Catching up on UCA | Arkansas Blog

Wednesday, July 9, 2008

Catching up on UCA

Posted By on Wed, Jul 9, 2008 at 6:24 AM

The lead story today, July 9, in the Democrat-Gazette is about the question of whether the $300,000 bonus to UCA President Lu Hardin runs afoul of state statutory salary caps.

Welcome to the party.

This question was first raised in this blog one week ago, July 2, and developed in several subsequent posts. I said then what I still say. I think the bonus is dubious under the cap. But, if a legal opinion says a public institution can take an auxiliary fund consisting of cash money generated by ancillary profits from books and burgers and spend it as its supervisors wish, even to make payments to an official in excess of salary caps, the loophole needs plugging.

UCA is moving in the right direction. It has requested an attorney general's opinion on the point. It has disclosed expenditures from the discretionary fund since its creation and the expenses don't raise immediate red flags. At least one trustee has vowed to be fully accountable on use of the account in the future. I expect the July 25 Board of Trustees to be well attended and I'd guess -- hope -- that discussions about this subject will be held in public, not in private. These are all good things, though they won't fully erase the bruising done to UCA and its successful president by the recent run of news.

What to do if there is a question about the salary cap? I think UCA can argue that Hardin earned $180,000 of his $300,000 bonus at the $60,000-a-year deferred comp pace originally approved in 2005. That would legitimately be deferred compensation, even if paid earlier than originally planned. I think the Board could legally justify moving up payment of that portion of the money. It also could authorize an additional $60,000 payment at the end of this year, which would be less than the 25 percent annual bonus allowed for extraordinary performance over statutory line-item pay. (He makes $253,000.) But the final $60,000 might have to wait another year. If this theory is correct, Hardin would have to repay a portion of the bonus.

I can't believe the UCA Board has unfettered control over an auxiliary fund generated on campus. You might just as well say the Little Rock School Board has freedom to spend its vending machine profits any way it wants, without public vote and regardless of authorized pay levels.

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