Utilities pays $9.2 million in employee bonuses

Colorado Springs Utilities paid $9.2 million in employee bonuses Friday, the last for the pay-for-performance program.

The program is ending this year, at the direction of Colorado Springs City Council. The total amount paid was $353,344 less than last year.

Utilities employees' base pay was lowered when the program began in 1997, so officials don't call the pay-for-performance payouts a bonus. Friday's average payout was $5,318, $213 less than in 2008, which Utilities spokesman Dave Grossman attributed to changes in the evaluation process that created higher standards.

Utilities officials said 1,735 employees received payouts, 95 weren't eligible and 131 left the agency and did not receive payments.

Click here for the Top 10 Utilities' bonuses.

The payouts come as Utilities is eliminating positions - 200 since 2006 - and cutting costs to deal with a budget shortfall.

Also, on Feb. 1, Utilities raised residential water rates 41 percent, electricity rates 8.7 percent and wastewater rates 14.3 percent. Utilities officials said the hikes were needed because the housing slowdown has reduced the fees it collects to hook up new houses, which long subsidized the water system. Officials also cited the need to build projects, including the proposed $1.1 billion Southern Delivery System pipeline, and work needed on the electrical system.

The Colorado Springs City Council, which oversees the city-owned utility, removed 2.9 percent raises for Utilities employees from the 2009 budget, and some wanted Utilities to forego the bonuses. The rest of city government has been hit hard by the recession, resulting in 204 eliminated positions and no pay raises for city employees in 2009.

But the money was kept in the budget, after council members said Utilities is legally required to pay it.
"I don't think we had a choice. The employees had already done the work so it's our obligation to pay them," Councilman Randy Purvis said Monday.

Employees are paid based on individual evaluations, tied to performance plans set in advance. The highest amount paid out in the life of the program was $12.6 million in 2006. Officials changed the program after that year, removing the overall performance of Utilities as a factor in determining bonuses.

The highest bonus for 2008 went to Utilities CEO Jerry Forte, who received $24,908, on top of his base salary of $276,750. The bonus was $3,600 less than he got last year.

But Forte won't keep the money. He and several other top officers are donating their bonuses to charities. Forte donated his to Project COPE, a Utilities program that assists residents with paying their utility bills.

"I felt that the least I could do is give my net amount of my bonus to help Project Cope," Forte said Monday. "Maybe we can help some people who can't pay their bills right now."

Officials haven't determined how employees will be compensated without the bonus program. Purvis said the council will get a report on new compensation possibilities in June.

Councilman Tom Gallagher said he is glad to see the bonus program gone, and said Utilities employees should shoulder the same burden as other city employees.

"It's not a separate entity. It is an asset owned by the citizen rate-payers of the community," he said.

Purvis, though, said Utilities is dealing with major cuts.

"Utilities has been reduced by several hundred positions over the past several years anyhow, so utility payroll is being cut as well," Purvis said.