Forgive or clawback? Virgin mayor says code violations around raises are ‘small potatoes’

The town needs to either recoup the $78,060 or forgive the pay hikes.

(Mark Eddington | The Salt Lake Tribune) The entrance sign to Virgin in Washington County, Thursday, Dec. 1, 2022.

Virgin • Mayor Jean Krause leaves little doubt about which side of the divide she stands on when it comes to forgiving or recouping the illegal pay increases the previous mayor and Town Council gave themselves between fiscal years 2018 and 2022.

Tasked by the state Auditor’s Office to either recoup the $78,060 in improper pay hikes former Mayor Matt Spendlove and council members awarded themselves or to pass an ordinance to forgive the overpayments and make the salary hikes retroactive, the current mayor and council members are leaning toward forgiveness.

State code requires cities to provide notice at least seven days before a public hearing to increase salaries and to enact increases by passing an ordinance. Former elected officials in Virgin failed on both counts.

Code and procedural violations ‘small potatoes’

Krause says she wants to fix the problem, not fixate on it – and she wants to move on.

Besides, the mayor said, she has been advised by two attorneys with the Utah League of Cities and Towns (ULCT) to pursue forgiveness because violating state code is no big deal for two reasons. First, she said the attorneys told her most Utah cities don’t follow state statutes.

“And number two, no one has ever tried to get such [overpaid] money recovered, and there is no law or case law that says we have to,” she said the attorneys told her.

Krause said she didn’t feel comfortable revealing the identities of the attorneys she spoke with without their permission. Cameron Diehl, ULCT executive director, shows no such reticence. He said one of them was attorney Todd Godfrey, a legal analyst for the league.

“He was flabbergasted at the insinuation [that he said most] cities don’t follow state law,” Diehl said. “In actuality, he can’t give legal counsel to the city about what to do. But he explained to them what the law is — notice requirements, hearing requirements and the like.”

Diehl doesn’t know who else — if anyone from the league — might have spoken to the mayor or other Virgin officials. He said the critical thing is that the town’s leaders identified a problem, are determined to fix it, and that the league exists to help them.

Important as state statutes are, there are few repercussions for violating them unless there is criminal intent, according to Utah Attorney General’s Office spokesperson Richard Piatt.

“No one … law enforcement or government agency is going to be able to go around and babysit every city council meeting and county commissioner meeting,” he said. “If citizens notice problems like this and are bothered by them, then they have got to hold public officials accountable.”

Aside from approving illegal pay hikes, town leaders have also been accused of not following Virgin’s policies and procedures manual, such as when they hiked town clerk/recorder Krystal Percival’s salary to $56,000 in September without a performance review or having a pay plan in place.

Krause said the manual was approved in the 1990s, is outdated and hasn’t been followed in years. She characterizes the pay issue as “small potatoes.”

“There are far more pressing matters than fixing an employee pay scale that has never ever been done in the history of the town,” she said.

Whether illegal pay hikes are small-potato concerns or large-fry issues, what does loom large in Councilman Paul Luwe’s view is the potential fallout from trying to recover the money from the previous mayor and former and current council members and planning commissioners.

Mayoral pay during the period in question shot up from $400 to $1,000 a month, a 150% increase. Members of the Town Council increased their monthly pay by 250%, from $100 to $350. They also more than tripled the Planning Commission chair’s pay from $85 to $325. Pay for others on the commission jumped from $60 to $250.

Luwe worries that collecting the excess cash might involve taking legal action and could cost the town more in legal expenses than it could recoup. Another concern is it could pit neighbor against neighbor and tear the town apart.

“If you sue them, that’s going to have a chilling effect on individuals who [would be] willing to volunteer and put themselves out there to serve the community,” he said.

Virgin no stranger to controversy

As troubled as the town’s present is, its past is just as turbulent. The dustup over salaries is just the latest in a long line of controversies that have cast a cloud on the town and its reputation. In 2000, for example, then-Mayor Jay Lee championed the passage of a law that required every household to have a gun, an ordinance that was later deemed unconstitutional. He also spearheaded a failed attempt to declare Virgin a United Nations-free zone.

(Mark Eddington | The Salt Lake Tribune) Jay Lee, the former mayor of the town of Virgin in Washington County, Thursday, Dec. 1, 2022.

In May 2003, Mayor Lee pleaded guilty to class A misdemeanor misuse of public money and was sentenced to 18 months probation, which included performing 50 hours of community service. In August of that year, Lee stepped down as mayor and plead no contest in 5th District Court to attempted misuse of public funds and guilty to witness tampering, which resulted in two concurrent one-year terms in jail, both of which were stayed. Judge James Shumate further ordered Lee to complete 36 months of probation.

Ten years later, Lee was back in the municipal saddle, riding a first-place election victory to a seat on the town council. Now retired, Lee recalls being the beneficiary of one of the illegal raises in 2018. He said after being assured the salary increase was legal by then-town clerk Monica Bowcutt, he plowed much of the cash into helping build a BMX track in Virgin.

Current Planning Commissioner Sean Amodt, Lee’s son-in-law, said he took every salary increase he received during the previous administration and spread the wealth through service to others.

“I’d fix up people’s bathrooms, or I’d buy stuff for people around town, old widows and stuff like that,” he said.

While the raises were improper, Lee and Amodt say they were due to procedural errors, not corruption. If they had a vote at the Dec. 19 meeting, they would cast it in favor of forgiveness.

Turning the page, avoiding future mistakes

Virgin’s checkered past and the improper pay hikes may be history, but not everyone is eager to turn the page.

Virgin resident Pat Galvez opposes forgiving the overpayments. He wants elected officials to be held accountable.

“Forgiveness doesn’t seem right here,” he said. “Elected officials support the law in other cases, and they shouldn’t change their mind in this case.”

To avoid future mistakes, Luwe argues that elected officials should take advantage of the training the ULCT offers. That sounds good in theory, Krause countered, but added that she isn’t aware of any existing training that would have prevented the town’s salary missteps.

However, Luwe and Diehl say the proper procedures for salary increases and other municipal chores are outlined in the league’s powers and duties book, the first copy of which is free for elected officials who attend training and $25 for subsequent copies.

If nothing else, Diehl added, Virgin’s problems can be put to good use as a case study to help other cities avoid similar miscues. Krause is also anxious to avoid a repeat. “We want to make sure things are set on the right path for any future administration so they don’t make these kinds of mistakes again,” she said.