Audit calls out Travel Oregon exec salaries; contracting procedures

By TED TAYLOR
CENTRAL OREGON DAILY

Oregon’s tourism and marketing agency needs to strengthen controls over contracting procedures and be more transparent and accountable about compensating its managers, according to an audit released Thursday by the Secretary of State’s office.

“Travel Oregon should improve its transparency and accountability in how it spends taxpayer money,” said Secretary of State Bev Clarno. “Travel Oregon receives funding courtesy of the lodging tax, which is paid by taxpayers in Oregon and visitors alike.”

According to a press release from Clarno’s office, the audit points out Travel Oregon’s managers are among the highest paid managers in state government but the agency could not provide documentation “to support the decisions that led to these high levels of compensation.”

Travel Oregon management compensation has increased about 76% since 2012 while similar positions at state agencies increased about 16%, the report said. CEO Todd Davidson’s monthly gross salary was $31,802, which includes a monthly auto and cell phone allowance of $1,798. This represents about a 129% increase in the CEO’s annual salary since 2009.

“Although not comparable in terms of position responsibilities,” Davidson’s salary is higher than the directors of the state’s Health Authority, Dept. of Human Services, State Lottery, Dept. of Transportation and the Dept. of Business Development while managing a significantly smaller staff and budget, according to the report.

‘In fact, the only state government salary exceeding Travel Oregon CEO’s compensation is that of the Chief Investment Officer for the State of Oregon, who oversees an investment portfolio of about $81 billion,” the report said.

The report said  both Travel Oregon and its oversight commission have the authority to determine salary and compensation for the work of the CEO and of management.

“While the Oregon Tourism Commission has the freedom to set the CEO’s compensation and the CEO to set the employees’ compensation, the agency should take steps to ensure it is accountable to taxpayers for how it decides to compensate staff with public monies,” the report said.

Clarno’s office said the audit was important for several reasons including the fact Travel Oregon’s annual funding has tripled in the last decade from under $12 million per year to more than $38 million per year due to increases in the state lodging tax in 2016. The agency’s annual budget in the last biennium was $75.7 million.

The findings will likely raise questions for already skeptical lawmakers whom Gov. Kate Brown has asked to approve an increase in the statewide tourism tax that largely funds Travel Oregon. It’s part of Brown’s plan to secure an additional $20 million for the 2021 World Athletics Championships in Eugene, for a total of $40 million in state funding.

The audit also focused on Travel Oregon’s work with contractors, noting that the agency’s largest advertising contract had not been competitively bid since 2010.

The report acknowledged that Travel Oregon is exempt from state contracting rules, but “could benefit from utilizing the competitive bid process more frequently, much like other state agencies do. Opening more contracts to competitive bidding, especially for high-dollar contracts, has the potential to help the agency lower costs and ensure taxpayers are seeing the most benefit from the spending of public monies.”

Travel Oregon works to grow the state’s economy by attracting visitors in partnership with regional tourism marketing agencies – including Visit Bend, Visit Central Oregon – in what has become a nearly $12 billion industry that employs more than 112,000 people.

“While Travel Oregon does not receive General Fund dollars from the state, it functions as a semi-independent state agency that is accountable to the citizens of Oregon who, in addition to out-of-state visitors, fund its budget through the transient lodging tax,” the audit said. “By providing more detailed budget and spending information, including compensation information by staff position, Travel Oregon can provide increased transparency and accountability to the people of Oregon and better inform the Legislature.”

In a three-page response, Davidson said the agency “agrees with all recommendations and will work to implement them.”

“The agency is committed to continuous improvement and we are grateful for the constructive conversations that took place with Audits Division staff during the audit process,” he wrote. “We are proud of our contributions to supporting local communities and growing Oregon’s economy through tourism in a way that is consistent with Oregon values. This audit provides useful information in our continuous work to improve how we deliver services and returns on investments for the regions we work with and the Oregonians we serve.”

Read the full audit on the Secretary of State website: https://sos.oregon.gov/audits/Pages/default.aspx

The Associated Press contributed to this report

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