After two failed amendments, the Little Rock Board of Directors approved a 2015 budget Tuesday that will give employees bonuses in January based on their salaries with the possibility of an additional bonus or raise being awarded midyear.
The fire, police and nonuniform employee unions all objected to the bonuses, saying they favored raises instead. They also suggested that the decision to give a bonus or raise be put off until the unions completed contract negotiations with the city manager. Each union representative said that not doing so is operating in bad faith.
City Manager Bruce Moore proposed spending $1,497,750 to fund tiered bonuses for everyone except himself, the assistant city manager, department heads and assistant department heads. He found the funds for the bonuses in the $194.8 million budget by increasing the projected sales-tax revenue for next year based on the most recent tax-revenue totals and by using $500,000 from the city’s reserve fund.
The bonuses favor lower-salaried employees. Those making less than $40,000 will receive a $1,000 bonus. Employees making $40,001 to $60,000 will get a $750 bonus, and anyone making above that will receive $500.
In comparison, a 1 percent raise would cost the city about $1.2 million and a 1.5 percent raise would cost about $1.8 million. That, however, would be a permanent addition to the city’s base budget over the years, whereas bonuses would be a one-time cost, Moore said.
Ward 7 City Director B.J. Wyrick agreed with the employee unions that raises should be offered instead of bonuses. She suggested cutting funding increases to several outside agencies — Central Arkansas Transit Authority, First Tee golf program for youths, the Arkansas Arts Center and the Downtown Little Rock Partnership — as well as cutting the proposed funding increase for the city’s land banks.
Her amendment failed 6-4. Wyrick and City Directors Joan Adcock, Erma Hendrix and Doris Wright voted for the amendment.
Other on the board, however, cautioned against doing that because the city might not be able to support that long-term increase. Ken Richardson, Stacy Hurst, Brad Cazort, Lance Hines, Dean Kumpuris and Gene Fortson voted against Wyrick’s amendment.
Adcock was the first to propose putting off the bonus decision while at the same time committing funds to it so that the situation could be reviewed again midyear and a larger bonus or raise could be given if funds were larger than expected. Her motion to amend the budget ordinance to reflect that failed 8-2, with only she and Wright voting for it.
Cazort followed up to suggest giving the January bonus and committing to consider spending any additional revenue recognized in July to reward employees with another bonus or a possible raise. His motion passed 9-1 with Adcock voting against.
Moore pointed out that his initial recommendation to the board was to put off consideration of a bonus or raise until the middle of next year after it could be seen how much revenue is generated. The board, however, objected to that and instructed him to find a way to commit to giving raises or bonuses now.
Many on the board had previously objected to a request from CATA to increase funding by $152,206, which would raise Little Rock’s support of the agency from about $8.5 million to $8,686,869.
CATA has budgeted $203,000 for marketing next year for rebranding. Little Rock’s share of that cost is about $25,800. CATA also has a contract obligation through June of next year to provide raises to its staff. It is giving 3 percent raises, and Little Rock is funding about $210,000 of that cost.
City directors didn’t support funding the agency’s increase request when the city couldn’t afford to give raises of its own.
Other funding increases to outside agencies also upset the Little Rock board. A $150,000 increase for maintenance for the Arkansas Arts Center building, which the city owns, prompted several questions previously. There also were increases in funding to the First Tee golf program for youths ($100,000) and the Downtown Little Rock Partnership ($15,000). The city also is obligated to pay a 5 percent, or about $88,000, increase in funding for the Pulaski County jail.
Arts Center Executive Director Todd Herman wrote a letter to the board that said the center’s maintenance needs cost more than $800,000 each year. He said the center is at risk of losing accreditation with several deficiencies that have resulted from a lack of maintenance funding from the city.