Lawsuit Says Conway Misused Tax Proceeds

A police officer and firefighter have sued their employer, the city of Conway, regarding alleged misuse of tax funds and misrepresentation of the city's employee pay increase system.

Police Officer Richard Shumate and fire department Capt. Damon Reed claim in the lawsuit that the city has not been using the proceeds of a quarter-cent sales and use tax, which was passed in 2001 exclusively for salary increases, for its purpose.

Conway "got in a financial crunch because of other stuff they wanted to do; they used the tax money for regular salaries and ran out of money," Reed and Shumate's attorney, Russell Wood of Russellville, said. "We also know that the proceeds of the sales tax collected each year exceeded what the step increases would've cost. We believe that they used that extra money each year for something else."

The class-action part of the suit argues that the city inaccurately described steady employee pay raises, which stopped around 2007, while recruiting new fire and police officers, Wood said.

Wood expects to be suing for about $9 million in compensation for his clients, which could number in the hundreds for the class-action part, he said. He has been bombarded with phone calls from city employees who want to help with the case, Wood said.

The lawsuit was filed Sept. 18 in Faulkner County Circuit Court.

Conway Mayor Tab Townsell did not immediately return a call seeking comment.