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story.lead_photo.caption State Sen. Bill Sample, R-Hot Springs, is shown in this file photo.

CORRECTION: Murry Witcher is a North Little Rock alderman. His first name was misspelled in this article.

Arkansas Municipal League Executive Director Don Zimmerman, who describes himself as "a working retiree," has received annual pay exceeding $300,000 for 10 of the past 11 years. That pay has ranged from $267,652 in 2013 -- the only year in those 11 when it was less than $300,000 -- to $466,900 in 2012, according to league records.

Photo by Bobby Ampezzan
Arkansas Municipal League Executive Director Don Zimmerman is shown in this file photo.
Photo by AP file photo
Gail Stone, former executive director of the Arkansas Public Employees Retirement System, speaks to legislators in this 2011 file photo.

Zimmerman, 72, was authorized by the league's executive committee to collect even more in pay, but he chose not to, making for a total of $750,000 that he could have collected but didn't, league records show.

A lawmaker who is critical of the league, state Sen. Bill Sample, R-Hot Springs, is questioning why Zimmerman makes so much money, on top of the state retirement benefits he's already collecting.

"If he's semiretired, why would he draw a check like that?" Sample asked.

Zimmerman, who has been the system's executive director since 1974, said he has drawn retirement benefits from the Arkansas Public Employees Retirement System for the past 13 years, but he declined to disclose how much he receives a year in those benefits.

The league's executive committee authorized him to retire for a month beginning Jan. 1, 2002, and allowed him to resume work on Feb. 1, 2002.

"I don't draw a salary. I am paid on an administrative fee basis," Zimmerman said.

"I am a working retiree," he said.

The retirement system currently has 70 "rehired retirees" working in municipal government, 274 in county government and 567 in state government, said system Executive Director Gail Stone.

Critics of allowing state and local government retirees to return to work and draw paychecks as well as pensions call the practice "double dipping." Supporters of the practice say it allows government to benefit from the unique expertise of longtime government officials.

While the municipal league gets most of its money from the state's 500 cities, "we are not a state agency," Zimmerman said, and the league doesn't receive funds from the state or federal government.

"We are an agency of the municipalities and owned by the municipalities," he said, adding that the league is organized under Section 115 of the Internal Revenue Service code as "an instrumentality of municipalities."

Two months ago, Sample received the Legislative Joint Auditing Committee's approval for a special audit of the league after he raised concerns about Zimmerman's pay.

But members of the league's executive committee defend Zimmerman's compensation, saying it's based on his performance in managing several league programs that have saved cities millions of dollars.

No pay for now

Zimmerman said he is authorized to receive annual pay of $579,799 this year, but he stopped collecting the money a few weeks after Sample questioned his earnings and immediately after the league's convention in Little Rock in late June.

Zimmerman said he has worked "pro bono" since June 29 and won't take any pay until the league's board and state auditors report back. Officials for the Arkansas Legislative Audit, formerly the Division of Legislative Audit, expect to complete their work later this year.

So far this year, Zimmerman said he has collected $241,231 in pay.

"I put my heart and soul into this organization, and it would tear me up if there is anything wrong with the organization," Zimmerman recently, referring to the audit.

He said he welcomes the legislative scrutiny, and he hopes it leads to better understanding among lawmakers about the league's various programs.

League President Rick Elumbaugh, who is Batesville's mayor, said the group's executive committee will consider Zimmerman's pay later this year.

"We feel strongly that through Don's leadership, the programs are so strong," Elumbaugh said, adding that Batesville has saved money through the league's health insurance program and vehicle insurance program.

Zimmerman, who is also a licensed attorney, said he has overseen the development of programs with annual revenue of roughly $100 million. The league's revenue stems from public and private funding. It includes cities paying to participate in its voluntary programs, city employees contributing money for their health insurance, and registration fees for its conferences, he said.

Zimmerman is authorized a salary of 0.85 percent of the league's reserve fund this year. The reserve was $67.3 million at the end of last year, according to league records.

The league has 73 other employees whose annual salaries total $4.6 million, according to league records. Its director of legal services, Mark Hayes, is the second-highest-paid league employee with a salary of $232,000 a year.

