Editor's note: This report comes from KUT's reporting partner, the Austin Monitor.
The Lower Colorado River Authority’s new general manager Phil Wilson received a hefty pay increase when he moved from the hot seat at the Texas Department of Transportation to another hot seat at the state-created water and power authority two months ago. And his pay increase could get even heftier.
Wilson’s annual base salary has been set at $425,000, according to LCRA spokeswoman Clara Tuma in an email response to questions from the Austin Monitor. In addition, Wilson could receive a bonus of up to 25 percent of his salary, Tuma indicated. Wilson’s salary and any bonus are determined by LCRA’s 15 member board of directors, which hired him late last year. He took over the job on Feb. 3.
Wilson’s annual salary at TxDOT, where he was executive director for a little more than two years, was $292,500, according to the Texas Tribune database of state government employees. At TxDOT, Wilson oversaw 12,000 employees and a $10 billion budget. At the LCRA he is responsible for roughly 1,700 employees and a budget of about $1.1 billion.
Unlike TxDOT, the LCRA board can set agency salaries without legislative control. However, LCRA officials have been quick to point out in the past that the authority considers the pay ranges of other comparable electric and water utilities when setting its salaries.
Salary initially was an issue when Wilson was named to head TxDOT in October 2011 after a three-year stint as vice president of public affairs at Luminant, the largest power generating company in Texas. At the time, members of the Texas Transportation Commission, appointed by Gov. Rick Perry, sought to have Wilson’s pay set at $381,000, well above the legislative cap of $292,500. Perry nixed the idea after it became politically controversial. Even at $292,500, Wilson’s pay was about $100,000 higher than his predecessor at TxDOT, according to news reports at the time.
Wilson’s predecessor at the LCRA, Becky Motal, had a base annual salary of $395,000 when she departed at the end of 2013 following two and a half often-troubled years as general manager. Motal also received a $30,000 bonus in 2013 before her departure and negotiated a severance deal that replaced an employment agreement she had with the LCRA, according to Tuma. As part of the severance package, Motal received payment for her base salary through the June 2015 term of the employment agreement. That amounts to nearly $600,000 in severance.
The fact that Motal received a lucrative severance deal raises the question of whether her retirement was totally voluntary. When Motal first announced her planned retirement last September, there were widespread rumors both inside and outside of the LCRA about the circumstances of her departure.
Meanwhile, Wilson has not taken long to make changes at the LCRA. In mid March he announced a reorganization designed in part to put an increased business slant on the river authority. As part of that effort, he has hired five senior executives whose base salaries will average $262,000 a year, according to Tuma’s email. Two of the positions are new ones – chief commercial officer and executive vice president of water. Like Wilson, several of the new executives will have the potential to earn significant bonuses.
The five new LCRA executives include:
- Ken Price, who moves to the LCRA from Luminant, is the chief commercial officer. His annual base pay will be $300,000 and he will be eligible for a bonus of up to 25 percent of his salary, as determined by the general manager.
- Richard Williams, who moves to the LCRA from Energy Future Holdings, the parent company of Luminant, is the chief financial officer. His annual base pay will be $280,000 and he will be eligible for a bonus of up to 10 percent of his salary, as determined by the general manager.
- John Miri, formerly chief executive officer of Bluewater Technology Services, a technology consulting firm, is the chief administrative officer. His annual base pay will be $266,000.
- Bill Lauderback, formerly with Hill+Knowlton Strategies, a global public relations firm, is executive vice president for public affairs. His annual base pay will be $250,000. He will be eligible for a bonus of up to 15 percent of his salary, as determined by the general manager.
- John Hofmann, formerly with the Brazos River Authority, is executive vice president of water. His annual base pay will be $215,000
Wilson also hired Clint Harp, formerly director of business development within Gov. Perry’s economic development division, as his special assistant. Harp will have a base pay of $110,000 a year.
Tuma said in her email, "LCRA strives to offer fair and competitive pay for all employees."
In addition to the new executives, four members of the executive team before Wilson joined LCRA also report directly to Wilson. They are Charlie Johnson, general auditor; Ross Phillips, executive vice president of transmission; John Rubottom, general counsel; and Julie Eby, executive assistant to the general manager and board of directors.
In a recent email to employees, Wilson said the management changes would build on “the incredible knowledge and skills we already have at LCRA by blending in a handful of new senior executives who will bring fresh perspectives and experience.”
When Wilson was named by the LCRA board as LCRA’s 11th general manager, supporters touted his business experience. However, others pointed out that for much of his career Wilson has been in political jobs. For example, he was Perry’s communications director in 2002 and 2003 and before that was an aide to U.S. Sen. Phil Gramm for almost a decade. Perry named him Texas Secretary of State in 2007, a position he held for one year.
Some veteran LCRA watchers acknowledge, however, that Wilson’s political experience could be a significant plus for the river authority as he tries to mend fences with LCRA customers, including wholesale electric and water customers and their constituents, who have turned against the LCRA in recent years.
For one thing, contracts covering some one third of LCRA's power sales expire in 2016 and there are already several lawsuits over the issue between the LCRA and some wholesale power customers.
At the same time, some of LCRA’s problems with customers have been related to a drought that has had a grip on the region for several years and could easily be the worst on record. The LCRA has been under fire from critics up and down the lower Colorado River. Upstream critics have complained about the low levels of Lakes Buchanan and Travis and the resulting impact on local businesses and recreation. They have blamed the LCRA for releasing too much water downstream, particularly in 2011. Downstream farmers have lamented the economic impact of LCRA cutting off most water for downstream agricultural irrigation since 2012. River protection groups have worried that lack of water flowing downstream of Austin could adversely affect the health of the river and Matagorda Bay into which it flows.
Meanwhile, the LCRA is looking to increase significantly the rates that it charges for raw water supplied for agricultural irrigation, cities and other customers to pay LCRA’s costs of managing the river. How Wilson will guide the organization through that hot-button issue this year will be a major test of his political skills, according to some observers.
In his email to employees, Wilson acknowledged the need to sharpen LCRA’s focus on customer service. As part of his vision for the agency, Wilson said he wants to “mend relationships with our customers and work together on solutions that will solve the region’s power and water challenges.”
In his first six weeks as general manager, Wilson said he met with representatives of dozens of water and power customers up and down the lower Colorado River.
“It is evident that our customers face difficult economic challenges,” he said. “It is essential that LCRA address two critical objectives: (1) we must provide competitive electric rates and (2) we must find innovative ways to pay for new supplies of water.”
Meanwhile, Senator Troy Frasier, who has been one of LCRA’s most vocal critics, continued his criticism this week. In response to proposed rate hikes, the Texas Energy Report quoted Frasier on Monday, as saying “The LCRA has not constructed a new water source since (before 1960), so there is absolutely no reason for an increase in rates to LCRA’s firm customers. It seems the LCRA is trying to cover the cost of bad business decisions made by a bloated bureaucracy.”
Editor’s note: Freelance writer Bill McCann is a former LCRA employee. He retired in 2007.