Out of left field Wednesday came a bizarre last-minute proposal for a City Council ballot referendum. Council president Scott Hente and council member Jan Martin want a ballot measure that asks voters to establish an elected board of directors to govern Colorado Springs Utilities, the city-government enterprise that sells water, gas, electricity and sewage service.
The proposal is not a cure in search of a disease. This column has long encouraged city politicians and the general public to contemplate a change in oversight for the city’s utility, which the City Council governs by convening as ostensibly a separate board.
Of course, council members can pretend they are a board of water, gas and electric experts and no longer City Council for a few hours once a month. That doesn’t make it so. The pretense cannot undo the constant pressure to treat Utilities like an ATM for the sake of funding urgent needs and pet projects. Utilities CEO Jerry Forte must say “no” to a board that decides on his raises, bonuses and employment. A lesser executive would always say “yes,” to please the bosses without much concern for ratepayers.
Aside from obvious conflicts of interest, most members of this council, past councils and future councils know little about proper governance of a public utility. In the event the future CEO and other executives at Utilities are of lesser quality than those who run the enterprise today, the governance structure could become an even bigger problem.
The only way to make this equation worse would involve going along with the ill-conceived proposal by Hente and Martin.
Establishing a stand-alone elected board would merely politicize a utility that provides products and services essential to every man, woman, child and business in Colorado Springs. Candidates would gain favor by running on irresponsible and unrealistic promises, such as “I will never raise rates.”
To keep such a promise, candidates would jeopardize the utility’s bond rating. They would eliminate a vital tool — pricing — that is used to ration water during times of shortages caused by draught.
We could expect stealth campaigns from Utilities employees to elect slates favorable to their interests. We would see candidates and slates from citizens who wish to stop the Southern Delivery System in its tracks, wasting hundreds of millions of dollars we have spent laying pipe. Don’t believe it? We saw a slate of candidates run for the council on a promise of stopping the pipeline, which is essential to growth and economic development in our community.
We would see candidate run on a promise of liquidating the utility without comprehensive knowledge of the ramifications for ratepayers.
A stand-alone elected board, like the council today, would consist of politicians rather than people who know the business of selling and distributing power. We need to change governance of Colorado Springs Utilities, but not like this.
A more logical ballot question would ask voters to establish a seven-member board of experts nominated by the mayor and confirmed by the City Council. The board would, by law, consist of a lawyer or CPA with expertise in municipal bonds. Another appointee would have specific engineering credentials. Another would have expertise in the complex topic of water law. All other appointees would bring relevant expertise to the board and no former employees of Colorado Springs Utilities would qualify, to avoid conflicts of interest.
Don’t take our word for it. Experts made a strikingly similar recommendation in February of 2012. The city’s Utilities Policy Advisory Committee, which spent months researching the best practices of other successful, large public utilities, recommended this:
• An independent board of directors appointed by the mayor and confirmed by council.
• A board composed of seven members, or possibly nine.
• Members of the new Utilities Board should serve four-year staggered terms for a maximum of three terms and receive “reasonable compensation.”
Council members should refer to the ballot a measure similar or identical to the committee’s recommendation. If not this year, another time soon. The council should scrap this bad idea to establish an elected board and propose a structure that’s less political and more professional.