A proposed raise for a Colorado Springs Utilities executive is not going to happen.
The raise was for Springs Utility CEO Jerry Forte; it would have bumped his salary up to $498,000--a nearly $160,000 raise.
The proposal happened to be on the same agenda as an increase in gas and electric rates, costing the average user around an extra $27 a year.
"The people just look at it like we're raising your rates, but you're giving the utilities director a pay increase. It was a massive pay increase. I realized that I had some utility employee input, that there are other members who could step up to the plate," said Council member Helen Collins, who voted against the raise.
Supporters of the pay increase said it was important to keep the salary competitive to attract qualified replacements once the current CEO retires.
A compensation study compared Forte's salary to 42 similar-sized utility companies around the country.
The study claimed that the $498,000 proposed salary was still 25 percent below market level.
"Our CEO's total compensation today is $336,000, and the average total compensation for all the other CEOs is $622,000," said Council member Jan Martin, who voted for the raise.
Even though Forte will not be getting that raise, citizens will still be paying more for utilities every month starting March 1.
Natural gas will increase $0.0134 per hundred cubic feet, increasing the typical residential natural gas bill by 3.6 percent. That's around $1.70 more per month.
Natural gas bills for typical commercial and industrial customers would rise by about 5 percent.
Electricity costs will increase by $0.0023 per kilowatt hour, increasing the typical residential electric bill by 2 percent. That's about $1.38 per month.
Electric bills for typical commercial and industrial customers would increase by about 3 percent.
Utility officials say the cold winter nationwide pushed up natural gas prices, due to the increase in demand. Due to this, officials say the rate increase is necessary. But even with rates at these levels, officials say natural gas rates will be 18.5 percent below its rate two years ago. Electricity rates are 8.7 percent below the rate two years ago.
The number may shock you. A proposed salary for the CEO of our local utility company is near half a million dollars.
Jerry Forte is the current CEO of Colorado Springs Utilities. Right now he makes a base salary of $336,252 a year. During the Colorado Springs City Council work session on Monday, council members proposed to bump his salary up to $498,000 a year.
They say that number is based on a study of similar sized companies. Council member, Jan Martin says Forte is eligible to retire right now. She says they fear if they do not bump up his salary he will leave.
“I know it's hard to understand the dollar amount, it seems huge to us. But just like you're measured in your market, we measure our employees in the market place. This is the standard. This is the 50th percentile for companies of similar size," Martin said. "Perception is reality. That's true within all organizations. I can honestly say that I believe this is a good business decision for the organization. The continuity of leadership can't be stressed enough."
Council members say funding for the CEO’s salary will come from utility customers. But the recent proposed utility rate increase has nothing to do with his salary, it's to adjust to the cost of gas.
Springs council members will vote on Forte's proposed salary on Tuesday.
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