When the Colorado Springs Regional Business Alliance threw its support behind the City for Champions proposal, which is backed by Mayor Steve Bach, it may have risked hundreds of thousands in financial support from Colorado Springs Utilities.
The private organization charged with wooing companies to Colorado Springs and helping local companies expand has received about $200,000 a year since at least 2002 from Colorado Springs Utilities for economic development programs.
But this year, City Council, which doubles as the Colorado Springs Utilities board, is questioning its political alliance as much as its economic development activity.
"The RBA has every right to weigh in on anything they want," said council member Joel Miller. "My question is whether or not their direction and goals are in line with those of council and the people we represent. If they don't, what is the outcome we're hoping to get from the hundreds of thousands of dollars they get from the city every year?"
This year, a small group of civic leaders, attorneys and developers - backed by Bach - quietly put together an application seeking $82 million of a $218 million proposal in state sales tax rebates that, if approved, would be the seed money to start construction on the four tourism projects under the City for Champions proposal. The rest of the funding would come from public and private sources.
The proposal's four projects include a U.S. Olympic museum, an Air Force Academy visitors center, a University of Colorado at Colorado Springs sports medicine center and a downtown baseball stadium.
City for Champions is under review and the city is expected to receive feedback this week from an independent analyst. The state's Economic Development Commission is expected to make a decision about the state sales tax rebates in December.
The Business Alliance endorsed the City for Champions proposal. In its letter of support to the state it said the four projects would "increase tourism to our state and region, boost economic vitality of our local economies and celebrate our destination's unique history and traditions."
Miller said City Council wasn't consulted by the Business Alliance before it made a public declaration of support for the City for Champions proposal despite receiving $70,000 from the city's Lodgers and Automobile Rental Tax fund and $240,000 from the utilities community investment fund. The council has not endorsed the City for Champions project.
"This is a publicly owned company," Miller said about Utilities.
"If I'm a ratepayer and I don't agree with a certain charity, why can't I withhold the money - it is a tiny amount on an individual bill, but I don't want to minimize it. I think there should be a community discussion."
A special meeting
The utilities board will host a special meeting at 9 a.m. Nov. 12 in City Hall to discuss the community investment fund.
Business Alliance executive director Joe Raso said the organization's support for the City for Champions shouldn't be a factor when the utilities board considers its long-standing partnership with the organization. The two issues are separate, he said.
The Business Alliance's No. 1 goal is to attract new companies and retain existing companies, thereby helping expand the utilities customer base, he said.
"In the last several years, companies we have worked with have provided $72 million to utilities," he said.
"On Nov. 12, I will take the opportunity to speak with council and share with them why we feel it's critically important to continue the partnership," he said.
Tom Neppl, chairman-elect of the Business Alliance board of directors, said losing utilities support would be a significant hit to the alliance's budget and programs, which include a legislative issues agenda, supporting military assets and related business, focusing on existing companies and working with areas colleges to develop workforce programs that match local companies' needs. "It would be unfortunate if the city or utilities would not view what we are doing as a benefit to community and not be willing to support that," Neppl said.
Funding for RBA
Council member Jan Martin said the Business Alliance's support for the City for Champions is not a factor in her vote on funding.
"My No. 1 priority is jobs," Martin said. "The organization in town responsible for growing jobs is RBA and utilities plays an important role in helping create jobs."
Council member Val Snider said he's not opposed to utilities giving money to the Business Alliance but he wants more detail about how the organization spends the money and its results, he said.
"As for the City for Champions, it will come up in and be part of our economic development discussion," Snider said. "I call into question potential political endorsements with public money."
But the issue may be bigger than just political support for any one project, said Council President Keith King. The 2014 proposed $1.15 billion Colorado Springs Utilities budget includes $760,000 for the community investment fund, which also provides grant money to nonprofit groups and money to the Colorado Springs Technology Incubator. Utilities also sponsors seven city events including the Rocky Mountain State Games, Veterans Day Parade and Colorado Balloon Classic.
He said he will push for decreasing the utilities contribution to the RBA and possibly other organizations.
"The question is to what extent should utilities be involved in supporting community-based nonprofits or for profits and whether that is an appropriate function," he said.
Utilities board will host a special meeting at 9 a.m. Nov. 12 in City Hall, 107 N. Nevada Ave. The board will discuss the proposed community investment budget.
At 1 p.m. City Council will convene a public hearing on the proposed electric and gas rate increases. Council also is expected to vote on the rate increases and the 2014 utilities budget.
PROPOSED 2014 COMMUNITY INVESTMENT BUDGET
• Colorado Springs Regional Business Alliance, $240,000
• Colorado Springs Technology Incubator, $50,000
• Colorado Procurement Technical Assistance Center, $5,000
• Membership dues: Downtown Partnership, $15,000; Business Alliance, $15,000; Southern Colorado Business Partnership, $1,000
• Community Focus Fund, $256,000. About 75 community organizations receive grants from $25 to $7,500.
• Project COPE Partner Agencies sponsorship, $18,000
• Sponsorship program, $49,000. About 60 organizations receive funds from $150 to $2,000.
• City sponsored events: $97,260. Rocky Mtn. State Games; Veterans Day Parade; Pikes Peak or Bust Rodeo Parade; Colorado Balloon Classic; Street Breakfast; Everybody Welcome Diversity Celebration; and Festival of Lights Parade.
Local memberships, $15,245. Includes membership in 20 local organizations.