Utah lawmaker says lucrative severance deal for outgoing UTA chief is ‘improper,’ seeks to block it if he can

(Steve Griffin | The Salt Lake Tribune) Rep. Mike Schultz, R-Hooper on the floor of the House of Representatives at the State Capitol in Salt Lake City Friday February 2, 2018.

Rep. Mike Schultz — who helped enact a new law to restructure the Utah Transit Authority — says he believes that outgoing UTA President and CEO Jerry Benson is improperly receiving a big severance package. It is worth perhaps $282,000.

So Schultz has asked legislative attorneys to review the situation. The Utah Attorney General’s Office also says it is looking into it.

“I’d like more than anything to stop that severance package,” Schultz, R-Hooper, said Thursday. He acknowledged, though, that he is unsure if it is legally possible now to block the payout. “But it is improper.”

Meanwhile, UTA has said Benson is receiving what was required by contract when he became UTA president in 2016 — and that it is not the result of any subterfuge.

Last month, the UTA Board announced it is terminating Benson effective Monday. It contended that a new law, Senate Bill 136, which takes effect on Tuesday, requires such action because it eliminates Benson’s current position as president and CEO.

Trent Nelson | The Salt Lake Tribune Jerry Benson smiles after being sworn in as the new president/CEO of the Utah Transit Authority (UTA), Wednesday August 31, 2016.

But Schultz, the House sponsor of SB136, and Sen. Wayne Harper, overall sponsor of the bill, disagree strongly. They said the bill allows hiring an interim executive director with roughly the same duties for several months until a permanent chief is selected.

That permanent hire will be made eventually by a new full-time, three-member commission that must be appointed by Gov. Gary Herbert by Nov. 1 to replace the agency’s current 16-member, part-time board to provide better oversight at the scandal-tainted agency.

Schultz said he anticipated that Benson would continue working for months as interim director. He said he figures the board terminated him instead as a favor to ensure that he clearly could obtain his big severance package.

Schultz said Thursday that he believes based on his research that if Benson “quits or resigns, there is no severance package. The only way there is a severance package is if he is terminated without cause.”

The UTA provided the Tribune with a copy of Benson’s contract.

It does clearly say that if he is terminated without cause — including the elimination of his position or for lack of funding — he is entitled to a severance payment equal to nine months of his salary and insurance benefits.

Utah’s transparency website said Benson received $376,000 in compensation for the full year in 2017 — $238,169 in wages, $35,812 in paid leave and $102,023 in benefits. Nine months of that would total about $282,000.

The contract also clearly says that Benson would receive no severance if he died, became disabled or was terminated “with cause” for such things as malfeasance, gross negligence or conviction of a felony.

It does not appear to say clearly what happens in case of retirement or quitting.

The Utah Attorney General’s Office is reviewing Benson’s contract and severance deals for some other top UTA officials, said Mark Burns, director of its division of highways and utilities.

“I’ve looked at Mr. Benson’s contract, and his contract clearly has a clause that is triggered in a no-cause termination situation. That’s about as far as I am comfortable going at this point,” Burns said.

“We’re going to be looking at severance issues as part of these transition discussions” as SB136 makes changes to the agency, Burns said, including making it now rely on the Attorney General’s Office for legal representation.

While part of the new law requires UTA to transition to the A.G.’s office for legal work by July 2019, Burns said other portions are written in ways that appear to require his office to start representation of UTA next week when the bill takes effect — and it is doing so.

For that reason, he said, current UTA General Counsel Jayme Blakesley has also resigned effective just before the bill takes effect.

Schultz said he is concerned that the UTA called a special meeting last month where Benson was terminated — but where that item was not clearly listed on the agenda, merely a mention of a potential closed-door session to discuss employment issues.

He contends that board members were improperly told the law requires firing Benson, and then had less than an hour to ask questions and make an expensive decision without all the facts.

“This is exactly the sort of stuff we’re trying to stop” with reorganization of the agency, Schultz said. “I’m not aware of any other public agency in the state that gives big severance packages. It’s not right.”

UTA last month provided The Tribune a written statement about that meeting and the termination decision. It said Benson had to be fired because the new law eliminated his position, and said the new interim executive director position has duties quite different from Benson’s current job (which Schultz disputes).

“Taking all of this into consideration, the Board of Trustees and Jerry [Benson] mutually agree that this was the best course of action to clear the slate for new leadership to move the agency forward,” the statement said.

(Tribune File Photo) Surrounded by fifth and sixth-graders from Hawthorne Elementary, UTA Chief Capital Development Officer Steve Meyer speaks at the Sugar House streetcar S Line Corridor near 800 East and 2200 South, Sept. 5, 2013. The streetcar is scheduled to be running for the public on December 8.

The executive board of the UTA Board this week hired Steve Meyer, a UTA engineer who helped oversee expansion of its rail lines, to become the interim executive director beginning Tuesday. Meyer plans to retire from UTA in January.