Jerry Forte

Colorado Springs Utilities CEO Jerry Forte wants Mayor Steve Bach to reserve any more questions about the Martin Drake Power Plant for a decommissioning study.

“From both a limited staff perspective and to best honor the study initiative, it would be best if any further questions were vetted as part of the study,” Forte said Saturday in an email to the mayor.

“Adding your voice to the scope and depth of the study would be very helpful in reaching a decision that is best for and can be supported by the community at large, both today and into the future,” Forte said.

The email included answers to a long list of questions that Bach had posed to Forte about the Drake power plant and other Utilities power facilities on Dec. 17.

Bach gave Forte a Christmas Eve deadline to answer the questions. Forte told the mayor he needed more time and delivered his responses to Bach via email on Saturday.

Utilities posted the answers on its website “so that our customers can see the information and stay up to date on energy issues that are affecting the community,” spokesman Dave Grossman said Monday.

Forte told the mayor that answering his questions required “certain assumptions” for current and potential environmental regulations and risk mitigation/generation ownership practices, among others.

Jerry Forte

Mayor Steve Bach will have to wait until next year to get responses from Colorado Springs Utilities to a long list of questions about the Martin Drake Power Plant downtown.

Bach had given Utilities CEO Jerry Forte a Christmas Eve deadline to answer 18 questions about the power plant, which city officials are talking about decommissioning.

But Friday, Forte sent Bach an email stating he is working on responses but won’t be able to meet his deadline.

“Because of the number and complexity of the questions, I will not be able to complete this effort by the date you requested. I plan on having something to you during the first week in January,” Forte said in the email.

“Please let me know if you would like to meet in the interim.”

Jerry Forte

Colorado Springs Utilities CEO Jerry Forte is trying to calm his employees after a tumultuous week.

Forte sent employees an email Friday assuring them that the city-owned enterprise is a “treasure worth preserving” despite talks of selling it.

“I am confident that our organization will more than meet the demands of our time- because I know you,” Forte said in the email.

“When the facts are all researched and debated, I know that the overwhelming conclusion will be that Colorado Springs Utilities is a treasure worth preserving, because our people are a treasure,” he said.

Here is the full text of Forte’s email, which he also sent to the Utilities Board:

We certainly are living in interesting and challenging times! During periods like this, I like to fall back on what I know is true. That always helps me see the path forward with more clarity. So what do we know? We know that Colorado Springs Utilities is one of the finest four service utilities in the entire nation because our mission is grounded in the values of safety, reliability and competitiveness. Our vision to be a treasured community asset for Colorado Springs is realized because our people strive to work every day by a set of values that are much more than a sound bite or a plaque on the wall.

The recent conversations concerning the sale of Colorado Springs Utilities prompt several questions in my mind. How do you place a value on our employee’s response to the Waldo Canyon fire? How do you place a value on having some of the best customer satisfaction in the country? How do you place a value on world class reliability? What about competitive rates? How do you value record breaking volunteerism in service to our customers? How do you value employees that go the extra mile every day to serve the community they cherish and live in?  What is the value of local ownership- the ability to appeal directly to elected officials as opposed to an unelected bureaucracy in Denver, or a Board of Directors that resides in another state? If the community wants to discuss the future of a power plant, in Colorado Springs, that can take place in an open, transparent, fact-based and constructive manner. What is the value of that?

While these conversations may seem difficult, we must not shy away from them. We are proud of our track record and believe that it will stand up to any and all evaluation. We are not afraid of facts, in fact, we insist on them. What we all stand for is an open, honest, informed and transparent public conversation that allows all stakeholders a place at the table. That is what community is all about, that is what we are all about.

So how do we navigate these times and move forward? First, since we exist to serve this community, we must always keep in mind what is genuinely best for all of Colorado Springs.  Second, we need to insist on honest and balanced public conversations, seeking to understand and then to be understood, being open to new ideas. Third, and most importantly, we need to arm ourselves with the facts and get involved. We need to have many conversations with our friends and neighbors, and we need to inform them in a non-defensive manner. We need to enrich every conversation by the way we demonstrate our values, by the way we boldly stand for the truth.

