Arkansas lawmakers on Tuesday requested an investigation into Central Arkansas Water after questioning administrators about payments the public water utility made to nonprofits and an email sent by a group of employees objecting to legislation that aimed to end affirmative action in state and local government.
The Joint Performance Review Committee voted with audible dissent from at least one lawmaker to file a complaint with the Arkansas Ethics Commission over “potential violations of the law pertaining to Central Arkansas Waters’ lobbying and donations activities” regarding Senate Bill 71 during this year’s legislative session.
The committee convened to consider the water utility’s actions at the request of Sen. Dan Sullivan, R-Jonesboro, who sponsored the failed affirmative action bill.
Sullivan opened the meeting by pointing to a March email sent by the water utility’s “justice, equity, diversity and inclusion” or “JEDI” team which asked employees to contact their state representatives to oppose the affirmative action bill.
Tad Bohannon, CEO of Central Arkansas Water, told lawmakers he was not aware of the email before it was sent. He said the message was “very unfortunate and it was inappropriate.”
The group’s email address was shut down after the team sent the email, Bohannon said.
While Sullivan recognized Bohannon had responded quickly, he questioned whether the JEDI team had acted as a lobbying agency by encouraging opposition to his bill. Sullivan said he learned of the email after hearing from a Central Arkansas Water consumer who had received it.
“There’s nothing illegal at all about an agency such as yours lobbying,” he said. “They have that freedom of speech to participate in that, but that sure appears to me what they did.”
Bohannon said the JEDI team sent the email internally and that he had no knowledge of it being sent to consumers. He told lawmakers he had not looked into whether the group’s actions constituted lobbying.
[DOCUMENT: Read CAW spending breakdown email » arkansasonline.com/830CAW/]
Lawmakers also questioned why the water utility had directed $118,525 to a series of nonprofit organizations within the last year rather than using the funds to invest in infrastructure or other projects.
Central Arkansas Water serves around 500,000 Arkansans in eight counties and has an annual operating budget of roughly $78 million.
An exhibit provided to lawmakers showed the utility made contributions to 22 organizations within the last year. The Little Rock Regional Chamber received the most funds at $30,000, followed by the Associated Industries of Arkansas Foundation Inc. with $25,000 and the Women’s Foundation Arkansas with $15,125, according to the exhibit.
Bohannon said working with nonprofits helps the utility connect with community members and encourage them to drink tap water rather than bottled water.
“We reach out to organizations that reach us out into communities to build that trust,” he said.
Outreach through nonprofits can also help the utility grow its workforce, he told lawmakers.
Rep. David Ray, R-Maumelle, questioned why the utility had relied on nonprofits rather than advertising for its outreach.
“Wouldn’t you agree that maybe using this money for an advertising campaign that actually delivered the specific message that you’re talking about might be more effective at educating the public rather than just doling out a bunch of money to organizations and sponsorships,” he said.
Bohannon said contributing to nonprofit organizations can allow the utility to send employees to community events where they can provide a “personal touch.”
Bohannon cited state law which allows water utilities to expend funds with nonprofit organizations within their community. He also told lawmakers the utility’s board had given him discretion to spend funds up to a certain amount.
Sen. Jonathan Dismang, R-Beebe, said he found it “inappropriate” for Bohannon to have the authority to determine how to spend $118,000 of ratepayer funds on his own.
“I do appreciate, I guess the awareness, that you brought to several code sections that clearly need to be revised,” Dismang said.
Rep. Joy Springer, D-Little Rock, said she was familiar with a number of the nonprofit organizations the utility contributed to within the last year and noted the entities provide scholarships, educational opportunities and economic development to Central Arkansas communities.
“These ratepayers, who are making the payments for the services that you provide, their children and other persons within our community, they’re benefiting from these payments that are being made by you,” she said.
Bohannon said Central Arkansas Water is working on a “community support policy” that will help focus the utility’s outreach on economic development, workforce development and education on water quality and conservation.
During the meeting, lawmakers also questioned Bohannon on why certain communities serviced by the utility are not represented on the utility’s board.
Bohannon said there are water utilities across the state where people are served who don’t have a say in who sits on the governing board.
Lawmakers hinted that more discussions on donations to nonprofit organizations are forthcoming.
“I look forward to coming back and talking more not only with your organization but how we’re funding some of these nonprofits and how we’re choosing some and not the others,” Sullivan said.
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