Former college president Dr. Bob Paxton's $400,000 severance package may put a ripple in Iowa Central's budget, but probably not until the next fiscal year.
The saving grace this year is that Paxton won't receive the last 10 months of his salary and other allowances, totaling about $170,340. Iowa Central Community College's fiscal year runs from July 1 to June 30, which means this fiscal year has just begun. Paxton will receive his first $200,000 installment in January.
Meanwhile, the hunt for a new college president is just beginning, and a starting salary and allowance package for that position hasn't yet been determined.
In January 2010, the next fiscal year, Paxton will receive his final payment of $200,000.
Paxton's severance pay will come from the general operating fund just like any other college salary, according to Chuck Peterson, assistant to the president and newly appointed liaison to the Iowa Central board. Compensation for new duties Peterson will assume has not been discussed, he said.
''Paxton won't receive the last 10 months of his salary, which lessens the impact on this year's budget,'' Peterson said. ''2010 will be a different year, and we can assume that we'll have a new president. In my experience with financial affairs, all I can say is that it will work out.''
In July, the Iowa Central board approved a three-year contract for Paxton including a $156,000 salary. Additionally, Paxton was given an annual car allowance of $13,200, was paid $27,960 for the purchase of an annuity, and was given a $7,250 expense account. He was also paid out-of-town mileage.
As part of Paxton's agreement, he will also continue to receive health care benefits for himself, his spouse and all eligible dependent children for the next 13 years. Paxton and his wife have three children. When Paxton reaches age 65, he will qualify for Medicare and will no longer receive Iowa Central benefits.
''We have a very good health plan at this college; it's something that Paxton was part of developing in 2000,'' Peterson said. The college's self-funded health insurance plan is called Iowa Central Community College Healthcare Benefit Plan.
Paxton can decline the coverage in future, Peterson said.
If he takes another position at another college, he can choose to take its health care benefits for his primary insurance. At that time, the Iowa Central insurance would become a secondary, or supplementary, insurance.
While some scoff at Paxton's agreement, Tom Chelesvig, board member said it was in the best interest of the college.
''If we didn't get a resignation from him, we would be in a position to dismiss him,'' Chelesvig said.
Since there was nothing in his contract prohibiting the conduct he displayed in the photo that caused the recent scandal, he said, Paxton could have sued the college if the board had fired him.
''It wouldn't take long to eat up a lot of money. It could have been worse,'' Chelesvig said. ''In the long run, this was the best choice. We're going to move straight ahead.''
Contact Abigail McWilliam at (515) 573-2141 or amcwilliam@messengernews.net