman and three utility employees, John Jarratt, liaison to the Board of Directors, and B.J. Harrison and Debbie Williams, who work in the finance department. The three employees report to Corbitt.
Hines said in his motion that the committee should report back to the Board ofDirectors and should take any disciplinary action necessary, including the possibility of firing Corbitt and placing the utility under new leadership. He said he felt the bonuses were “slipped under the nose of the Sanitary Sewer Committee.”
Committee Chairman Ken Griffey said before the meeting Wednesday that the Board of Directors appointsthe committee members and they are responding to the board’s wishes.
“The marching orders we have are clear and that is to do the investigation,” he said. “The facts will become clear and we will answer the board’s questions as well as our own. And we’ll take those facts on their merit and move forward as we see fit.”
Corbitt said Wednesday that Hines’ motion was “inappropriate and not proper protocol,” noting that Hineshad not spoke n to h i m about the longevity awards or the process before asking for an investigation.
“I am offended by the commentsof the board [of directors],” he said. “I have never been called a liar, I have never been called nefarious ... evil, immoral and criminal. And that will be addressed, too. ... I will seek regress in the proper venue.”
The longevity awards were pointed out in an anonymous e-mail sent to several city directors and city staff members, asking them to reconsider an increase in sewer bills the board had approved in June.
Williams, an accounting supervisor with the utility, said last week that the awards were given out to about 190 employees who had stayed with the utility through austerity measures instituted over the past few years. She said employees had not received raises in two or three years, depending on when they were scheduled to have an employment review. She said many had taken on extraduties because the utility had lost 50 employees since 2009 during a hiring freeze.
The awards were given out after the utility’s reserve had reached $3 million and there was enough to operate for 30 days in case of an emergency, Williams said. That goal was reached in November, she said.
The awards were made in the form of checks of $1,250 each and were mailed Dec. 5. Employees were responsible for paying the applicable taxes on the awards.
Williams said the awards were built into the salary schedule included and approved as part of the utility’s revised 2012 budget. The committee approved the budget at its next regular meeting in July after the Board of Directors approved the requested rate increases in June.
Several city directors said they were concerned about the bonuses because of the lean financial condition described by employees.
The utility is a semiautonomous agency governed by the Sanitary Sewer Committee. The city Board of Directors appoints those committee members and has the authority to approve rate increases for the utility, but the committee approves budgets and policy decisions.
Ward 3 City Director Stacy Hurst said she remembered the utility representatives saying the rate increases were at a bare minimum to meet the utility’s legal obligation under a lawsuit settlement with the Sierra Club, an environmental advocacy agency that sued over wastewater overflow problems.
Under the 2001 settlement, the utility must fix all of those overflows by 2018.
The board passed the series of rate increases in June, which resulted in average increases for all customers - including businesses - of 12.75 percent in 2012, 8 percent in 2013, 7 percent in 2014 and 4.75 percent in 2016.
The average residential customer’s rates increased 5 percent in 2012 and will increase 4.5 percent in 2013, 2.5 percent in 2014 and 4.75 percent in 2016.
Corbitt said after the committee’s vote Wednesday that he told the committee about the longevity payments during a June meeting and explained the conditions for awarding them.
He gave Griffey copies of employment policies for Little Rock and North Little Rock, which include longevity pay.
“I feel if I am being recommended for dismissal for doing what the city of Little Rock does as a regular policy, so be it,” he said. “If we had used the calculations by the city’s [policy], we would have paid much more.”
Corbitt noted that many utility employees have worked for the agency for a decade or more and have never received a longevity award.
North Little Rock’s longevity policy kicks in after a full year of employment. Under the policy, an employee receives an annual payment equal to $60 for each year he has worked.
Little Rock’s longevity policy for nonunion, nonuniformed employees awards an annual payment equal to $48 for each year of the first five years of employment. In the sixth year, that annual payment increases to $72 for each year worked.
It would take a North Little Rock employee 21 years of service and a Little Rock employee 18 years to earn a longevity award equal to the checks mailed out to the utility employees.
It was unclear Wednesday whether awarding the longevity pay was a humanresources policy change that would have required separate approval by the committee, but that will likely be included in the investigation.
“I would like to remind everyone that the committee’s motion stated ‘at this time,’” Griffey said. “If we can agree things were done in a proper fashion, then this committee can move forward [with potential raises for employees].”
A subcommittee of the Sanitary Sewer Committee recommended earlier this year that the committee not enter into another employment contract with Corbitt, instead keeping him on as an at-will employee. Part of the committee’s reasoning is that Corbitt has said publicly that he plans to retire in 2014.
Wednesday’s investigation was not Corbitt’s first brush with the Board of Directors.
Corbitt was chastised in 2007 for not following Arkansas procurement laws when the utility bought $140,000 worth of furniture for its newly built headquarters on Clear Water Drive. The staff treated individual furniture pieces as separate purchases, all of which were under $20,000. The law says purchases of $20,000 or more have to be approved by the utility’s governing body and that the total purchases should have been treated as one item that required approval.
Corbitt and other top utility staff members also were chastised in 1995 for taking their spouses with them at public expense on out-oftown business. City travel reimbursement policy does not cover spouses or children.
Front Section, Pages 1 on 12/20/2012