UPDATE: Midnight pay raise at Little Rock City Hall | Arkansas Blog

Monday, December 10, 2018

UPDATE: Midnight pay raise at Little Rock City Hall

Posted By on Mon, Dec 10, 2018 at 1:17 PM

ABOUT THAT PENSION: Changes are on the City Board agenda for Mayor Mark Stodola's coming retirement benefits. - BRIAN CHILSON
  • Brian Chilson
  • ABOUT THAT PENSION: Changes are on the City Board agenda for Mayor Mark Stodola's coming retirement benefits.

I note this addition to the agenda of the Little Rock City Board Tuesday night:

To establish parameters for the Retirement Benefits for the Mayor of the City of Little Rock, Arkansas; to provide Spousal Benefits for the widow of a Little Rock Mayor; to declare an emergency; and for other purposes.

Details? With 19 hours remaining until the meeting at 4 p.m., taxpayers are told only "information forthcoming" about an improvement in retirement benefits for a mayor leaving office in three weeks? UPDATE: We now know that the ordinance will give Stodola a significant retirement sweetener.

Back to where we started.

At a late hour, we may finally get the details on just how much loot retiring Mayor Mark Stodola hopes to carry away with him when he leaves. I'm also informed by one source that the issue of granting him a last-minute pay raise so as to ratchet up his retirement benefits, may not be off the table, as he'd earlier assured me was the case.

I'd reported previously that Stodola was expecting some $173,000 for unused leave time. He makes $160,000. He claims he should accrue unused time off, unlike most elected officials in the state, because the law says he's to be paid commensurate with the city manager, who makes about $189,000. City Manager Bruce Moore's contract indeed provides for accrual of unused leave time. But it seems to limit the accrual to 50 days and also provides a three-month severance payment for termination other than for cause.

Stodola apparently also wants to amend provisions of his retirement to include a continuing payment to his wife should he predecease her.

Maybe Mayor-elect Frank Scott should have a comment on throwing additional money around for Stodola and Moore at a time when non-union city employees are getting no pay raise beyond step increases and when doubt exists on whether sales tax income, the major source of city revenue, can sustain city spending at its current level. (Moore says he always asks for pay in line with other employees. He says non-uniform employees will get a bonus, if not a pay increase, and he will not request a bonus.)

I have FOI requests out for the pay measure being dropped on the board tomorrow with no public notice. City Attorney Tom Carpenter says he has no responsive documents as yet. He says there is a draft ordinance being prepared that would make the mayor's retirement the same as provided in the formula for the city's defined benefit plan. What it was worth before or after and what the cost might be to the city isn't known at this point.

One tipster suggests some changes might be in the offing for Moore's own arrangement. He's reportedly a friend of the new mayor, but the new mayor has also made clear he expects the city manager to take more of a subordinate role to the mayor than has often been the case in recent years.

UPDATE: Early this evening, I received some response including a draft ordinance to my FOI for information about the Tuesday item of business.

In short, an explanation from City Manager Bruce Moore says the ordinance would change existing city law on a mayor's benefits to conform with a defined benefit retirement plan for other city employees adopted in 2014. It will give Stodola 50 percent of his current pay for the balance of his life. The ordinance doesn't state how this would compare with his previous contributory plan.

The new pension deal also will include an annual cost of living adjustment and allow him to pay for a spousal benefit. Moore said the ordinance will treat Stodola the same as other city employees.

The ordinance draft makes no reference to any change in Stodola's pay of $160,000.

Moore wrote:

Initially, a private retirement plan was established and has received contributions from Mayor Stodola and the City.

In 2014, however, the City adopted a new defined benefits retirement plan for the City. After consultations with actuaries and pension attorneys, it has been determined that a comparable retirement plan for the mayor would be more easily administered if it was a part of the 2014 plan. This ordinance declares that will be the situation in the future, and also permits the current mayor to participate.

There is a state statute which mandates that a mayor with a certain period of service as mayor receives a ½-salary benefit as an annual retirement benefit. This statute also allows for a COLA, and spousal benefits. This ordinance includes these provisions so any mayor would be treated the same as other City employees.

My FOI request also produced a series of emails that explains why Stodola is claiming reimbursement for leave time in excess of what was seemingly provided to the city manager. Stodola writes that the accrual limit was waived for the city manager so it should be waived for him. The memos say the 2019 budget Moore prepared provided for the amount he's to receive, though I still don't have a final figure on that.
The ordinance will apply to future mayors. They may retire at half pay after only 10 years in office, if age 60 or older, or after 20 years at any age. The ordinance also allows counting some prior public service in the equation.

The ordinance follows comment by human resources director Stacy Witherell to City Attorney Tom Carpenter that said:

Since we are ‘writing a new chapter’ for the Mayor in the DB14 plan, the COLA or spousal benefit is not required, it can be whatever the BOD decides. We are already modifying the plan to allow for his benefit to be half of his salary although he does not have the service credit for half. The Board I think needs to understand that the half the salary is the only required part and up to them on the Cola and spousal benefit. Jody can address the COLA because the pension trustees will not have the information by January to determine what the COLA will be for that year so I think the Mayor COLA will lag after it is granted in July for the rest of the retirees.
Carpenter read the combination of state law and the city pension plan as requiring a COLA.  I've been unable as yet to get a figure on how the new benefit compares with Stodola's old benefit, the cost to the city and what he'd otherwise be entitled to get under the plan with less than years required for maximum benefit.

IMPORTANT UPDATE: Witherell, working overtime, provided some answers to my questions:

The defined benefit 2014 plan has a 2% multiplier so to get half of your salary you would have to have 25 years of service credit. So an employee would have to work 25 years since 2014 when the plan was implemented or buy other service credit from other municipal service credit.

Unknown what is budgeted at this time since it is disputed what should be paid.

The current defined contribution plan allows for the lump sum amount be paid to the employee when the employee leaves employment. It would be up to the employee to take the money in lump sum or rollover the money into whatever investment vehicle they choose.
So instead of getting 8 percent of salary under the plan, or $12,800, Stodola would get $80,000 under the ordinance. Plus he'd be entitled to payment of his own contributions to the previous plan in a lump sum or rolled over to another retirement account. He would not recoup the city matching 17 percent contributions during his 12 years in office, but his 12.5 percent ($20,000 a year for 12 years, or $240,000 not counting growth of the investment) will come back to him with earnings.  He'll also remember, have $173,000 or so in mad money from that leave time.

I still don't know what his payment would have been had he chosen to take the benefits from the older plan. UPDATE: Since that money went into a private account, the amount depends on how the investment fared and so the figure isn't publicly available.

Love, Little Rock.

ONE MORE UPDATE: A lawyer provides answers to numerous questions raised by special treatment for Stodola, including whether it could recoup some of his contributions to the old plan to offset the cost of giving him better benefits than he's otherwise qualified to receive in the defined benefit plan (no was the answer to that question.)

Actuary Jody Carreiro has also made some estimates on the cost of adding new benefits to the plan. He outlines an increase in value of the new plan of roughly $1 million, counting the new COLA and survivor benefit, but a comparison of added annual cost to the city isn't known because information on his existing account balance is redacted. It presumes past city contributions would be transferred in support of the new plan, but perhaps not Stodola's own contributions.

PPS: City Manager Bruce Moore also expects to ask for clarification of his contract provisions as to accrual of leave days. It will be hard to deny him unlimited accrual if Stodola is approved for same. He had accrued 100 days of leave at the time he became city manager, for example. Moore says he still doesn't have a final figure on money to be paid Stodola, last estimated at $173,000. It will be budgeted as an expense against the pension fund, Moore said.

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