SALEM — Pay for the director and other managers of Oregon’s travel bureau is among the highest of any state agency, even though Travel Oregon’s top brass oversee a much smaller staff and budget.

Since 2012, managers’ salaries ballooned by 76 percent, according to a state audit released Thursday morning.

As of June, the state paid CEO Todd Davidson $381,624 including a car and cellphone allowance, up 129 percent from approximately $167,000 a decade ago. The Oregon Tourism Commission has since given Davidson a 3 percent raise, auditors wrote.

By comparison, Department of Human Services Director Fariborz Pakseresht, who leads Oregon’s largest state agency with roughly 8,600 employees, was paid $200,388 as of June. Travel Oregon employs 60 people.

This and other findings of the audit 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. The tax hike is 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.

Read the audit here.

As The Oregonian/OregonLive reported last week, Travel Oregon’s budget has surged more than 50 percent to $39.3 million annually and its payroll has also grown since lawmakers nearly doubled the statewide tourism lodging tax that largely funds the funds the agency in 2016. The 33 percent increase in payroll occurred despite Travel Oregon’s assurance to the Legislature in 2016 that the influx of tax money would result in more distribution to tourism programs but “is not anticipated to increase the administrative staffing of the commission,” auditors pointed out.

Davidson’s salary increases also accelerated since 2016. The current 1.8 percent tax is going to drop to 1.5 percent in July 2021, unless lawmakers make it permanent by passing House Bill 4047.

The only state government employee with a salary higher than Davidson’s in June was the chief investment officer, who oversees a more than $100 billion investment portfolio.

Travel Oregon managers told auditors that they based the salaries on an analysis of comparable salaries commissioned in 2016.

But when auditors asked to see details of that study, Travel Oregon managers were unable to supply details and could not even locate evidence of a contract with the compensation consultant. As a result, “we were unable to independently verify the basis for the increase in the CEO’s and management’s compensation,” auditors wrote.

As a semi-independent agency, Travel Oregon is not subject to state personnel rules, auditors wrote. However, its employees still do receive the same pensions and other generous retirement benefits as other state employees. The nine-member tourism commission, whose members are appointed by Gov. Kate Brown and confirmed by the state Senate, oversees Travel Oregon’s budget and the CEO’s performance and compensation. The chair is Scott Youngblood, general manager of the hotel management company Aimbridge Hospitality according to his LinkedIn profile, and the vice chair is Nigel Francisco, CFO of King Estate Winery.

Top Democrats who oversee the budget are suspicious of Travel Oregon since they are not privy to all of the semi-independent agency’s financial decisions. As auditors noted, “Travel Oregon’s budget does not receive the same type of scrutiny by the Legislature as other state agency budgets.”

Key Democrats were also thrown off by supporters suggesting the tourism tax increase would help the Eugene games, while at the same time pointing out that the tourism commission — not lawmakers — would decide whether to spend the tax dollars on the track and field championships. This is similar to 2016, when lawmakers were also asked to sign off on a statewide tourism tax increase with the implicit understanding that in the short-term a large chunk of the money might pay for the world track championships.

Additionally, Rep. Alissa Keny-Guyer, D-Portland, is skeptical of spending more to promote tourism without setting aside money for rental assistance to help people priced out by the proliferation of short-term rentals.

State auditors recommended that Travel Oregon do a better job of maintaining the records it uses to justify employee compensation decisions and sharing information about their pay with the Legislature.

“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,” auditors wrote.

Auditors also suggested that Travel Oregon improve its management of contracts, since the agency did not consistently enforce contract terms and in a couple instances paid invoices for work before a contract was in place.

They also pointed out the agency’s largest advertising contract had not been competitively bid since 2010 and suggested the agency use competitive bidding more often. Travel Oregon, which does not have to use a competitive bidding process since it is exempt from state contracting rules, paid Wieden+Kennedy $24.5 million since 2013, auditors found. As auditors were wrapping up their work, Travel Oregon published the bid for contract on Jan. 2.

Travel Oregon’s CEO, Davidson, agreed with all of the auditors’ recommendations. He pointed out the agency is subject to the state’s public records, ethics and meetings laws, including laws that apply to the adoption of government budgets.

“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,” Davidson 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.”

— Hillary Borrud | hborrud@oregonian.com | 503-294-4034 | @hborrud

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