City needs millions for stormwater system, city attorney tells council

DANIEL CHACÓN Updated: March 21, 2012 at 12:00 am • Published: March 21, 2012

The politically prickly issue of stormwater has resurfaced.

More than a year after Colorado Springs ended the Stormwater Enterprise, City Attorney Chris Melcher urged city officials Wednesday to come up with millions of dollars needed to operate and maintain the city’s aging stormwater system.

Melcher gave Mayor Steve Bach and the City Council five options, including making stormwater a responsibility of Colorado Springs Utilities and asking voters to pass a tax.

Melcher emphasized that Utilities should play a big role in the solution because he said the future of the $2.3 billion Southern Delivery System water pipeline is at stake.

“Utilities right now has a shared interest with the city for a number of reasons, but particularly because their SDS project is contingent on a permit that requires the city, which includes Utilities, the entire city, to have a functioning stormwater system,” Melcher said during the monthly Mayor’s Counsel Meeting between Bach and council members.

The 62-mile pipeline from the Pueblo Dam to Colorado Springs is under construction.
Colorado Springs is falling woefully behind on its stormwater needs.

The city should be spending $13 million to $15 million annually on stormwater, and the unfunded capital needs for stormwater are estimated at $500 million.

The city is spending only about $1.2 million to pay for the federally mandated stormwater component of the National Pollutant Discharge Elimination System program.

At least two council members — Tim Leigh and Angela Dougan — said the city should try to find a way to pay for stormwater through Utilities’ budget of more than $1 billion.

In Colorado Springs, the council doubles as the Utilities Board.

“There’s got to be fat in that budget somewhere to solve that problem. Otherwise, I don’t know how you fund it,” Leigh said.

Bach said he and council members need to discuss how much excess revenue, previously referred to as a payment in lieu of taxes, or PILT, goes into the city’s general fund from Utilities to pay for stormwater. The so-called excess revenue from Utilities to the city totals about $26 million annually. Bach, who signed a no-tax pledge before he was elected last year, called stormwater needs “a shared responsibility.”

Utilities CEO Jerry Forte said in an interview that 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.”

Leigh said Utilities officials need to change their way of thinking.

“I hate that train of thought because it seems like every time they need money, we just raise the rates,” he said. Utilities customers’ water rates are expected to double in the coming years, in part to pay for SDS.

“Government tends to have a knee-jerk reaction that, ‘We have a need. Let’s go ask people for more money,’” Dougan said. Council President Scott Hente said city officials have long discussed how to pay for stormwater. Before the previous City Council enacted a stormwater fee, which opponents commonly referred to as a “rain tax,” the council considered making Utilities responsible for stormwater, he said.

“The discussion was, ‘Well, we don’t need a TABOR vote to raise utility rates,’” he said, referring to the Taxpayer’s Bill of Rights, which requires a vote on tax increases.

Hente said there was a “suspicion” or “worry” that the city would “automatically be bumping big utility increases to pay for stormwater.”

Others talked about a regional solution that would involve El Paso County and neighboring communities.

But Councilman Merv Bennett said Colorado Springs needs to lead the way.

“I like the idea of a regional solution, but this is our problem right now,” he said.

The mayor and council members agreed to talk about stormwater again in 90 days.

By then, the city is expected to have a new public works director on board.

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

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