UCA bonus holds some public funds
Posted on Friday, July 4, 2008
CONWAY — A one-time $ 300, 000 payment intended to keep University of Central Arkansas President Lu Hardin from leaving UCA came from a board of trustees fund that includes public and private money.
The fund includes private donations in addition to excess revenue from student housing fees and food and book sales, Hardin said Thursday.
Hardin conf irmed the money’s source amid speculation about what compensation the board has given him since he became president in September 2002.
Earlier this week, Hardin and board of trustees member Rush Harding III of Little Rock said the $ 300, 000 was coming from private funds.
Hardin explained Thursday that he and the board agreed three years ago, when the payment was first considered, that the money was to be reimbursed by private donations.
He described the fund as “quasi-public-private” and said he is confident that reimbursement will be complete in six months to a year.
He said “a few” donors already are lined up, but he declined to identify them.
Hardin got the payment, originally called a deferredcompensation package, about two weeks ago. The board voted in 2005 to give him the money if he stayed there five additional years. But on May 2 of this year, trustees voted to give him the full amount now. The May decision was not made public until media inquiries this week.
Hardin has acknowledged that reporters had asked him weeks ago about rumors that he received a “raise” and that, through a spokesman, he had said those rumors were untrue. Even though he said he should have, in hindsight, been more forthcoming, he stressed that he did not get a salary raise.
“I did not handle this as well as I should have,” he said Thursday. He said he was “going to lengths after lengths to change our policy and to make sure [the board votes ] more definitively” in the future.
Hardin also said that, as a lawyer, his own concerns in 2005 led to an agreement that private sources would replenish the fund. He said two attorneys advised him and the board that the fund was not general revenue and, therefore, any payment from it would be exempt from a state law capping such extra compensation university presidents may receive.
“But there was some doubt in my mind,” he said, and he wanted to be safe.
The board of trustees Endowment Fund is a discretionary one established in 1995 to “provide long-term support for scholarships and other operations of the university,” according to the resolution creating it. The fund has since provided money for such varied recipients as the UCA-based Oxford American magazine, the university’s centennial celebration last year, and a settlement with former President Winfred Thompson who resigned in December 2001.
The fund is probably down to about $ 50, 000 now, but will increase after excess revenue from the fiscal year that just ended is added, said Paul McLendon, UCA vice president of finance. McLendon said no state aid is included in the fund but the question of whether the fund consists of private or public money is a gray area.
McLendon said part of the board fund’s principal money would have been used for Hardin’s payment. He was out of his office Thursday and said he did not know how much.
The original resolution says in part “that the university is prohibited from spending any of the principal amount put into the endowment fund; and that expenditures from the income of the fund would require board of trustees approval.”
But McLendon and Jack Gillean, vice president for administration and UCA’s former general counsel, agreed that the board has the discretion to spend the money as it wishes. Further, Gillean said, the board very well could have amended the resolution since 1995. In any event, the fund has no state money in it, making its use less restricted, said Gillean.
Dale Ellis, a spokesman for the Arkansas Department of Higher Education, said he wasn’t sure what restrictions state law has on such one-time payments and suggested that a reporter call the state attorney general’s office. Officials in that office declined to comment.
Chief Deputy Attorney General Justin Allen said the agency does not comment to the media or general public on such matters because answers to legal questions require difficult and lengthy analysis and because the office could be representing a public agency if it were sued.
Richard Weiss, director of the Arkansas Department of Finance and Administration, said that “on the surface” he did not see a problem with UCA’s having created a fund that mingled private and public money.
“Colleges and universities have extra flexibility,” Weiss said. “They’re not like a normal state agency.”
Gillean, whose office compiles the board of trustees ’ agenda booklet, also said he still does not know if the board plans to take a public vote at its next meeting, July 25, on the payment to Hardin. The board’s vote May 2 was in executive, or closed, session followed by a generic personnel vote with no public mention of the payment to Hardin. The university’s faculty senate has questioned whether this lack of openness violated state law.
“It would be cleaner if it were handled that way” with a public vote, Gillean said.
Hardin said he, too, thought “it would be good” to take such a public vote.
UCA English professor Michael Schaefer, president of the state conference of the American Association of University Professors, meantime, said Thursday that he accepts the statement that the Hardin payment came from a discretionary fund.
“I don’t really have any doubt [about that ],” he said. “I don’t think this is money that’s being taken out of the operating budget.”
The issue, he said, is why this action wasn’t done “openly, as a matter of record.”
“To me, in some ways, it’s less about the money per se than about the procedures, the lack of transparency,” Schaefer said.
“Certainly, the people that I have talked to are perturbed.” There’s “just the whole sense that this is being done [along with retirement benefit cuts ]... during the summer when supposedly faculty are not paying attention.”
Hardin’s annual salary is $ 253, 774. Of that, he has said, $ 51, 000 comes from private funds.
FEEDBACK:
Something to say about this topic? Submit a Letter to the Editor online
