Louisville Water execs get 5-figure bonuses

Louisville Water top executives are all getting five-figure bonuses, the equivalent of 7.5 percent of their pay — rewards for meeting company goals in 2014.

Dollar amounts range from $10,621 for vice president and chief engineer Spencer Bruce, to $18,730 for James Brammell, the president and chief executive officer.

Other directors, managers and supervisors will be cashing smaller bonus checks, between 1.9 percent and 5.6 percent of their salaries, while rank-and-file nonunion company workers will see an extra $500 in their paychecks.

A list of the top bonuses appears at the bottom of this story

Nonunion workers will also be eligible for up to 3 percent pay raise this year, based on their individual performances, the Louisville Board of Water Works recently decided.

"It's critical that this is a well-run organization, and that employees are well compensated," said Creighton Mershon, chairman of the water board. "All in all, it was a very good performance and a very good year."

The bonus bucks and pay raise caps were approved by unanimous voice votes.

The city-owned company's union employees are under a contract that gives them a 2 percent raise this year, the final year of a five-year contract, plus annual lump sum payments of $2,800.

Water board members praised the company's leadership for exceeding the company's annual dividend to Louisville Metro government by $381,000. They praised leadership and staff for delivering outstanding water quality, even as a chemical spill from West Virginia reached Louisville, managing the challenges of extremely cold weather and improving safety.

Ellen Hesen, Louisville Mayor Greg Fischer's chief of staff, questioned "from an equity standpoint" the 3 percent raises for water company staff, saying metro employees have gone some recent years with no raises. She said they are looking at possible 2 percent raises in the coming year.

She was representing the mayor, who is an ex-officio member of the board.

She reminded board members that water company funds are "still ratepayer-taxpayer dollars."

The nonunion water company staff have been able to earn up to 3 percent in recent years, company officials said.

Brammell argued for the 3 percent cap. "I don't want to send a message that will be a hit on negative morale," he said.

Those raises are not guaranteed, said Kelley Dearing Smith, company spokeswoman. They need to be earned, she added.

The Courier-Journal in October reported that the water company had brought back its bonus program following lean years of economic recession.

Records made available then showed it had paid out nearly $1 million in such bonuses over the previous three years, after holding them back due to the financial crisis of 2008. The extra payments in 2012, 2013 and 2014 to three categories of employees also came as the utility has struggled with declining water consumption and sales, and as customers' rates have continued to increase faster than inflation.

Top-tier executives and directors were eligible for bonuses in 2014 but did not get them because the company did not meet its dividend goal in 2013, according to water company records.

The company pays an annual dividend to the city of about $20 million.

In November, the board approved a 2015 budget that for the second straight year provides for a roughly 3.5 percent increase in rates, effective Jan. 1.

The city owns 100 percent of the stock in the water company, and its board members are appointed by Fischer, who has urged rate increases to stay below 4 percent.

While bonuses are not common in government agencies funded by taxpayers, the newspaper reported that such performance-based compensation is more common for businesses, including publicly owned utilities.

This year's bonuses will cost the company about $440,000.

They might have been higher had management met a key goal for Fischer's One Water initiative, the merger of some functions of the water company and the Metropolitan Sewer District. The hiring of a transition coordinator missed a deadline.

Brammell said the deadline may not have been realistic. "What this reflects is that we were just getting started." But he added, "we will live with the results."

One outgoing vice president of finance, Amber Halloran, will receive a $11,507 bonus. Brammell told company employees in January that Halloran was leaving to "explore new opportunities for her career and personal life," effective Tuesday.

Brammell is to receive his bonus, despite legal troubles in 2014 that caused the board to suspend his company car allowance, and put other restrictions on him.

Oldham County police pulled over Brammell in August, claiming he was driving 96 miles per hour in a 60 mph work zone in La Grange before noon Aug. 23. Police said his breath alcohol level registered more than twice the legal limit, and Brammell said at the time he would take responsibility.

In February, an attorney for Brammell asked an Oldham County judge to throw out the results from the breathalyzer, arguing they were "not scientifically reliable."

That question was still under judicial review late last week, court officials said.

The bonuses, Smith said, are based on corporate performance and the achievement of "shared goals, of which the of which the president/CEO is included."

Reach reporter James Bruggers at 502-582-4645 or on Twitter @jbruggers.

Top bonuses:

•James Brammell, CEO: $18,730.

•Spencer Bruce, VP chief engineer: $10,621.

•Ed Chestnut: VP Information Technology: $11,284.

•Barbara Dickens, VP General Counsel: $13,488.

•Amber Halloran, VP Finance: $11,507.

•Dave Vogel, VP Customer Service: $12,668.