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Utility Rate Hikes Approved; Big Raise For Utility CEO Rejected

By Scott Harrison
Published On: Feb 24 2014 07:57:43 PM CST
Updated On: Feb 25 2014 08:53:07 PM CST

Colorado Springs City Council debates, votes on two money issues Tuesday.

COLORADO SPRINGS, Colo. -

The Colorado Springs City Council voted 5-4 Tuesday against a proposal to give Jerry Forte, the chief executive officer of Colorado Springs Utilities, a $171,000 pay raise.

The vote means Forte will continue earning $276,750 annually.

Had the council approved the raise for Forte, his yearly salary would have increased to $447,000 and would have included about $51,000 in incentives, including health insurance after he retires.

Also Tuesday, the council in two separate decisions voted 7-2 to raise utility rates for Colorado Springs Utilities customers. The rate increase will take effect on March 1.

Bruce McCormick, the utility's chief energy services officer, said the increase will translate to an additional $1.70 average monthly cost for natural gas and an extra $1.38 average monthly cost for electricity.

Supporters of the raise for Forte said he is underpaid when compared with others in his position at similar utilities, and that the utility doesn't pay competitive salaries to attract the best upper-management candidates.  Supporters also emphasized that Forte did not ask for the raise and hasn't had one in seven years.   

"We have a commitment to all of our (utility) employees, all employees including our CEO, that we will work to keep their salaries at a 50 percent market level," said Councilwoman Jan Martin.  "Even with the raise, (Forte) would only be at 25 percent market level."

However, there was growing sentiment -- on the council and from the public -- that such a hefty raise was unpopular during hard economic times.

"In the finance committee we scrubbed capital projects that (cost) a lot less than ($171,000)," said Councilman Don Knight.

"(That much money) at this period of time is tough," said resident Paul Kleinschmidt.  "People out here today, many of them are struggling to make $40,000 a year."

A utility staff member said the money for Forte's raise would have come from a $5.5 million utility labor fund and wouldn't have taken money from other budget sources.

Martin said the council is open to reconsidering other forms of compensation for Forte in the future.

Utility rates also increased in January but McCormick said that increase was because of increased operational costs.  The new increases, he said, is based solely on higher fuel costs.

"That's important because 90 percent of the (utility's) energy comes from burning coal or natural gas," said Councilman Joel Miller.  "The supply in the market has gone down for two reasons -- a higher demand because of the cold weather in the northeast, and because it's harder to get gas out of the ground when it's cold."

Several council members wanted to wait a month or more before voting on the rate increases.  They said fuel costs have fluctuated so much that if they stabilize soon, a rate increase would be unnecessary.

However, the utility said waiting too long to raise rates could result in a deficit of more than $20 million.  Yet some council members were uncomfortable with a second rate hike in two months.

"I have received I don't know how many emails," said Councilwoman Helen Collins.  "People just can't afford it."

Collins and Knight voted against the rate increases.

Forte did not attend the meeting.

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