I am confident that our organization will more than meet the demands of our time- because I know you. When the facts are all researched and debated, I know that the overwhelming conclusion will be that Colorado Springs Utilities is a treasure worth preserving, because our people are a treasure.

Jerry Forte

Has the time come to replace Colorado Springs Utilities CEO Jerry Forte?

That’s the question City Councilman Tim Leigh ponders today in his electronic newsletter.

“I’m still fuming over the Neumann contract with the Colorado Springs Utilities.  I can’t figure out who thought this was a good deal,” Leigh wrote.

“Who should be held to account? Is it time to consider changes in leadership?” Leigh asked.

Here is the full text of Leigh’s newsletter:

I’m still fuming over the Neumann contract with the Colorado Springs Utilities.  I can’t figure out who thought this was a good deal.

The underlying rationale for the decision is easy to understand.  [Pay less-get more.]  The ultimate business points aren’t as easily understood.

Nuemann was going to provide a robust, full-bodied technology and equipment that would clean Drake’s coal-fired power plant emissions, removing SOx, NOx, particulates and CO2 at ½ the cost of other, (readily available), solutions and we were going to receive sale commissions when he sold the elixir.  Now he’s merely brewing Neumann-Lite, a solution for SOx only with significantly less cost savings; and there are no customers.

From Neumann’s perspective – this is a sweet deal.  He gets all his costs covered plus 10%.  And there is NO cap on costs and NO date-certain for installation.  And, if we use his technology at the Nixon Power Plant, we pay him more!  His contract becomes cost plus 15%!  How wonderful it must be, to be a government contractor.  (Remember fishing when you were young?  It was always a good time – except for the fish.)

I’m not faulting Neumann for being clever enough to pull-this-off.  I’m faulting CSU’s system-of-governance and those board members specifically who were driving it when the contract was contrived.  There was no legitimate oversight then, nor is there yet.

Realize – Neumann had no buyable product – nor does he.  [He does not yet possess a proven-scalable product!]  And shame on us, because his contract clearly says “Statement of Work for Experimental Emission Control Systems”.  Furthermore, even if Neumann had a proven technology, I’ve been told he didn’t have sufficient funding available to build or install without CSU.  We’ve given Neumann a free-pass.  And if his stuff doesn’t work, we’re the schlemiel.

Legitimate questions are:

• Did the CEO and his team understand the deal?

• • Did they read the contract?
  • Can they justify the speculative risk to the ratepayers and the outrageous profit to the vendor?
  • Did the empanelled board members at the time understand the deal?
    • Did they read the contract?
    • Can they justify the speculative risk to the ratepayers and the outrageous profit to the vendor?
    • Why was a contract of this magnitude signed by a procurement manager and not the CEO?
      • Are there other, similar decisions made by these same folks that need to be re-evaluated?
      • Are there other, similar contracts that need to be re-evaluated?

• Interesting Rhetorical Questions:
  • If a leader believes Neumann-style contracts are good for the consumer, is he miscast in his role?
    • Should his overall skill-set be questioned?
    • Should his business-decision-making ability be questioned?
• What other decisions have been made by CSU leadership, which are sheltered by the shadows of an errant bureaucratic process and that are deleterious to the citizens, need to be revisited?
  • How do we shed light on those decisions and contracts?
• Who should be held to account?
  • Is it time to consider changes in leadership?

The Neumann spend at Drake ($121,000,000) will cause about a 10% electric-cost rate-increase to the average consumer by 2015.  And CSU is facing at a similar spend at Nixon’s coal plant by 2016 (another 10% rate increase); and a similar spend for Mercury Emission Monitors across the system by 2017 (another 10% rate increase).   [10% + 10% + 10% = 30% electric cost rate increase by 2017.] It’s time to look for alternative solutions!  .  .  .  and there are alternatives!

• BTW – For commercial property owners, think of these rate increases this way:
  • This is taxation without representation – EPA mandates have no explicit authority in law.
  • For every dollar increase in operating costs, your building loses about $10 in value.
    • And for the tax collectors amongst us – realize that in the aggregate, every $10 decrease in property value reduces tax collection substantially.
• This is how we’re all connected.