Zimmerman said his pay has been tied to the size of the league's reserve fund for the past 30 years, although the percentage has fluctuated, league records show.

He said he had been paid a percentage of the reserve fund as well as a base salary until recent years.

Sample said authorizing pay for Zimmerman based on 0.85 percent of the league's reserve fund "doesn't pass that smell test."

But former North Little Rock Alderman Martin Gipson, who is a former league president, said it's less expensive for the league to have Zimmerman manage its programs -- including health insurance, workers compensation and vehicle insurance programs -- than it would be to contract with private companies or hire several managers with six-figure salaries to manage providing these services.

So that more than justifies paying him a percentage of the league's reserve fund, Gipson added.

Challenging legislators

The Arkansas Municipal League has made several lawmakers unhappy by lobbying on contentious legislation in the past few years, Sample said.

A fellow lawmaker shares that assessment.

"The municipal league is using the people's money to fight issues that the people want," said state Sen. Bart Hester, R-Cave Springs, noting that the league opposed his legislation to prevent local governments from expanding anti-discrimination protections beyond those contained in state law.

The legislation, now Act 137, became effective July 22. Supporters of the law are seeking plaintiffs to challenge anti-discrimination ordinances in Eureka Springs, Hot Springs, Little Rock and Pulaski County, which the supporters say conflict with the new state law.

Zimmerman said the lobbying reflects the views of most of the league's members. "Our positions are established through local elected folks," he said. "I don't think it was a Republican vs. Democratic thing as opposed to the content of [those bills]."

Old dispute

The conflict between Zimmerman and Sample predates this year's regular session of the Legislature.

Zimmerman said Sample got angry in 2013 after the group's then-president Camden Mayor Chris Claybaker signed up to testify against legislation sponsored by Sample that changed municipal annexation laws.

Zimmerman had already privately promised support for an amended version of the bill and had signed up to testify in favor, Zimmerman said.

Zimmerman said Claybaker sought a brief delay on the measure because the league's executive committee wanted more time to review the proposal. Sample agreed to delay action on the legislation to allow for further review and then the Legislature enacted an amended version.

Claybaker, who is now Berryville's director of economic development, said Sample later asked him to fire Zimmerman.

Sample said "this was said in the heat of the moment" because Zimmerman "went back on his word."

Plenty of defenders

Several former league leaders defended Zimmerman's work and pay in a letter to the Arkansas Democrat-Gazette after learning that the newspaper was examining those issues.

"Given the considerable responsibility weighing on his shoulders, his tenure and track record of forty plus years, we each fully support the performance-based pay structure to compensate Don," said Conway Mayor Tab Townsell, Lake Village Mayor JoAnne Bush, Marion Mayor Frank Fogleman, Paragould Mayor Mike Gaskill, Pea Ridge Mayor Jackie Crabtree, St. Charles Mayor Robert Patrick and North Little Rock Alderman Murray Witcher.

The local officials wrote that "Don eats, sleeps and breathes Arkansas cities and towns."

"Having devoted much of our lives to our hometowns and to our state, we are pleased with the good work that Don and his team has done on behalf of us, the members," the former league leaders said.

They credited the league with saving local governments large sums of money. Conway, they said, saved $1.4 million this year by dropping its former health insurance plan and signing up with the league's municipal health benefit fund.

The former league leaders said the league's municipal vehicle program allows cities to purchase liability coverage for $100 per vehicle per year, and the league charges the same rate as it did in 1982.

SundayMonday on 08/09/2015

Print Headline: Municipal league exec's pay draws scrutiny

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Comments

  • dm3ken
    August 9, 2015 at 9:30 a.m.

    Maybe it's time for voters to retire Bill Sample who actually gets taxpayer dollars and has never accomplished much of anything as a representative.

  • carpenterretired
    August 9, 2015 at 2:26 p.m.

    That's the old top of the totem pole guy gets the big bucks tradition while the guy at the bottom of the old totem pole does good to feed his kids . In the chicken business the manager who watches the guy plucking the chickens makes the big bucks while the actual plucker barely makes enough to pay the electric bill ,but that's the foul business good old capitalism.

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