FSEDI chief’s salary tops in the area

Published 9:24 am Saturday, March 13, 2010

FRANKLIN—The leader of Franklin Southampton Economic Development Inc. is Western Tidewater’s highest-paid economic developer and makes more than all top government officials in the two localities he serves.

John Smolak, president and chief executive officer of FSEDI, was paid $138,449 during fiscal 2009, which ended June 30. He received an additional $4,392 in payments toward his Individual Retirement Account, or IRA.

Economic development directors in Suffolk and Isle of Wight County each make less than $100,000 per year.

Smolak’s salary was $125,000 when he was hired to lead FSEDI in 2005.

“This salary level was developed by a national search firm who surveyed other similar-size economic development organizations serving multiple jurisdictions,” Smolak said in a written statement in February.

During a subsequent interview, Smolak said the pay range for the job had been set at between $120,000 and $130,000 before he was selected to lead FSEDI upon its creation in 2005.

“I didn’t have anything to do with it,” Smolak said. “I didn’t come in and demand, ‘This is what I’m worth.’ That’s what (the job) was advertised for. It was a public forum. The (salary) was vetted out in public.”

The City of Franklin and Southampton County have each contributed $150,000 a year to the organization as part of an initial five-year agreement. Two additional stakeholders, the Camp Foundations and Franklin-Southampton Charities, contribute the rest of FSEDI’s $700,000 annual budget.

Franklin Mayor Jim Councill said Smolak’s salary is a curiosity, but he believes the investment is worth it.

“It’s interesting that his salary is higher than anybody else’s, but you price it out by what the demand is when you go hire somebody,” Councill said Friday. “I think the (FSEDI Board of Directors) looked very carefully when they brought him on. He came with a great deal of experience from other places, and I think he’s earning his keep. It’s a big salary, but you have to pay to get the people you want.”

Benny Burgess, who represents Ward 2 on the City Council, said he’s more interested in results than in what Smolak is paid.

“While it does concern me, the pay is not what I go by,” Burgess said Friday. “I look at the success. I don’t think anybody would be writing a story right now or talking about (FSEDI) if we had had more success in the past. There’s concern in how successful they have been. Whatever the pay is, you really have to look at the success, and that’s what we’re going to judge on, not on the pay.”

Franklin businessman Jim Hart, owner of RE/MAX Now and Hart Construction Co., said Smolak’s compensation should translate into job creation.

“I don’t know what kind of accomplishments he has had, but I would certainly think that he would have to measure up with his accomplishments to justify that kind of a salary,” Hart said Friday. “You can’t hire someone to do a job and pay them more than it’s worth.”

Other FSEDI employees

FSEDI has four other employees.

Tommy Miller serves as business development manager, while Nancy Parrish is the small business development manager and manages the Franklin Business Incubator.

Becky Felts and Brenda Pope are the administrative assistant and receptionist, respectively.

Although Smolak freely disclosed his own salary, he said the five-member Board of Directors which governs FSEDI declined to reveal other staffers’ compensation.

“FSEDI is a 501(c)(3) private nonprofit corporation and is not a public body,” Smolak wrote in a statement that he said was approved by the Board of Directors. “The majority of funding comes from private foundation sources, however we do receive public resources as well.”

Total staff salaries in fiscal 2009 were $308,096, Smolak said.

The FSEDI Board of Directors is composed of Chairman E. Warren Beale, Vice Chairman William “Bill” Peak, Treasurer Harriet Bain Duck, Secretary Felicia Blow and C. Harrell Turner.

Top local government, school salaries

Smolak’s salary exceeds compensation for top government leaders in Franklin and Southampton County.

According to both the county’s budget and the school division’s central office, Southampton Public Schools Superintendent Charles Turner’s salary for fiscal 2010 is $128,544.

Commonwealth’s Attorney Eric Cooke received the highest direct salary appropriation, $115,660, from the county for the current fiscal year. After Cooke, the next highest salary is that of County Clerk Rick Francis, who is paid $104,319.

Sheriff Vernie Francis Jr., County Administrator Michael Johnson and County Finance Director Julia Williams round out the top county salaries at $99,093, $97,391 and $96,494, respectively.

In the City of Franklin, school Superintendent Dr. Michelle Rich Belle is the highest paid public official with an annual salary of  $98,000. City Attorney Taylor Williams is paid $96,900, Police Chief Phillip Hardison receives $88,700 and Franklin Fire & Rescue Chief Vince Holt makes $83,184.

Other economic development salaries

According to City of Suffolk spokeswoman Debbie George, the city’s director of economic development, Kevin Hughes, is paid an annual salary of $93,000.

The city’s operating and capital budget for 2010 indicates that $1,041,155 was allocated for economic development in the city, which has a population of more than 80,000 people. That’s about 33 percent more than the budget for FSEDI, which serves localities with a combined population of less than 30,000.

Hughes was appointed interim director after Cynthia Cave was forced to resign in May 2009 and was officially awarded the post in February.

Cave served as community and economic development director for Southampton County before the inception of FSEDI.

According to the Isle of Wight County Human Resources Department, Department of Economic Development Director Lisa Perry is paid an annual salary of $87,890. The county’s adopted general operating and capital budget for fiscal 2010 reports that Perry’s department was allocated $381,173. Isle of Wight has a population of about 35,000.

“I think you need to compare what others are paying,” Councill said. “I think to date we probably haven’t had the success we would like to have, but no municipality has — except maybe for Hampton and a few places in Chesapeake. People will take exception with the success of the economic development office over the years, but if you look around it’s been a bad time for everybody.”

Hart questioned FSEDI’s comparatively higher compensation.

“I would think that it would be difficult to defend why (Smolak) is making more than someone in Isle of Wight or Suffolk,” Hart said. “Suffolk is covering a much larger geographical area than Southampton and Franklin, and there’s certainly more going on in Isle of Wight.”

Hart said the approaching expiration of the initial five-year funding agreement for FSEDI makes a review of the entity timely.

“Is the program working?” Hart asked. “Can we better spend that money on our schools, our police and our fire departments? That would make our area more attractive for growth. I think we need to re-examine the whole economic development department and see how profitable that has been, what kind of bang for the buck have gotten. If it doesn’t justify it, then I think now is the time that we need to look at either changing it or stopping it.”

Hart added, “This may be the very time that we need economic development, with International Paper going down. (But) if it’s not paying out, then we need to keep all the money we can close in the coffers so we can spend it without raising taxes.”