I remember questioning the leadership and board at Memorial Hospital.  (You may recall; I called for the CEO’s firing.)  Of course, I was quickly thrown off that bus by many of my contemporaries for making that request.  That was a brutal time when I learned you need thick-skin to play this game.   Eventually, the MHS bus ran into a cathartic ditch emerging as the new CSU/MHS healthy-heath system.   I’m at the same point with CSU with a special indictment of the Carver Model and the lack of oversight driven therefrom.

The CSU bus has left the road.  .  .  That it has, is manifest by dissatisfied employee groups, a divided board and a community crying for greater accountability.  It’s time for serious change at CSU and this Neumann situation proves the point.

Jerry Forte

Former Mayor Lionel Rivera took a swipe at Colorado Springs Utilities CEO Jerry Forte in an email to the City Council.

Rivera advised the council, which doubles as the Utilities Board, to hold Forte accountable if he wasn’t giving them the information they needed or in the detail they required.

During a phone interview, I asked Rivera to elaborate.

“When I chaired the board … we didn’t always get the information as timely as we would have liked nor in as much detail or the question answered directly as we wanted. On occasion, we would just have to say, ‘Nope, you’re not getting us what we need. Go back. Do it again. We’ll talk about this next month.’

“Maybe (Forte) misunderstood what we were asking.”

While Mayor Steve Bach was talking about the need for Colorado Springs Utilities to pony up some dough for stormwater, the city-owned utility was tweeting about how much money it has already invested.

“From 2000-2011, our customers have invested $165 million in wastewater system improvements, sediment control and wetlands restoration,” read one tweet.

The mayor is making the city’s stormwater needs a priority.

Bach thinks he can find $7 million in the 2013 budget for stormwater. He also wants to take up to $7 million more from the 2012 budget if revenues come in higher than projected.

Bach also has asked the City Council to direct Colorado Springs Utilities to come up with an additional $12 million to $15 million.

In an interview in March, Utilities CEO Jerry Forte said the issue isn’t who is responsible for stormwater.

“The issue is more how to fund it. That’s the issue that we need to as a community wrestle with and decide,” he said.

“If Utilities were to fund it, it would obviously be something that would be passed on to utility ratepayers,” Forte added. “One way or another, there would need to be some revenue that would be raised to be able to do that.”

During Thursday’s press conference, Bach reiterated that Utilities should be involved.

While he was speaking, Utilities was tweeting away.

Here are their tweets in the order in which they were sent:

We recognize the need to manage storm flows in our waterways to protect people, property and our pipes that cross local waterways.

From 2000-2011, our customers have invested $165 million in wastewater system improvements, sediment control and wetlands restoration.

We’ve invested $40 million to the Fountain Creek District once SDS is delivering water to Colorado Springs in 2016.

We’ve allocated $2.2 million to Pueblo County for managing sedimentation in Fountain Creek in Pueblo.

We’ve allocated $300,000 to the Fountain Creek Watershed District for a flood control study and District administration.

A multi-million dollar project is under way to address sedimentation and erosion on a section of Fountain Creek in El Paso County.

We believe stormwater flows must be managed regionally, to fully protect our community’s investments.

Unmanaged storm flows outside of Colorado Springs city limits can jeopardize investments made within the city.

So far, we’ve identified approx. 241 capital projects for 2013 budget, only half of which can be funded at this time.

Approx. 30% of Springs Utilities budget is fuel, capital is 27.9% and labor is 17%.

Colorado Springs Utilities now says that only two more water rates increases – not three – may be needed to pay for the Southern Delivery System water pipeline.

The city-owned utility had initially planned six 12 percent water rate increases, two of which have already been approved.

In April, Utilities said the next two planned 12 percent water rate increases would be closer to 10 percent each and the fifth would “likely” be less than 10 percent. At the time, Utilities also said the sixth and final water rate hike may not even be necessary.

But Wednesday, Utilities CEO Jerry Forte said that both the fifth and sixth planned water rate increases – not just the sixth – may not be needed.

“It’s a little too early to guarantee that it won’t be needed at all, but that’s what we’re going to continue to push for if we can,” SDS spokeswoman Janet Rummel said.

Utilities plans to ask for two 10 percent water rate increases effective January 2013 and January 2014, but if things go according to plan, that may be it.

