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Utilities' governance will soon be up for discussion

January 16, 2012

Mayor Steve Bach’s refusal to put his signature on a $125 million line of credit for Colorado Springs Utilities last month reignited an ongoing community conversation about the governance structure of the city-owned utility.

Talk about good timing.

For months, the city’s Utilities Policy Advisory Committee has been examining the pros and cons of Utilities’ governance structure and is preparing to make a recommendation to City Council next month.

As it is now, nine council members, part-timers who double as the Utilities Board, provide oversight of the four-service utility, a billion-dollar enterprise of the city.

On Feb. 22, the advisory committee will recommend whether to change that structure.

Among the possibilities: Replace the council with an independent board.

City Council President Scott Hente, who also serves as Utilities Board chairman, said he believes his colleagues would be open to the idea even if it meant stripping some of their powers. The council directed the advisory committee to study the issue and make a recommendation.

“I don’t think council has this love affair with being a board member on Utilities,” Hente said.
“I think if UPAC came back with some very strong recommendations to change the governance, I think there would be great interest among my colleagues in listening to them and maybe putting something forward on the ballot. I’m hypothesizing because I have no idea what they’re going to come back with,” he said, referring to the committee.

Advisory committee Chairman Prince Dunn could not be reached Monday for comment.

According to the minutes of recent meetings,  committee members have heard from several industry experts or peers and received varying opinions.

Industry expert Jeff Tarbert, senior vice president of the American Public Power Association, told the committee that the governance structure “was not as important as the people who are involved in the governance,” the minutes state.

Others, however, encouraged the committee to push for an independent board, an idea that others in Colorado Springs have advocated for in the past.

“Colorado Springs Utilities’ asset value, sales volumes, and revenues have grown over the years. Future large capital additions like the Southern Delivery System will only increase business complexity and risks. Highly trained utility professionals are required to lead and mange current and future utility operations to ensure Colorado Springs Utilities provides long term economic value to citizen owners and customers. To this end, I strongly recommend consideration of establishing an independent board with full budget, rate, and debt issuance authority,” Edward Easterlin, vice president and chief financial officer of the Omaha Public Power District, wrote in a survey Oct. 21.

City Councilman Tim Leigh also advocated for an independent — and paid — board in his electronic newsletter this week.

“As it is, (to our corporate detriment), we have 9 very well intended part-time folks … who don’t have a deep clue how to run a public utility company,” Leigh wrote.

“That we occasionally ‘ask the right question’ is not supervision and I’m not even sure it’s entertainment,” he added. “That we’ve shed the hospital system seems de facto. That we need to shed Council’s authority over the utilities company seems obvious.”

Hente said he could argue for and against an independent board.

“Part of the reason for keeping the status quo is that you have an elected body that can look at what’s best for both Utilities and the city and try to meld something or construct something that works to the advantage of both organizations,” he said.

But “one of the biggest disadvantages” is that council members aren’t full-time, he said.

“Oftentimes, Utilities, which has a budget three to four times the size of the general city, gets kind of the short shrift in the deal,” he said.

Contact Daniel Chacón: 476-1623
Twitter @danieljchacon
Facebook Daniel Chacon

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