A legislative panel on Tuesday signed off on Gov. Asa Hutchinson's request to grant pay raises of almost 1.5% to the secretaries of three departments starting July 1.
In a voice vote with a few dissenters, the Legislative Council's personnel subcommittee recommended that the council, at its meeting Friday, approve increasing the salary of:
• Cindy Gillespie at the Department of Human Services from $283,000 to $287,042 a year.
• Johnny Key at the Department of Education from $236,000 to $239,361 a year.
• Nathaniel Smith of the Department of Health from $222,000 to $225,306 a year.
The subcommittee's action came after a 35-minute discussion about the Republican governor's reorganization of state government. The panel rejected a motion by Sen. Joyce Elliott, D-Little Rock, aimed at getting lawmakers more information before the council votes on the proposed raises Friday. Kay Barnhill, the state's personnel administrator, said she will provide a report to lawmakers comparing each of the Cabinet secretaries' salaries with those in other states.
On another matter, the subcommittee learned in a report from the Office of Personnel Management that the pay of Cindy Moran, assistant director of the state Crime Laboratory, rose May 5 from $82,144 to $90,358 a year. The report required no action by the panel. Hutchinson last week directed the Crime Lab to rebid two contracts involving a Little Rock firm co-owned by Moran.
Gillespie, Key and Smith will become department secretaries under Hutchinson's government reorganization, in which the number of agencies reporting to the chief executive will be reduced from 42 to 15. The Legislative Council's approval is required under state law because their pay will be above the salary range of $167,096 to $201,700 a year for other Cabinet secretaries.
In response to questions by Sen. Kim Hammer, R-Benton, Barnhill said Hutchinson capped the secretaries' salaries at a 2% increase on merit, "whereas other employees might be eligible for more than a 2% increase," and he limited to 1.5% the raises for secretaries who make more than $200,000 a year.
There are some Cabinet secretaries who are receiving larger raises, but they are taking on new responsibilities, Barnhill said. The governor wanted each secretary to be paid more than the highest-paid employee reporting to the secretary, she said.
Jami Cook, now the director of the Commission on Law Enforcement Standards and Training, will receive the largest raise, $56,916, when her salary increases from $99,000 to $155,916 a year as secretary of the Department of Public Safety. Cook also will continue in her current post, according to the governor's office. The Arkansas State Police will be part of the Department of Public Safety, and the state police director, Col. Bill Bryant, makes $152,859 a year.
Amy Fecher, executive vice president of operations at the Arkansas Economic Development Commission and the governor's chief transformation officer, will get the second-largest raise at $29,916, raising her pay to $155,916 a year. She will become the secretary of the new Department of Transformation and Shared Services, according to the governor's office. The Department of Information Systems will be part of that new department, and Information Systems Director Yessica Jones makes $152,859 a year.
Elliott asked what Cabinet-level secretaries would be doing in their new jobs.
Fecher said Act 910 of 2019 -- the law authorizing the reorganization -- requires that the transformation team report to the Legislature by July 31 "on what we have been doing ... as well as what we'll be doing in the first year."
"We should have it in early July," she said.
Fecher said the Cabinet secretaries will hold administrative positions with other responsibilities at the agencies that they came from, "but they'll also be looking administratively at where we can find efficiencies and savings." Many of the efficiencies will "come from the shared-services model" under which, for example, finance departments in different agencies could be merged and save money over time, she said.
"No one will lose a job from combining those services," Fecher said. "But as we have attrition, then we feel like we will have savings."
Hammer questioned whether state officials discussed interviewing candidates outside state government to see whether there are better candidates for Cabinet secretaries.
"I know the governor did some interviewing and there were a couple of outside candidates," Fecher said.
"I believe his decision on this first round is that you can have more savings if you are not creating an additional position and salary within those departments, so if we have an internal candidate in this first round, it doesn't mean that later on, as we have found some savings, that may not be re-evaluated," she said.
Hammer said that "we are giving salary increases to individuals that have been [in charge] all along, and some have been on the list for a while, in my opinion, to find savings in state government, and now we are giving pay increases to people who should have been finding the savings all along, and it took a piece of legislation in order to mandate that that be done."
"And help me swallow that pill," he told Fecher.
"A lot of those that are on that list have been finding efficiencies within their particular department," Fecher said. She said they would now do the same thing in their much larger departments.
CRIME LABORATORY
Kermit Channell, executive director of the Crime Lab, said in a letter dated May 6 to Barnhill that he requested Moran's raise because she "has taken over all building operations, including all construction projects associated with the Lowell Laboratory and all Little Rock Laboratory projects."
"Ms. Moran will also be responsible for all building security monitoring and key contact point for all building maintenance," he wrote in his letter. "These additional duties have been assigned to Ms. Moran in addition to her role as supervisor for all laboratory section Administrators."
The costs associated with the raise will be offset by salary savings, Channell said.
Hutchinson said last week that in a meeting with Channell, he ordered the rebidding of two contracts involving a firm co-founded by Moran.
The firm, PinPoint Testing LLC, has benefited from more than than $150,000 in direct and indirect business with the lab since 2017, records show. According to the affected contracts, PinPoint was in line to potentially earn millions from the Crime Lab by 2024 for toxicology services and equipment known as "Tox-Box" kits.
An Arkansas Democrat-Gazette article June 2 revealed the business dealings and raised questions about Moran's independence from PinPoint's work at the Crime Lab.
Moran on Friday informed Larry Walther, director of the Department of Finance and Administration, that she will recuse "from all activities that involve PinPoint's relationship" with the Crime Lab. Moran also will no longer supervise the toxicology section, for which PinPoint has provided the work, and also will stop conducting annual performance evaluations for the section supervisor, Kristen Mauldin.
Moran's husband, Jeffery Moran, a former branch chief at the Arkansas Department of Health, is PinPoint's chief executive. He holds a 12.4% interest in the company, according to Cindy Moran, who owns a 12% share.
Channell said Tuesday in a written statement to the Democrat-Gazette that Moran assumed the increased duties at the Crime Lab because "our Assistant Director Rick Gallagher retired on 06/30/2017 and Cindy Moran assumed these roles while keeping her current duties as Scientific Operations Director with no additional compensation."
Channell said the raise is not related to her recusal from all activities that involve PinPoint.
Information for this article was contributed by Eric Besson of the Arkansas Democrat-Gazette.
Metro on 06/19/2019