If the City Council approves the next two years of water rate increases, Utilities estimates that the average residential monthly water bill will be $57.28 in 2014.

Jerry Forte

Colorado Springs Utilities CEO Jerry Forte received $61,715 in incentive pay this year, a nearly 20 percent drop from his 2011 payout.

Forte is eligible for “short-term” incentive pay awarded right away and “long-term” incentive pay rolled into his supplemental executive retirement account.

This year, the short-term incentive pay was $31,549.50 and long-term totaled $30,165.75.

“These awards have been calculated and administered in accordance with the CEO’s contract and his performance results. The payouts occurred on April 6, 2012,” Utilities spokesman Steve Berry said Monday in an email.

The City Council, acting as the Utilities Board, approves Forte’s performance evaluation.

According to the Utilities Board March 21 agenda, Forte received a performance rating of “meets expectations,” “exceeds expectations” and “superior performance” in every category but one.

For the “Days Cash on Hand” category, Forte received a rating of “improvement necessary.”

The four-service utility, which is owned by the city, has a target range of 61 to 75 days cash on hand.

“The 2011 result is 58.93 days,” the agenda states.

When asked why Forte received nearly $15,000 less in incentive pay this year compared to the year before, Berry said it was “most likely due to a slight difference in where he landed on the metrics.”

Forte was hired as Utilities’ chief operating officer in January 2002 making $175,000 a year. He was promoted to CEO in December 2005 with an annual salary of $270,000. Forte’s current annual salary of $276,750 hasn’t changed since 2007.

Since 2002, Forte has received nearly $553,000 total in incentive pay.

Photo by Daniel J. Chacón

Colorado Springs City Councilwoman Angela Dougan says the little things, such as buying birthday cakes for elected officials, start to add up over time.

Dougan says cutting out such expenses, as small as they might be, saves taxpayer — or ratepayer — money.

When she showed up at today’s City Council meeting, which started after the lunch hour, Dougan said she was less than pleased to see the spread of goodies.

The council met at the Las Vegas Wastewater Treatment Plant during its informal meeting. It’s the latest in a series of meetings devoted to business of Colorado Springs Utilities.

Dougan says providing bottled water for meetings is fine, but she said today’s spread, which included cheese and crackers, cookies, cokes, chips and fruit, was over the top.

Her reaction is the subject of today’s Quote of the Day.

“Seriously?” Dougan asked Utilities CEO Jerry Forte.

(not the actual bus)

Call it the SDS Express.

A city-owned bus is transporting former Mayor Lionel Rivera, City Council President Scott Hente, Colorado Springs Utilities CEO Jerry Forte and other city officials and Utilities employees Friday to the Pueblo Dam for a celebration commemorating the start of major construction on the 62-mile Southern Delivery System water pipeline.

“This is a more efficient way to transport the group than individual cars,” SDS spokeswoman Janet Rummel said in an email. “Those riding the bus will participate in a tour of construction at the dam prior to the event.”

Mayor Steve Bach is scheduled to attend Friday’s event, but he’s not going by bus, according the passenger list.

Rummel said such bus transportation “has been done for similar events that many Council members have attended in the past.”

Colorado Springs ratepayers will apparently foot the bill.

“I have been told that the bus gets 6 miles per gallon and the cost of the fuel per gallon is $2.56,” she wrote. “For the roundtrip, we estimate the cost of fuel to be just under $40. The City also has designated a City employee to drive the bus that morning instead of their normal dispatch duties.”

The bus is fueled from a city fuel station, Rummel said.

“Our understanding is that the driver was already scheduled to work that morning. We will work with the City to reimburse them for their costs,” she said.

Here’s the passenger list:

Council members riding the bus:
Scott Hente
Merv Bennett and his wife
Brandy Williams
Val Snider
Jan Martin
Tim Leigh (tentative)

Staff riding the bus:
Steve Cox
Jerry Forte
Gary Bostrom
John Fredell
Ken Burgess
Sherri Newell
Dave Padgett
Bill Cherrier
Bruce McCormick
Janet Rummel

In addition, former Mayor Lionel Rivera and Vice Mayor Larry Small will be riding the bus.