SALT LAKE CITY — Utah Gov. Gary Herbert on Thursday said his office will review a decision by the state's school trust lands administration to pay its top executives double bonuses in June, possibly skirting a legislative ban on bonus payments in the current budget year.
"It does cause significant concern," Herbert told reporters during his monthly news conference. "Particularly at time when the economy is struggling. We're talking in terms of layoffs in the private sector, in the public sector ... it's just not good form."
The School Trust Lands Administration — or SITLA — manages a checkerboard of 3.4 million acres of trust lands granted at Utah statehood. It leases and sells some of the land for development to raise money for public schools.
Earlier this year, state lawmakers eliminated ongoing funding for bonuses while drafting the budget for the 2010 fiscal year. In addition, lawmakers specifically asked SITLA to seek approval for future bonuses.
On Wednesday, it was learned that six SITLA executives were twice paid bonuses totaling $294,000 during the fiscal year that ended June 30. SITLA Director Kevin Carter's share of the compensation was $71,000.
Payroll records on Utah's transparency Web site show the payments were made in June. SITLA records, however, dispute the accounting and show payments in August 2008 and June 2009.
SITLA board chairman John Ferry said he welcomes an inquiry from Herbert's office or state lawmakers.
"We have nothing to be ashamed of," Ferry said Thursday. "I can understand at first glance, why there is a question. But don't jump to conclusions, first come and talk to the people who know what's going on."
According to Ferry, SITLA historically awards performance bonuses in the first quarter of the fiscal year for objectives met during the previous year. For example, a bonus in 2009 would typically be for work in 2008.
But when a legislative mandate barred bonus payments in 2010, SITLA's board opted to award top staff bonuses in June for the work done the same year. That allowed the board to meet its obligation to staff without running afoul of the Legislature, Ferry said.
"We had an agreement with the director and the associate directors," he said. "We agonized over what we should do and in the end, we decided we were going to stand by our word."
Ferry said the board has eliminated performance bonuses for the 2010 and 2011 budget years.
The issue of bonuses was raised Wednesday on Capitol Hill during a hearing to appoint a new person to SITLA'S board. It launched a volley of commentary from lawmakers, including House Speaker Dave Clark, R-Santa Clara, who said he was baffled by the school trust administration's decision.
"They are supposed to be managing state resources in the best interest of school children," Clark said. "To have them accelerate the payment by two months to avoid our policy direction is inexcusable."
Ferry said he believed some state lawmakers had been told about the early payments decision months ago.
"Some people say we thumbed our noses at the Legislature," he said. "We did not."
In addition to Carter's $71,000, bonus payments to other SITLA staff included: $52,360 to John Andrews, associate director and chief legal counsel; $46,660 to LaVonne Garrison, associate director of oil and gas; $43,660 to Tom Faddies, associate director of mining; $43,660 to Kim Christy, associate director of surface; and $36,660 to Doug Buchi, associate director of planning and development.
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