Rogers attorney settlement not complete, officials say

Lipscomb
Lipscomb

ROGERS -- City Attorney Ben Lipscomb had yet to sign settlement papers with the city Wednesday as he disputed the amount of tax withholding from his $390,000 check, city officials said.

The City Council unanimously voted Tuesday night to pay Lipscomb $390,000 to resign. The settlement also would end a federal lawsuit filed by Lipscomb, an elected official, against Mayor Greg Hines and the City Council. The settlement will not be official until Lipscomb signs legal documents.

Lipscomb’s cost

The estimated cost of employing Ben Lipscomb through Dec. 31, 2016:

• Salary, taxes, benefits: $310,101

• Sick leave payout: $28,996

• Vacation leave payout: $6,765

• Operations and Maintenance: $33,105

• Total: $378,967

Source: City of Rogers

Hines said the city's software program automatically holds taxes at 39 percent when processed in a lump sum. Lipscomb's tax accountants believe it's possible to pay the amount with a lower tax percentage withheld, he said.

"It doesn't look like we are going to get this settled today," Hines said Wednesday afternoon. "We are in no different position than we were last week from a legal position."

Lipscomb and his attorney, Doug Norwood, declined to comment Wednesday. Lipscomb said Tuesday night he was "pleased" with the settlement.

This is the second payout the city has made to an employee in the past eight months.

Jerry Hudlow, former city finance director, sued in U.S. District Court after he was fired and was returned to his job and awarded $630,000 in May. Hudlow now works as Lowell's finance director.

Lipscomb has held his position for about 24 years. He filed a civil rights lawsuit against city officials in federal court in November. He claimed the City Council violated his constitutional rights when it transferred most of his duties to a staff attorney who answers to the mayor. Those duties included acting as the city's attorney in all civil litigation along with providing services to the council and mayor.

Three aldermen signed affidavits saying Lipscomb suggested the changes to his job duties. Hines also previously said Lipscomb recommended the changes.

The total cost of settling will be $403,002, Hines said. This includes $13,002 that the city pays in taxes on the money. The Arkansas Municipal League will pay $53,927 of the settlement, leaving the city with $349,074 to pay, Hines said.

Kit Williams, Fayetteville city attorney and state chairman of the International Municipal Lawyers Association, said he was "surprised" to hear about the settlement.

Two Rogers residents who filed to intervene in the lawsuit that was settled argued Lipscomb should be removed from office, and he expected the city to wait on a ruling on that before settling, Williams said.

Hines said the decision to settle was more complicated than just paying an elected official to resign.

"There are no provisions in state law that allows a city to remove an elected official," Hines said.

Residents can file lawsuits against the city to remove an elected official, Hines said. Residents can also orchestrate a recall election, he said.

Justin Eichmann, an attorney for Rogers, said a recall election wasn't a viable solution for this case. The Arkansas Municipal League hired Eichmann, an attorney with Harrington, Miller, Kieklak, Eichmann & Brown of Springdale, to handle the Lipscomb lawsuit for the city.

Arkansas law requires petitions to hold recall elections be filed with the county clerk between 91 and 105 days before to a general election, Eichmann said. The next general election is set for 2016.

"The recall would have only been available in two years," Eichmann said. "That was looked at by intervenors, but it is not an option. In other places you can have recall election at anytime, but that is just not the case in Arkansas."

The petition also must be signed by 25 percent of registered voters. Rogers has 28,969 qualified voters, which means 7,242 signatures would be required.

The intervenors, Brian Ferguson and Ellen Turner, said Lipscomb isn't qualified to hold office since he doesn't live in Rogers, Eichmann said. The residents amended their complaint last week asking the judge to vacate the office.

The complaint states Lipscomb voted in city elections by using an address of a Rogers house he owns but doesn't live in.

Eichmann said a federal judge who heard the residents' case earlier this month was hesitant to decipher Arkansas law, mentioning the case might be a better fit in state court. The process of trying a federal and state case at the same time could have taken years, Eichmann said.

"The resolution wasn't going to happen quickly and it wasn't going to be easy," Eichmann said. "How do you deal with that? It was a very tricky situation. In our minds there was little that could be done but to resolve it."

It's rare in Arkansas for a city official to be removed from office, said Don Zimmerman, executive director of the Arkansas Municipal League. The nonprofit association is the leading lobby for cities.

There have been about eight attempts to remove a city official out of the "hundreds and hundreds" out there subject to a recall provision passed in 2009, Zimmerman said. Few of the attempts were successful and, in at least one case, the removed elected official later won election again, he said.

Most of the removal attempts were for officials in small towns, he said.

"These are pretty unique circumstances," Zimmerman said of the settlement in Rogers.

Hines said every option to resolve the issue was vetted by city officials and attorneys.

"Given the circumstances that we are in, I think this settlement is the appropriate way for the city to move forward," Hines said.

It would have cost the city $379,968 to continue employing Lipscomb through the end of his December 2016 term, Hines said. That number includes $310,101 of salary for the next two years. It also includes sick and vacation time payout along with $33,105 for operations and maintenance.

Hines said the operation and maintenance cost includes training and subscriptions to legal services such as national online law libraries and LexisNexis. It also covers expenses such as office supplies.

The City Council cannot vacate Lipscomb's position until after he officially resigns, which its members hope to do during the Feb. 10 meeting, he said. At that time he plans to propose that the city attorney position become ceremonial. The person filling the position would receive a small stipend to help advise the council and mayor.

Several issues led to the transfer of job responsibilities to a staff attorney, and the reduction of Lipscomb's staff.

Lipscomb acknowledged advice he gave Hines led to Hudlow, the former finance director, being fired.

"I know the mayor had to put some distance between us for political reasons after the Hudlow case was settled," Lipscomb said previously.

Lipscomb was the focus of an investigation into a complaint he used his city ID to enter a VIP tent during a concert at the Walmart Arkansas Music Pavilion last year.

A Springdale officer working security said Lipscomb showed a badge, and she believed he was a law enforcement officer. Marc McCune of Crawford County, serving as special prosecutor, determined there was no reason to file a criminal complaint against Lipscomb for impersonating a law enforcement officer.

In another incident, a two-year-old police report discovered through a Freedom of Information request revealed a former city employee said Lipscomb offered Xanax to him. The statement was investigated, but no complaint was filed by police.

William Horton, an attorney, filed a complaint against Lipscomb for sending him harassing email about a District Court case. No action was taken.

Hines, in a September news conference, said if he had authority over an elected official he would have fired Lipscomb after the incident at the music pavilion.

Teresa Moss can be reached by email at [email protected] or @NWATeresaM.

Information for this article was contributed by Doug Thompson of the Northwest Arkansas Democrat-Gazette.

NW News on 01/29/2015

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