$654,000 loan, housing allowance, and three-year severance package part of Oregon county administrator’s compensation

Jackson County, Oregon (population 203,206): Jackson County taxpayers footed the bill for a $654,000 loan to County Administrator Danny Jordan for his east Medford house, granted as part of his salary package negotiated in 2009. The loan was described in a trust deed obtained by the Mail Tribune earlier this month.

Details of Jackson County Administrator Danny Jordan’s 2009 employment contract follow. His three-year contract has been granted one-year automatic extensions each year and now continues through Jan. 30, 2014.

  • Base salary: $155,043 (raised to $170,060 later that year)
  • Monthly housing allowance: $1,000
  • Monthly automobile allowance: $649
  • Monthly communications allowance (cellphone, Internet): $300, with $20 increases every other year. An additional $300 is provided every third year to replace equipment
  • Severance package: An amount equal to three years’ salary and benefits; compensation, salary and benefits owed for the remainder of the contract period; continued health insurance, car allowance and other benefits for three years
  • Loan: The administrator can have only one outstanding loan at a time with the county, but is able to have up to three separate loans during the contract period

County officials maintain the loan is legal, was properly noticed and is part of a compensation package needed to keep a highly valued employee. But they made little attempt to let the public know about it. The agenda item describing the commissioners’ vote on the loan for their March 26, 2009, meeting did not mention Jordan’s name. The item read, “Order Authorizing the Chair of the Jackson County Board of Commissioners to execute an agreement and lender’s escrow instructions with employee, #66-09.” The number refers to the board order. County Commissioner John Rachor, who was elected to the board in 2010, said the notice reflects a lack of transparency in government that he would like to improve.

Jordan bought the 2,734-square-foot, two-story house in 2005 for $545,000 under a different loan, but he added upgrades such as a pool and spa that increased its value. The county loan amount was based on the dollar value of the property from an appraisal requested by Jordan and conducted by Lang V. Nguyen Appraisal Management and Consulting Inc. in 2009. County Assessor’s Office estimates of the real market value show the property peaked in 2007 at $650,060, but by 2009 had dropped to $472,060. The most recent information from the Assessor’s Office lists the real market value of the property at $369,670, or 56.5 percent of the amount the county loaned to Jordan.

The 30-year loan was financed at a 3.46 percent interest rate, the federal interest rate in 2009. Average home loan rates at the time were 5 percent. The difference shaved nearly $600 off Jordan’s monthly payment, which is $2,922.

The balance remaining on the loan is $621,000. Jordan also receives a monthly $1,000 housing allowance as part of his employment contract.

The loan is described in the county’s Comprehensive Annual Financial Report as a receivable on the Statement of Net Assets under Note 16, “related party.” (For a copy of the report, go to www.mailtribune.com/financial-report.) It is not until pages later, when the notes are described in more detail, that the loan and interest rate are outlined.

In July 2009, four months after the loan was approved, the commissioners gave Jordan a 10 percent raise, bringing his salary to $170,060.

Commissioner C.W. Smith, who has been on the board since 2004, said the county approved Jordan’s loan to increase his compensation package during a time when he was being courted by other organizations. When asked about the board order’s vague wording, Smith said the county doesn’t like to broadcast an employee’s salary compensation. Smith said the loan wasn’t a secret, but acknowledged it would generate heat from the public no matter how it was handled.

The county routinely invests millions of dollars, gathering interest on its investments until the money needs to be spent. Unlike those investments, the money from Jordan’s loan can’t be tapped into as readily.

Cara Fischer, deputy director of the Association of Oregon Counties, said executive compensation that includes house loans is a fairly common practice in the corporate world, but not necessarily in local governments. Fischer didn’t rule out the possibility the practice could become more common in Oregon, particularly if executive salaries fall below those in other states. Read more at the Mail Tribune.

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