UP #353: Is City Light CEO’s Raise Justified?

Home » UP #353: Is City Light CEO’s Raise Justified?

The City Council voted 6-2 (Myself and Sawant opposed and Harrell was absent) this past Monday, June 15, 2014, to raise the City Light General Manager and CEO salary range by 45 percent, setting a new maximum of $364,481-per-year up from a $250,750 top-end salary. The Council vote paves the way for the Mayor to pay the highest paid Seattle city employee even more. The Mayor has said he will give General Manager and CEO Jorge Carrasco a 24 percent bump from his current salary of $244,954 up to $305,000.

Council proponents argued that Carrasco is underpaid in comparison to leaders of other publically owned utilities. Their conclusion originates from city staff analysis showing we pay our top City Light post less than other governments pay their utility heads. Past city staff studies reached the same conclusion. However, the relatability of the other salaries has been challenged because some utilities included as comparables in the staff analysis oversee multiple utility services, like water, while City Light just handles electricity. Regardless, on the surface, it would seem that one could justify the raise—albeit a very large raise on top of a very large salary when compared to what Seattle pays other city employees.a-look-at-the-budget

Councilmember Sawant and I raised objections of two kinds. First, and most obvious, is that in comparison to other City Light employees’ salaries, the General Manager and CEO’s new salary is out of line and sends the wrong message to our employees and the public. The big ticket salary basically says that CEOs of large corporations deserve a salary commensurate with whatever the market will bear, and that City Light must be a large corporation with its over 2,000 employees and budget of more than $1 billion. In other words, if other CEOs receive huge salaries, the City must offer the same to attract top talent.

Unfortunately, this trend has gone on for some time. In 1965, CEOs made more than 20 times what an average worker was paid. By 2012, that ratio was more than 10 times as skewed: CEOs made 273 times the average worker that year. I don’t believe that the Council, representing taxpayers, must conform to this pattern. By doing so, we contribute to the very problem of income and wealth inequality that now plagues our nation and undermines our economic stability. As workers are paid less and less, they have less to spend to keep our economy functioning smoothly. What’s more, workers are being pushed out of Seattle. Relative to wages, housing costs have become unaffordable. The irony is that since President Ronald Reagan embarked on a philosophy of letting the unfettered market determine what is fair in the 1980s, laborers have enjoyed an ever smaller share of the productivity gains their hard work produced. American workers are not being adequately compensated for their efforts.

The second objection raised is more to the point here in Seattle. Our city government has kept a tight lid on wages for average city employees. How can we fairly bargain with our employees after giving such an ostentatious salary increase to one individual? The Council and Mayor’s pay hike for the City Light General Manager and CEO justifiably creates hard feelings among our employees and sets up a very poor example for evaluating and rewarding performance.

It’s this last point that I most underscored during the meeting Monday. First, a little background—Carraso was confirmed in February 2004, and, that spring, a survey was conducted of City Light employees. It had been scheduled before Carrasco became the head of City Light. A report was issued on the findings, and four significant problems were identified:

  • A troubling lack of confidence in the executive management
  • Poor communication among the various levels within the utility
  • Lack of adequate staffing to provide high-quality service
  • A sense that quality and process improvements were not a priority

Another survey was taken in 2007 to see if these problems had been addressed during the first three years of Carrasco’s leadership. To assure that the survey was measuring the same concerns, 29 of the 50 questions asked were pulled from the 2004 survey, either exactly or using very similar language. More than three-quarters of City Light’s workforce responded to the survey, roughly the same rate as in 2004. The Council’s Central Staff reviewed the survey and concluded that the 2007 survey averages were statistically indistinguishable from those of the 2004 survey.

A staff report to the Council concluded, ” . . . the most striking conclusion to be drawn from the new survey is how little things have improved in the three-plus years since the first survey was done. In key areas – leadership, communication, and staffing – in which City Light did poorly in 2004, there has been no improvement.” Though some improvements were noted, the report said scores for key areas remained “at a level the survey developer would describe as a failing grade.”

The Council acts as the board of City Light, and I believe that we (and I include myself) should have required—at a minimum—that another survey be taken. We did not. There has not been another survey conducted since 2007. I asked the Superintendent at a June 9, 2014 meeting when another employee survey would be done. He said one will be done this year. However, our Central Staff know of no such effort.

So the bottom line is: why are we boosting the pay range for the City Light CEO when we have no evidence comparable to a survey showing employees believe that there has been improvement under Carrasco’s leadership? Carrasco has told me that he solicited input from employees when drafting a new City Light strategic plan City Light. I’m glad, they certainly should be involved. But that is not the same as a thorough review; that is not a survey showing how things have gone since 2007.

Unfortunately, we heard news recently that raises concerns things may not being going so smoothly at the utility. Thanks to the investigative reporting of Seattle Times reporter Jim Brunner, it was revealed to the Council and the public that City Light entered into a $47,500 contract with marketing firm Brand.com to engage in an “action plan” that included creating positive blog items and stories about City Light’s green image.

City Light has made strides with its sustainability programs—that is not to be challenged. But isn’t it more important to spend funds to assure that we have a well-run, efficient and responsive public utility? The money would have been much better spent on addressing the problems that were identified 10 years ago, reiterated in the 2007 employee survey and, for all we know, might still exist.

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