Hardin: Deferred-compensation payments should be handled differently in future

An auxiliary fund used by the Board of Trustees at the University of Central Arkansas has been used in the past to negotiate buyouts and settlements of university administrators.

However this fund was most recently dipped into to give UCA President Lu Hardin a $300,0000 deferred-compensation payment as an incentive to stay at the Conway university.

The contract for the incentive, which was initially approved during an August 2005 meeting, stated $60,000 would be set aside per year for five years to encourage Hardin to keep his position as president and then paid to him at the end of those five years. However, after a majority vote during the May 2 board meeting, the trustees decided to speed up the process and pay the president the $300,000 from the auxiliary fund two years early.

"The reasoning given for that was the dramatic increase in enrollment and increasing the foundation from $9 million to $35 million in five years," Hardin said during an interview Wednesday.

According to Jack Gillean, vice president for administration, the auxiliary fund was created and is kept up by profits from housing, food service and the book store. The contracts from Aramark, a company that provides UCA's cafeteria service, and Barnes and Noble, which serves as the campus bookstore, generate excess funds which go into that auxiliary pool of money.

Hardin specified the auxiliary fund, used for supplemental salaries, does not come out of the general revenue nor is it money granted by the state or through student tuition.

When money is taken from this particular fund and used by the Board of Trustees, Hardin said it is reimbursed by private donors and added there are three people dedicated to reimburse the most recent transaction.

Although the incentive plan's 2005 approval by the board was included in that meeting's minutes, the vote taken during executive session in May to accelerate the contract was not recorded, something Gillean said was what he understood to be a mistake or misunderstanding on the part of the board.

"The sense that I have received from talking with President Hardin is that they discussed the matter in executive session and they believed the motion they made when they came back into open session, which was to approve a list of matters discussed, was sufficient to cover those items, but this item wasn't listed on the personnel list," Gillean said.

Hardin said the act was in no way a clandestine motive by himself or the board and added matters like the deferred-compensation payment should be handled differently in future meetings.

"As president it's important that I make sure any votes that need to be taken out of the general vote that should be looked at separately are voted on separately," Hardin said.

Because the board neglected to add that vote onto its minutes, Gillean said in his opinion, the group has two options.

"There are two schools of thought and one would be to have them amend the minutes to reflect what actually occurred or simply bring the item up as a new item in the July meeting and ratify what they intended to do," Gillean said.

The next meeting of the Board of Trustees is scheduled for July 25, and Gillean said a final decision was not made by Wednesday afternoon as to what they will do.

Hardin said the decision to create an incentive contract for him was made after he told the board he had been approached by an official with an out-of-state university about interviewing for the school's president position.

"That incentive is not an essential requirement for me because I feel very blessed to be at the University of Central Arkansas," Hardin said.

(Staff writer Jessica Bauer can be reached by e-mail at jessica.bauer@thecabin.net or by phone at 505-1236. To comment on this and other stories in the Log Cabin, log on to www.thecabin.net. Send us your news at www.thecabin.net/submit)