Back in 2013, when the residents of District 3 elected me to represent them on Colorado Springs City Council, I took it upon myself to learn as much as I could about Colorado Springs Utilities. City Council also serves as the board of directors for Colorado Springs Utilities, and I sought to bring the same keen eye for budgeting that had served me as a businessman and in the Colorado House of Representatives and Colorado Senate.
One initiative I advocated for was to separate the president of the council and chair of Colorado Springs Utilities. Having two City Council members serving in these positions allows for a more focused leadership. City Council, acting as the Utilities Board, also set up Finance, Strategic Planning, and Personnel Committees to study and be more engaged in governing Utilities.
The work has paid off. We dug into the numbers and discovered that over the period from 2005-2014, Colorado Springs' residential utility rates were increasing faster than the rates for commercial and industrial users. How much faster? Residential customers have carried the biggest part of rate increases, with a bill increase of 52 percent compared with 29 percent for industrial and 12 percent for commercial.
What were the reasons for this? There are a few. One is that Utilities labor costs per employee have risen faster than the city's. Since 2005, Utilities average employee costs have increased 40.58 percent while its nonfuel operations and maintenance have increased 21.9 percent. City average employee costs have increased 28.32 percent with the general fund increasing 11.72 percent.
Given all this, the council decided not to raise gas or electric residential rates for this year, beginning to balance out industrial and commercial rate increase inequities from prior years.
Future Utilities Board members should pay close attention to the factors contributing to rate increases. This is important because Colorado Springs residents, many of whom are homeowners on a fixed income, should not have to balance the budget by shouldering an inordinate share of the burden for local utilities. The access fee charge should be limited and costs associated with peak electrical usage of air conditioners in the summer needs to be captured in the rates. Future Utilities Board members should focus on protecting their constituents by controlling these rate increases.
The governance structure of Utilities needs to stay under the control of the City Council. Utilities must continue to be owned by the city. This will continue to protect the ratepayers from ever-increasing rates.
Utilities in the last two years has begun to make the residential rates more competitive. For 2017, the electric and gas residential rates were frozen, and the board began to close the gap on the true cost of service for residential and commercial customers. The current board structure makes Utilities accountable to citizens.
The past four years, I have answered more questions, returned more phone calls and emails about Utilities than city of Colorado Springs issues. I have been honored to represent the citizens of District 3.
Our municipal utilities are a treasure for the ratepayers of Colorado Springs and if managed properly, will continue to be a great return on investment.
Keith King represents District 3 on Colorado Springs City Council.