With top executives drawing the highest management pay in state government, officials from the Texas Department of Transportation and the Employees Retirement System told a new legislative oversight committee on Tuesday that those salaries are needed to keep pace with the private sector.
The House Select Committee on Transparency in State Operations, named by Speaker Joe Straus less than two months ago, is charged with shining “a bright light” on the operations of state government, said its co-chairman, Rep. Dan Flynn, R-Canton — although it remains unclear how the committee will make that happen.
Also appearing before the committee Tuesday was the leader of a third agency, Department of Public Safety Executive Director Steven McCraw, who endorsed the job being done by his emergency management chief, Nim Kidd, under an unusual contract that was not made public until the American-Statesman disclosed it more than two years after the fact.
“I’m the one” who picked Kidd in 2010, when Kidd was managing San Antonio’s homeland security department, McCraw told the committee. “I’m very proud of him.”
He did not dispute that Kidd’s contract, which cost the state $222,000 last year, was “a really unique arrangement,” in the words of Rep. Carol Alvarado, D-Houston. Under it, Kidd remains on San Antonio’s payroll and continues to add to his firefighter’s pension. The state reimburses the city $162,000 for Kidd’s salary and overtime and another $61,000 for the city’s share of his retirement and other benefits.
“For him to take that job at the time he would have had to forfeit 16 years” of service with the San Antonio Fire Department, McCraw said. His and Kidd’s testimony took less than 25 minutes, and committee members did not question Kidd or ask McCraw why the pay arrangement was not disclosed at the time.
But their questioning of Employees Retirement System Trustee Cheryl MacBride and Texas Transportation Commission Chairman Ted Houghton signaled concern about disparities in executive salaries and possible ways to standardize how compensation is determined. “It is all over the place,” Alvarado said.
“That’s kind of what this is all about,” Flynn said of the committee’s mission.
An American-Statesman 2012 analysis showed that executive pay at TxDOT has risen far faster — and higher — than the average salary of the agency’s 11,500 workers, and with little public awareness. Recently, the retirement system made news when the Texas Tribune revealed that its executive director, Ann Bishop, received a $162,000 bonus last year shortly before she left for a three-month stint in Gov. Rick Perry’s office. She has since returned to the agency.
Houghton told the committee that TxDOT, with an annual budget of $10 billion, should not be compared to other state agencies because it has to compete with high salaries in the private sector, and the pool of job candidates with the expertise needed to manage complex highway projects is “very thin.”
Similarly, MacBride said that Bishop is in charge of “a very large and complex agency” which has far fewer employees but manages $30 billion in investments. The ERS board felt that Bishop’s bonus was “fair,” she said, based on her leadership, the system’s overall investment performance and other benchmarks.
Coincidentally, MacBride — who is also deputy director of services at DPS — signed a recent modification to Kidd’s contract, raising the “not to exceed” amount to $268,000 per year. According to San Antonio pay records, however, Kidd’s compensation has not changed, and McCraw said it will not exceed his own, which is currently $163,560 a year.