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Handsome bonuses awarded to the top four officials of the Unified Fire Authority (UFA) have triggered an audit by the Office of State Auditor John Dougall.
The latest round of "incentives" $34,000 each to Fire Chief Michael Jensen, Deputy Chief Gaylord Scott, legal counsel Karl Hendrickson and former Chief Financial Officer Shirley Perkins have caused a stir in the ranks of firefighters as well as board members.
On Wednesday, Audit Director Van Christensen sent a letter to UFA Board Chairman Sheldon Stewart, a Riverton City councilman, stating that an examination of financials will be forthcoming in order to investigate allegations of improper compensation and misuse of public funds.
The auditor requested from UFA all credit card statements from January 2012 through July 2016, fuel card statements from the same period, and W-2 income tax forms, UFA board minutes and electronic records.
"It doesn't look good, and it doesn't smell good," said Midvale Mayor JoAnn Seghini, who sits on the board. "A lot of people have asked questions and said it's not fair."
Nonetheless, Seghini and other board members said it doesn't appear that any laws were broken.
However, Cottonwood Heights Mayor Kelvyn Cullimore, also a UFA board member, said outside legal counsel looked at the matter and found that the bonus recipients had violated their contracts that spell out that they are prohibited from getting paid more than their official salaries and benefits.
He welcomed the audit. "I'm glad they're doing it," Cullimore said. "It's been a long time coming."
For the time being, no further bonuses will be paid, according to board chairman Stewart.
The financial incentives were for additional work by UFA's top administrators, who had taken on the responsibility of funding and building new fire stations within the United Fire Service Area (UFSA), which is distinct from UFA.
The UFA is comprised of four cities Alta, Cottonwood Heights, Draper and Holladay as well as unincorporated Salt Lake County and UFSA, often referred to simply as "the district."
The UFSA is a taxing district made up of five municipalities Eagle Mountain, Herriman, Midvale, Riverton and Taylorsville that levy property taxes to build fire stations operated by UFA.
The bonuses, or incentives, were paid from UFSA district tax monies.
Alta Mayor Tom Pollard, who sits on the UFA board, said smaller bonuses have been paid out for several years but continued to grow. "When it hit a certain level [$34,000], people said, 'Wait, what's this?' "
The bonuses were first reported by Salt Lake City Weekly.
Salt Lake County also pays out incentives to employees, but far smaller amounts. The highest of them $6,500 went to Amy McCormick, county fiscal manager, during the last budget year. Many other county employees have received bonuses of as little as $20 and $40. Fifteen county employees received bonuses above $2,000 last year.
The UFA board has now created a new policy that will make future incentive payments more transparent, Pollard said.
There are two sides to the argument, Pollard said: As part of their job at UFA, the executives shouldn't get any additional compensation. On the other hand, if the district (UFSA) had to hire people to get bonding and architects and contractors, it would cost a lot more.
"I don't think anybody did anything wrong," he said. "It just needs to be more transparent going forward."
Chief Jensen, who also sits on the County Council, said Wednesday he welcomes an audit.
"We've had great audits in the past," he said. "We will comply and help the state auditor."
He added that it's unfortunate the fire authority has to go through the tumult. The UFA board was aware of the added incentives since they began in 2008, Jensen said.
For the most recent fiscal year, Jensen received a salary and benefits package from UFA of $225,287. His total compensation for serving on the County Council last year is equivalent to $51,000. With the $34,000 in bonuses, his total compensation package was $310, 287.
"I get that some people don't know about it," the chief said of the incentives. "I think we all wish it had been structured differently."
Cullimore said the bonuses were not transparent, that's the problem."
The bonuses were found nowhere in the district's budget, Cullimore said. "If they were trying to be aboveboard, why wouldn't they put it in a line item in their budget?"