March 19, 2014 Updated: March 19, 2014 at 9:26 pm
Colorado Springs Utilities CEO Jerry Forte didn't get a $171,000 salary increase last month, but he is on track to receive $60,000 in performance incentives for "exceeding expectations" in his annual job review.
The Colorado Springs City Council, sitting as the Utilities board of directors, on Wednesday unanimously gave Forte high marks for his job performance in 2013. On a scale of 1 to 5, Forte earned a 4.02, similar to the grade he has earned in years past.
The high marks automatically qualify Forte for performance incentives built into his contract, said council member Jan Martin. The exact amount of the performance incentives still is being calculated, Martin said. But based on years past, when Forte earned a 4 out of 5, the incentive package amounted to about $60,000.
"I'm really happy with it," Forte said about his performance review. "I'm really proud of our employees and I'm proud of the work they've done this year."
Just last month the City Council debated whether to give Forte a $171,000 salary increase. The proposed increase was based on the results of an executive compensation study comparing the salaries of 42 other Utilities CEOs who run private or public companies of similar size and scope. The study showed Forte's total compensation - base salary and incentive package - was 45 percent below the market's median.
Forte, who has been Utilities CEO since 2006, has a base salary of $276,750 a year and is eligible for performance incentives each year. Based on an executive compensation study, Forte's total compensation should be $622,000 a year.
But a majority of the council did not agree with the proposed salary increase. Some council members said they would be willing to revisit the issue if the raise were lowered.
Martin said Wednesday she will bring the issue back to the council with a lower figure.
"I do think we will begin that discussion sooner rather than later," she said. "We need to discuss it. We left it hanging."
The scope of work for which the Utilities CEO is responsible is a big issue with Martin. She worries about attracting a successor for Forte when he retires.
In his 2013 performance, Forte was graded on nearly 30 job indicators.
Eighty percent of Forte's grade was based on strategic objectives such as disruption of service, natural gas emergency response time and days of cash on hand. Only in one area, debt service coverage ratio - the amount of cash available to cover annual debt - did Forte get dinged with a "fails expectations." Utilities' total debt is $2.4 billion compared to $4 billion in assets. For customers, it means that 16 percent of the utility bill goes to paying down the debt.
But in 2013, the debt service coverage ratio was lower than budgeted mainly due to a $31 million shortfall in revenue that didn't come in during this summer's drought watering restrictions.
Twenty percent of Forte's job performance grade was given based on the monitoring reports he provides to the board each month - for which he received "exceeds" or "superior" performance.
Colorado Springs Utilities has an annual budget of $1.15 billion and 1,800 employees. Forte is overseeing the construction of one of the largest public utility projects in the country, the Southern Delivery System pipeline - a $1 billion, 53-mile pipeline from Pueblo Reservoir to Colorado Springs.
Council member Don Knight praised Forte and the Utilities staff for performance during last summer's flooding event.
"There was little to almost no discharge of wastewater compared to floods a decade ago," Knight said.
In the decade that followed a 1999 storm, Utilities spent more than $200 million on the system, including building the J.D. Phillips Wastewater Treatment Plant.
"I want to commend all the work you've done in the last decade," Knight said. "That was a major, major accomplishment.