Bonuses paid to two state directors raising their pay beyond state salary caps have caused several Iowa legislators to question whether Iowa Gov. Terry Branstad has overstepped his authority.
Courtney Kay-Decker, director of the Iowa Department of Revenue, received $800-per-pay-period housing allowance for her first year on the job, ending March 15, 2012, that totaled $20,800. The portion that fell in fiscal 2012 raised Kay-Decker’s compensation to $175,012.
The maximum salary set by law for the revenue director is $154,300.
K. Brian London was hired as Public Safety commissioner in October at an annual salary of $128,890.
“Since this salary is the top of the pay range for your position, we are approving a $16,110 recruitment bonus effective at the time of hire,” Branstad’s chief of staff Jeff Boeyink wrote London in an Oct. 8 letter The Gazette obtained through an Open Records request. “This will bring your total annual compensation to $145,000.”
Sen. Jeff Danielson, D-Cedar Falls, said Branstad shouldn’t be using bonuses to circumvent pay ranges established by the Legislature.
“If the governor is having trouble recruiting talent, the case needs to be made to the public,” Danielson said. “It doesn’t need to be done by fiat.”
Rep. Clel Baudler, R-Greenfield, agreed: “As a taxpayer in Iowa, this smells bad.”
Boeyink, who approved bonuses for Kay-Decker and London, declined an interview.
“These two highly-qualified, highly-competent individuals are being compensated at a level that reflects their extraordinary skill sets for their respective leadership positions within state government,” Branstad Spokesman Tim Albrecht said in an email.
Albrecht did not respond to a question about whether Branstad thought it was within his authority to exceed state salary ranges.
Vilsack also used bonuses
Branstad isn’t the first Iowa governor to be criticized for using bonuses to bump up directors’ pay.
Former Iowa Gov. Tom Vilsack, now serving as U.S. Secretary of Agriculture, approved bonuses and salary increases totaling $221,000 for 19 agency leaders in 2003, putting nine employees over state salary caps, according to the Associated Press.
Former Gov. Chet Culver, who led the state during the national recession, stopped the practice of giving bonuses to agency heads, said Charlie Krogmeier, who served as Culver’s chief of staff.
Vilsack and Culver are Democrats.
Relocation perks offered
Branstad has used a variety of methods for increasing directors’ compensation.
The Gazette reported in July that Kay-Decker received more than $8,000 in relocation expenses after she was hired in January 2011. This included nearly $1,700 in closing costs on a Des Moines condo – despite Kay-Decker only working part time in Des Moines and maintaining her family home in Davenport.
Paul Trombino III, the director of the Iowa Department of Transportation, received more than $30,000 in moving expenses since he was hired in May 2011.
The expenses include $16,800 in commissions to realtors who helped sell Trombino’s house in Verona, Wisconsin, $11,800 for moving and storage, $1,356 in closing costs on Trombino’s $429,000 house in Johnston, and $1,200 to cover Trombino's taxes on the relocation benefits.
State employees required to move as part of their jobs are eligible for up to $50,000 in relocation expenses under a policy updated in 2009.
A 2011 state audit suggested the Department of Administrative Services lower the maximum to 10 percent of an employee's salary -- as many other states do -- but the agency stuck with the higher level.
Twelve state employees received relocation expenses totaling $94,217 in fiscal 2012, according to administrative services. Employees from eight departments were reimbursed for expenses ranging from $1,134 to $20,000. The DOT and state universities are not included in this database.
Directors promise cost savings
Boeyink told The Gazette last summer that Kay-Decker made up for her relocation expenses by creating efficiencies at the Revenue Department. Changes include imaging, rather than printing, tax returns and eliminating nine field offices.
London also touted his experience with saving money when he was hired in October.
“I believe a more efficient department will offer a better return for Iowa’s taxpayers,” he said in a prepared statement.
London has worked in the U.S. Secret Service and Central Intelligence Agency, as well as serving as deputy chief for law enforcement at the Florida Department of Financial Services, where he was paid $119,832. London was a private security consultant in Florida before moving to Iowa.
London’s relocation expenses have not yet been completed, officials said.
Bonuses not across the board
Danny Homan, president of the American Federation of State, County and Municipal Employees Council 61, said Branstad shouldn’t be handing out bonuses to directors while asking 20,000 employees represented by AFSCME to take a two-year wage freeze.
“The people I represent don’t get bonuses,” he said.
Not all department directors received bonuses in fiscal 2012. Heads of education, public health, inspections and appeals, workforce development and human services received 4 percent salary hikes and stayed within state salary caps.
The secrecy of the bonuses was also questioned.
Baudler, who was a state trooper for 32 years before being elected to the Iowa House in 1998, said he believes good leaders are open, honest and fair.“I’m not sure what you’ve told me meets any of those criteria,” he said.