A legislative panel Thursday signed off on a request by state Sen. Bill Sample, R-Hot Springs, for the Legislative Audit Division to conduct a special audit of the Arkansas Municipal League after Sample said league Executive Director Don Zimmerman is paid about $500,000 a year.
Zimmerman later said the league's executive committee authorized him to be paid $579,799 this year based on the success of the league's programs last year, but he's likely to accept between $350,000 and $400,000 of the authorized salary like he did last year.
The league's executive committee has authorized compensating Zimmerman at 0.85 percent of the league's reserve account at the end of the past two years, and the league's reserve account totaled $68 million at the end of last year, Zimmerman said.
"I am not doing this for the money. I've had offers to make more money," he said.
Zimmerman, 72, has been the league's executive director since 1974.
The audit approved by the Joint Legislative Auditing Committee's executive committee Thursday will review the league's staff salaries and participation in any public retirement system, what entity holds title to the property used by the league, and the way the league's reserve account funds are collected and spent.
Sample told lawmakers that he's requesting the special audit because his constituents and other legislators are concerned that "we have a quasi-agency that is spending taxpayer dollars and we have no oversight to it whatsoever."
But the league's legislative liaison -- former state Sen. Jack Critcher, D-Batesville -- told the executive committee that cities pay only about $240,000 a year in dues to the league.
Most of the league's revenue is generated from several programs, including a self-insured health-benefit fund, a workers' compensation trust fund, a legal defense fund, a property insurance program and a vehicle insurance program, he said.
The league has kept health insurance premium increases for cities participating in the program to only 1 percent during the past eight years, Critcher said.
"We don't object to an audit," he said.
But he said it might be prudent for state officials to initially review the league's annual private audit conducted by the Thomas & Thomas accounting firm for $94,000 a year and ask questions of Thomas & Thomas' auditors about the league.
At that point, Sample said the league has about $60 million in reserve funds and Zimmerman is paid 0.85 percent of the reserve funds, or about $500,000 a year.
He said none of state government's agency directors are paid that much money.
Sample said he wonders whether Zimmerman's salary complies with the law.
After the Joint Legislative Auditing Committee's executive committee meeting, Zimmerman said in an interview that he's authorized to be paid 0.85 percent of the league's reserve account at the end of the calendar year, but he doesn't accept all of the compensation that he's authorized to receive.
He said he accepted between $350,000 and $400,000 in salary last year and about $260,000 in salary in 2013, and the compensation that he receives is legal under state law.
"These cities somehow think I am valuable," Zimmerman said.
The league's reserve account has increased from about $50 million to more than $60 million partly because of the growth in its investments, Zimmerman said.
Zimmerman said his gross income was about $500,000 last year, including his wife's salary as a Realtor, investment earnings, Social Security benefits and retirement benefits. He is a retired member of the Arkansas Public Employees Retirement System and previously served on the system's board of trustees.
The league is "a $100 million operation" that's saved cities millions of dollars through its health insurance and other programs, he said. The league has a $70 million health insurance program and a $13 million workers' compensation program, he said.
Among other things, the league created an investment program focused on investing in stocks of Arkansas companies, and that's had an average investment return exceeding that of the Standard & Poor's 500 index during the past decade, he said.
"Lobbying the Legislature is a small part of what we do," Zimmerman said.
"If Sen. Sample thinks I'm overpaid, then he should come to [the league's] board and tell them that," he said, adding the league's convention is June 24-26 in Little Rock and Sample could attend and "ask any questions he wants."
Zimmerman said Sample "has a burr under his saddle" partly because former state Rep. Roger Smith, R-Hot Springs, who represents firefighters and police officers as a lobbyist, "has been mad at us for years." Sample isn't a "bad guy," he said.
At times, Smith and Zimmerman have clashed over various retirement bills in the Arkansas Legislature.
But Smith said in an interview that Sample's request for a special audit of the Municipal League "doesn't have anything to do with me," and Sample and Zimmerman had their own dispute in a legislative session a few years ago.
Sample said his request for a special audit of the league has nothing to do with Zimmerman and Smith's past disagreements.
"It is not about Bill Sample and Don Zimmerman. I just want transparency with the way taxpayer dollars are spent," he said.
Metro on 06/05/2015