Branstad defends $128,000 in director bonuses

Governor says bonuses are better deal for taxpayers

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Iowa Gov. Terry Branstad says bonuses should reward achievement, but he’s granted bonuses in the last two years to just-hired state agency heads.

Branstad spoke for the first time Tuesday to The Gazette about why he’s approved bonuses totaling more than $128,000 for three state directors since January 2011.

“Once in a while, there is a situation where someone has done an extraordinarily good job that should be considered for a bonus,” Branstad said.

Branstad approved an $800-per-pay period housing allowance for Department of Revenue Director Courtney Kay-Decker in June 2011 that raised her first-year salary by $20,800 to $175,000. 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 – the upper limit of his salary range – but Branstad authorized a $16,110 recruitment bonus to raise London’s pay to $145,000.

Branstad said he favors awarding bonuses over raising state salary caps.

“The difference between bonus and pay is that a bonus is a one-time deal,” he said. “A pay-rate increase is permanent, so it actually costs the taxpayer more. If a state employee gets a pay raise, that is the base on which they are paid from there going forward.”

More than $90,000 in bonuses paid to Debi Durham, director of the Iowa Economic Development Authority, have extended for the first three fiscal years of her employment. She received a $30,000 bonus soon after she was hired in January 2011, followed by $30,700 retention bonus in fiscal 2012 and fiscal 2013.

"Since you are at the top of your statutory pay range ($154,300 annually) I am approving a $30,700 recruitment/retention bonus," states an Aug. 19, 2011, letter from Jeff Boeyink, Branstad's chief of staff, to Durham. "This will bring your total annual compensation to $185,000."

A similar letter, obtained by The Gazette through an Open Records request, was sent June 4, 2012, authorizing the fiscal 2013 bonus.

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Durham Letters (PDF)

Durham Letters (Text)

Branstad pointed out that he isn’t the first governor to award bonuses to agency heads.

“Previous governors have provided pretty massive bonuses,” he said. “We have not done that.”

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 did not provide bonuses to agency heads, said Charlie Krogmeier, Culver’s chief of staff.

Iowa’s public universities paid $4.4 million in employee bonuses in fiscal 2012, according to a memo prepared by the Legislative Services Agency.

The University of Iowa gave bonuses totaling $3.1 million to 989 employees. The bulk of this expense is large bonuses to administrators, athletics officials and promising physicians. A 2011 Gazette review showed the UI was scheduled to pay nearly $6.4 million in bonuses to 14 employees through 2016.

The Iowa agency with the second-highest bonuses in fiscal 2012 was Iowa State University, with $1.2 million in bonuses to 305 employees, the LSA reported.

Sen. Tom Courtney, D-Burlington, said he doesn’t like the way Branstad is skirting state salary caps to reward directors.

“If the governor wants us to pay more, why doesn’t he come to us and ask for it?” Courtney said, adding that the Government Oversight Committee should look at whether the governor overstepped his authority.

Branstad was also criticized by lawmakers for authorizing nearly $8,000 in relocation expenses for Kay-Decker 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 primary residence 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 included $16,800 in realtor commissions to sell his house in Wisconsin, $11,000 for moving services and $1,356 in closing costs on Trombino’s $429,000 house in Johnston.

“There’s a real difference between bonuses and relocation expenses,” Branstad said. “For department heads and other people in state government, there’s a law that says they are entitled to reasonable relocation expenses.”

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.

“By the way, the governor doesn’t get relocation expenses,” Branstad said. “I’ve never complained about that, but I spent a fair amount of money when I moved from Lake Mills – when I really couldn’t afford it – to Des Moines.”

Branstad was an attorney in Lake Mills and a state representative when he was elected as former Gov. Robert Ray’s lieutenant governor in 1978. He won his first term as governor in 1982 and served until 1999.

“But that’s another story,” Branstad said.

Gazette reporters James Q. Lynch and Rod Boshart contributed to this report.

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