Lawmakers on Capitol Hill are outraged over hefty bonuses handed out to top managers of the Utah School and Institutional Trust Lands Administration — double what they get annually — given the state's tough fiscal times.
"I just find this totally inappropriate," said Senate President Michael Waddoups, R-Taylorsville. "This sort of thing gives government a black eye."
The issue was raised on the Senate floor Wednesday during a confirmation vote that included adding former lawmaker Dave Ure to the SITLA board. The independent state agency manages 3.4 million acres of trust lands for the financial benefit of Utah public schools.
Senate Majority Leader Sheldon Killpack, R-Syracuse, said the agency "tried to sneak around the process" by paying the extra money, calling that inexcusable.
Killpack told reporters after the confirmation hearing that earlier this year the agency gave out what amounted to double bonuses, $71,000 a person compared to $35,000. Six people received the bonuses, according to SITLA. "That's close to half a million dollars," he said.
But Lisa Schneider, the administration's assistant director of finance, said it is just a matter of timing.
"Both payments hit in the same fiscal year. That is why it looks so big," she said.
Schneider said revenue and performance goals are established for six top managers — the executive director, assistant director and four other division leaders. The goals are set at the beginning of each fiscal year, July, and reviewed at the end of the fiscal year, June, to see if they were met.
John Ferry, chairman of SITLA's board of trustees, said there was never any intent to sidestep the mandate by lawmakers that there be no bonuses for fiscal year 2010.
"We did not want to look like we had thumbed our noses at the Legislature and ignored them," he said.
But, he said, the top managers met their performance goals.
"The board is sensitized to the economic conditions and we agonized but felt we needed to honor them and give them that. … If we were a money loser, failing, like so many out there, it would be different. We consider ourselves a lonely bright spot in the economy because we are doing well."
Ferry said those 2009 bonuses would not have normally been awarded until sometime in fiscal year 2010 because of the lag time caused by the performance review. Early payment was broached with chairmen of the Senate and House natural resources appropriation committee. He said it received the nod.
Not so, said committee co-chairman Sen. Dennis Stowell, R-Parowan.
"We said they couldn't use any 2010 money for bonuses," Stowell said. "They never talked to me about getting two bonuses in the same fiscal year."
House Majority Leader Kevin Garn R-Layton, who said he wants an explanation from SITLA at next month's executive appropriations meeting, said it's clear double bonuses were handed out because the state's wallet is shrinking.
"We are very disappointed that it appears SITLA is gaming the system by giving their employees double the bonuses this year because there won't be any money for bonuses next year," he said.
House Speaker Dave Clark, R-Santa Clara, echoed the sentiment that the bonuses are troubling given slashes to state spending.
"Part of SITLA's budget cut was the quarter-million dollars in bonuses they get each year. To have them accelerate the payment by two months to avoid our policy direction is inexcusable," Clark said in a statement.
The bonuses also are expected to be discussed when Gov. Gary Herbert meets with the agency next week as he prepares his new state budget.
"The governor's office is aware of the concerns expressed today by legislative leadership and has discussed the matter with agency officials. The initial response we received indicates that bonuses were not improperly awarded," Herbert spokeswoman Angie Welling said. "However, it is an issue the governor will discuss in greater detail."
Schneider said that the executive bonus has been scrapped for fiscal 2010.
SITLA is an independent state agency that manages 3.4 million acres of trust lands for the financial benefit of Utah public schools and 11 other public institutions. Money generated from the lands is deposited in the state's Permanent School Fund, a perpetual endowment that annually distributes income to K-12 schoolchildren. At the end of fiscal year 2009, the fund stood at $970.5 million. The fund itself it is not tapped, but interest earnings and dividends are distributed to schools. It has an operating budget of $9.9 million and a separate budget of $10.6 million for capital projects, according to Schneider.