The UCA money trail UPDATE | Arkansas Blog

Wednesday, July 2, 2008

The UCA money trail UPDATE

Posted By on Wed, Jul 2, 2008 at 2:50 PM

I've gotten some answers to questions raised by the hurryup of a windfall bonus for UCA President Lu Hardin.

This began in August 2005, with the adoption in a public session of the UCA Board of Trustees, this resolution, proposed by Rush Harding:

That the Board of Trustees reaffirms President Hardin's five-year rolling contract; that President Hardin's salary increases for the five-year period beginning July 1, 2005, be limited to the average pay increase awarded to the faculty; that a deferred compensation plan for President Hardin be established from the Board of Trustees Endowment Fund in the amount of $60,000 per year for a period of five years, commencing July1, 2005, totalling $300,000, and that the $300,000 will be vested and available to President Hardin at the conclusioin of said five-year period.

We now know that the UCA Board decided in secret in May, without taking a specific public vote, to pay Hardin the $300,000 immediately, though he had not yet accrued even $180,000 in credits.

Jack Gillean, UCA's vice president for administration, tells me Hardin has been paid the full $300,000 with what he understands was a UCA check. No money had been deposited into a fund that could have gained income during the accrual of Hardin's time credits, he said. No annuity was purchased that could have reduced the cost of the deferred comp plan to the university.

Gillean said it is his understanding -- but as yet no written record exists of what happened in the May UCA Board meeting -- that a private source will repay the $300,000. If that means the UCA Foundation, it means a foundation run by Kelley Erstine, who is also vice president for development at UCA, and which reaps a significant amount of income from leasing space to UCA. That makes it, in one man's opinion, somewhat hard to argue that the Foundation is a fully independent and private operation. It seems clearly to be supported in part by public money.

I asked about bonus payments to presidents generally. Are they legal? Or is pay to a university president not allowed to exceed the statutory limits in appropriation legislation? Gillean said the law allows colleges to pay up to 25 percent more than the salary line item "to recruit and retain exceptionally well-qualified employees in certain categories" and the president is covered by that law.

Hardin, however, makes $253,000. Under the law, it would seem that his pay in this year couldn't be greater than about $316,000. With bonus, his pay this year is about $553,000.

So here's what we have: A public payment of money not authorized by a legal action of the Board of Trustees and seemingly in excess of the amount authorized by law. A dream come true for a lawyer who specializes in illegal exaction lawsuits? I don't think I heard Gillean disagree with this rhetorical question.

UPDATE: Hardin defends the May board action as legal. The board voted on a group of unspecified personnel actions, none yet recorded in official minutes. I wouldn't want to be the one arguing in court for the sufficiency of that vote, most likely shrouded in secrecy on account of a faculty pay freeze and tuition increase at the same meeting. And there's still the question of calling this a $60,000-a-year supplement. To restate: he was cut a $300,000 UCA check for roughly two years and nine months of work. I didn't take math at UCA, but I still figure that at something more than $60,000 a year.

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