New: City Light superintendent's bonus was much more than he'd received before

The $40,000 bonus City Light Superintendent Jorge Carrasco received from Seattle was several times larger than others he’d received in previous years and hit the maximum called for in his contract, even as the utility faces financial problems, Mayor Greg Nickels’ spokesman said.

 

Carrasco’s contract, signed when he took the post in 2004, calls for him to receive up to an 8 percent performance bonus each year, and a 10 percent retention bonus if he stayed at City Light for four years, said Nickels spokesman Alex Fryer.

Carrasco received about a 2.2 percent increase in 2005 and 2006, which came to a total of about $10,000 in bonuses, Fryer said.

He received no bonus in 2007.

But as the PostGlobe first reported on Tuesday, Carrasco received a $40,000 bonus about a month ago. That was made up of the 10 percent retention bonus plus the full 8 percent performance bonus he could receive, the highest he's received while in office.

“This is no time to be awarding bonuses to city employees who are already highly paid. Forty thousand dollars is more than many families earn in an entire year,” City Councilwoman and mayoral candidate Jan Drago said on Tuesday.

“I understand there is a need to pay competitive salaries for highly valued executives," Drago said, "but the city must show restraint during tough economic times like these.”

Fryer said Carrasco had done much to improve the financial performance of City Light during his tenure – a fact supported by the City Council’s unanimous decision last year to reconfirm him for another four year term.

However, the timing is somewhat surprising that Nickels’ decision to grant him the maximum bonus comes during a year when the utility is facing a major budget shortfall.

The utility, which like other electric companies sells and buys its power to other utilities, was hit when natural gas prices dropped by roughly a third. The result: City Light expects to make $79 million in energy sales, about $90 million less than the $169 million it estimated.

Though at Nickels’ direction, the city held the line on rates this year, City Light is considering a number of measures and City Council members are creating an advisory board to examine what step should be taken, including raising rates.

Additionally, in order to not raise rates this year, the utility is cutting $21 million in its operations and maintenance budget and its capital improvement program by $43 million.

A statement from Nickels in April acknowledged, “Effects of these cuts include longer times to complete electrical service connections and street light repairs, and longer wait times at the utility’s call center.”

About two months later, Carrasco received a larger bonus than in previous years.

Fryer said City Light “is in a stable financial condition and its tough to find good managers to run big public utilities. Remember (City Light’s) budget is just under $1 billion. Regardless of what’s happening in the larger energy market, Jorge has a proven track record of accomplishment.”

“This is no time to be awarding bonuses to city employees who are already highly paid.  $40,000 is more than many families earn in an entire year,” City Councilwoman and mayoral candidate Jan Drago said on Tuesday. 

“I understand there is a need to pay competitive salaries for highly valued executives," Drago said, "but the city must show restraint during tough economic times like these.”

Bruce Harrell, chairman of the City Council’s utilities committee, said, “I fully understand why people question (the bonus) at a time of declining revenue, and furloughs for county and city staff. But on the other hand, this is a time when we need to retain strong leadership (at City Light).”

However, the issue moved to the arena of the current mayoral campaign when James Donaldson, the former Sonic running for office, released a statement saying that he was “outraged” by the bonus.

Donaldson said, “Mayor Nickels has his priorities all screwed up. This is a mayor who gave employees in four departments an unpaid furlough. This is a mayor who cut back library hours at a time when citizens are cutting back entertainment and camps for their children. This is a mayor who pulled garbage cans out of the parks throughout the City in order to save $180,000. This is a mayor who continues to look out for those of means, those who already have, and kick sand in the face of the little guy.”

Still, on Monday, Fryer said Carrasco has made a number of improvements during his tenure. Indeed City Council members unanimously voted to reconfirm Carrasco to a second four-year term last year.

City Council President Richard Conlin’s newsletter said at the time, “Councilmember Bruce Harrell led a thorough review of City Light and the Superintendent’s performance, and concluded that most of the Council’s program had been implemented successfully, and that City Light management had improved, although there are several outstanding policy issues that are still pending completion.  The Council agreed with Councilmember Harrell that the utility was making satisfactory progress under Superintendent Carrasco, and unanimously agreed to the reappointment.”

Before the most recent budget crunch, Fryer said Carrasco had make a number of moves to improve a utility that was hammered when electricity prices soared early this decade. City task forces found that the utility was not equipped to handle the situation, forcing it to buy energy by borrowing money and raising rates by 60 percent.

A City Light report supplied by Fryer said the utility has taken a more fiscally conservative approach under Carrasco. It has paid off its loans, and resolving not to borrow any more money. The moves restored its Standard & Poor’s credit rating to A+, and the utility lowered rates in 2007 by 8.4 percent and by an average of 5 percent over the last five years.