CONWAY -- Attorneys for a Conway police officer and a firefighter asked a judge Thursday to certify as a class action a lawsuit they filed against the city in 2012, contending that the city spent money intended for employee pay raises for parks instead.
Richard Shumate Jr., a police officer, and Damon Reed, a firefighter, filed the lawsuit in Faulkner County Circuit Court in September 2012. Until Thursday, the last filing by either side in the case was in October 2012.
The original filing describes the lawsuit as an illegal-exaction complaint on behalf of Conway taxpayers and "a Class Action complaint alleging breach of contract for hundreds of general and street fund employees."
Attorneys for Shumate and Reed argue that the city unlawfully used money from a 0.25 percent sales tax approved in 2001 for purposes other than the reason they say it was intended -- to improve employees' salaries.
One of those attorneys, Tom Thrash, said in an interview Thursday that the workers got step raises for a time but didn't get them in 2010, 2011 and 2012. Since then, they have received salary raises, though not in step form, and that may reduce potential damages, he said.
"It is apparent that the proceeds of the assessment have been shifted to a use not authorized by Conway citizens when they voted in favor of the tax," the plaintiffs contend.
In an email, Thrash said, "The Mayor used the 1/4 cent sales tax -- designated for policemen and firemen -- to build the city parks and pay for additional employees needed to maintain the parks."
Mayor Tab Townsell on Thursday called the lawsuit's allegations "absolutely baseless."
Further, Townsell said, "There was no acknowledgement we would give annual raises." The employees have gotten far more in salary increases since 2001 than the quarter-percent tax brings in each year, he added.
The mayor said money for park operations and buildings was "not coming from this quarter-cent sales tax."
"We did increase the parks budget in the intervening years since the passage of that tax ... but we increased every budget," with more for the police and fire departments, he added.
In early 2010, Conway's chief financial officer resigned after disclosures that the city's financial reserves were millions of dollars less than city leaders had thought.
An accounting firm determined later that the problem resulted from miscommunication, not dishonesty. Still, the problem led to temporary operational cutbacks in city government.
That problem, worsened by flat sales-tax revenue in some years, prevented the city from giving raises for a while, Townsell said.
"We didn't want to make the problem worse by giving raises we had to perpetuate every year" while also trying to build reserves. "We wanted to preserve jobs" rather than lay off employees.
The case is before Circuit Judge Michael Murphy, who was Conway's city attorney until last year.
State Desk on 04/10/2015