The University of Central Arkansas has formally requested an attorney general's opinion about the legality of the $300,000 pay supplement paid President Lu Hardin in May.
Can the university pay in excess of 125 percent of statutory pay (Hardin's is $253,000) if the money comes from a Board of Trustees discretionary fund? The attorney general will provide counsel.
There is, by the way, an additional wrinkle in the question of pay in excess of statutory limits to Hardin. It's not widely known and hasn't been mentioned in recent reporting, but in May 2007, the Board of Trustees authorized a $100,000 bonus for Hardin on his fifth anniversary as president for meeting professional targets set by the Board. That bonus was approved in a public Board meeting. (Quick arithmetic: In the course of 24 months, Hardin has received more than $900,000 in pay from UCA.)
But, if Hardin is limited to 125 percent of pay, that particular bonus in 2007 further complicates his potential excess pay situation. The $300,000 was early payoff of a deferred compensation plan originally promised in 2005 to be accrued at the rate of $60,000 a year and paid after Hardin stayed five years. It was paid two years early, Trustee Rush Harding has said, because other institutions were rumored to be interested in hiring Hardin away.
Seems to me they need to address the question of the legality of his total pay in 2007, too, given the $100,000 bonus.
I hope, for the sake of UCA's current embarrassment and preoccupation, that the college gets a permissive answer on its actions. I think the actions were taken with good intentions to reward exemplary performance.
But for the sake of good government, I hope the college gets a negative answer. It is bad practice for public institutions to carve out ways to pay special bonuses with cash funds. Like it or not, the legislature writes the law. It establishes salary maximums for public officials. Governing bodies with access to special money shouldn't have the ability to run end-runs on the law. In this case, it might seem justified. But you can be sure the power would be regularly abused and difficult to track.
UCA requests Attorney General opinion
CONWAY, ARK. -- Randy Sims, Chairman of the University of Central Arkansas Board of Trustees, today requested an opinion from the Arkansas Attorney General's office regarding "certain provisions of Arkansas law dealing with cash funds of a university, salaries and compensation arrangements."
The letter from Sims is attached, and the full text is copied below:
July 10, 2008
Honorable Dustin McDaniel
State of Arkansas
323 Center Street
Little Rock, AR 72201
RE: Opinion Request/University of Central Arkansas
Dear General McDaniel:
The purpose of this letter is to request your opinion on certain provisions of Arkansas law dealing with cash funds of a university, salaries and compensation arrangements.
We respectfully request your opinion on the following questions:
(1) Are “cash funds” held by an institution of higher education and paid to the institution by private companies operating the institution’s food service and bookstore, “public funds” of the institution, or are such cash funds “private funds” of the university?
(2) If such funds, even though paid to the institution by private businesses, are deemed to be “public funds” are those cash funds subject to appropriations acts of the general assembly?
(3) May an employee listed in Section 6-63-309 of the Arkansas Code receive an amount in excess of the maximum salary level established in the institution’s appropriation act plus twenty-five percent (25%) under any of the following scenarios:
(a) from cash funds of the institution, if the cash funds are paid to the institution by private companies providing food service and the campus bookstore, and the payment is salary?
(b) from cash funds of the institution, if the cash funds are paid to the institution by private companies providing food service and the campus bookstore, and the payment is a bonus?
(c) from cash funds of the institution, if the cash funds are paid to the institution by private companies providing food service and the campus bookstore, and the payment is pursuant to a “plan of deferred compensation” adopted by the board of trustees and funded with such cash funds?
Thank you for your consideration of this request. Please contact me if you have any questions.
Board of Trustees