Less than five years ago, the Kansas Bioscience Authority was an agency with two employees and a nearly empty office.
Today, the organization responsible for cultivating bioscience growth in Kansas has a payroll of more than $2.3 million, 21 employees and a $10.8 million building it will move into by the end of the year.
Those are numbers that KBA vice chairman Ray Smilor likes.
“I’m not only comfortable, but I’m excited about it,” Smilor said. “Others look at us and ask, ‘My gosh, how did you do it?’”
But some are uncomfortable with the KBA’s growth and spending.
State Sen. Susan Wagle, R-Wichita, has asked for a forensic audit of the agency. She’s called the staff’s salaries, bonuses and expense reports “lavish and flagrant” in a time when the rest of the state is cutting costs.
Of the staff’s 21 employees, 12 make more than $100,000. CEO and President Tom Thornton’s base salary is $265,000, another $43,000 goes toward benefits, and in 2010 he received a $100,000 bonus. Another $106,000 worth of bonuses were given out to 12 KBA staff members in 2010.
The KBA’s spending on employees has more than doubled over the past few years. At the end of the 2007-08 fiscal year, wages and benefits were listed at $1 million.
The Senate’s Commerce Committee, of which Wagle is chairwoman, has held three hearings on the KBA’s spending. Another is scheduled for Friday.
“I’m excited about the bioscience authority. I’m excited about getting NBAF,” Wagle said. “But the money seems extremely excessive in this environment in Kansas.”
The KBA has until 2018 to spend the $581 million provided through the Economic Growth Act, legislation that was passed in 2004 to bolster biosciences in Kansas.
Since then, the KBA has had its share of successes.
The organization spearheaded the effort to land the National Bio- and Agro-Defense Facility, a $650 million federal lab that is being built in Manhattan. In 2010, Kansas was ranked fifth in the country for biotechnology.
‘Get what you pay for’
The KBA has become a national model that other states such as Missouri and Wisconsin are attempting to copy, Thornton told the committee on Friday.
In defending the agency, KBA board chairman and former Gov. John Carlin said he’d rather spend money and be successful than to do it on the cheap and lose.
“You get what you pay for,” Carlin said, noting that staff had to monitor the outcomes of the companies the KBA invested in, provide advice and help find other funding sources for start-up companies.
“We don’t just distribute money and go on to the next,” Carlin said.
Carlin pointed to six other similar companies where the CEO’s total compensation packages ranged from $332,000 to almost $600,000. However, only two of these companies had half of their employees making more than $100,000, like the KBA does.
But Carlin said the KBA was in the 75th percentile compared with the salaries of similar organizations.
“We have to pay the salaries to attract the talent and to retain the talent to get the job done,” Carlin said on Friday at the Senate hearing.
In summer 2009, the KBA hit a major growth spurt with the creation of Heartland BioVentures, which provides assistance to early-stage bioscience companies.
Today, Heartland BioVentures employs seven people, five of whom make $134,000 or more. The majority of the staff evaluates investment opportunities in start-up bioscience companies. The staff works with companies to help raise start-up money and provides technical and business advice.
Also in 2009, the KBA hired an employee to assist the Kansas University Cancer Center in its effort to gain designation as a National Cancer Institute.
Most recently, the KBA hired a marketing communications specialist to help attract companies to its Kansas Bioscience Park Venture Accelerator. Along with housing the KBA staff, the 38,700-square-foot building is set to open in October and act as an incubator for budding bioscience companies.
In the past few months, the KBA also has hired an accountant to oversee KBA projects and federal awards. Full-time legal counsel has also been added to the staff.
For Sen. Tom Holland, D-Baldwin City, who runs a small technology company, the salaries don’t look out of line. He said he pays several employees more than $200,000 a year.
“Technology, in general, costs you to deliver,” he said.