Southern Delivery System: A billion-dollar gambit

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A “Black Swan” event, according to Nassim Taleb’s popular 2007 book, has three attributes.

“First, it is an outlier,” Taleb wrote, “as it lies outside the realm of regular expectations, because nothing in the past can convincingly point to its possibility. Second, it carries an extreme impact. Third, in spite of its outlier status, human nature makes us concoct explanations for its occurrence after the fact, making it explainable and predictable. A small number of Black Swans explain almost everything in our world, from the success of ideas and religions, to the dynamics of historical events, to elements of our own personal lives.”

Taleb cites the Internet, the personal computer, World War I and 9/11 as examples of Black Swan events.

It’s a beguiling theory, one which absolves us of blame for ignoring Cassandras, and assuming that the future will unfold as we might prefer. Willfully ignoring impending disaster is only human, so we can rest easily here in Colorado Springs.

The city’s organizing principle is growth. Gen. Palmer planned for and expected growth, as have his successors over the last 139 years. From a few miserable shacks scattered along the banks of Monument Creek we’ve grown to become a sprawling mini-metropolis of 400,000 souls. Not everyone who bet on the growth and prosperity of Colorado Springs has gotten rich (timing is everything!), but no fortunes have been made by those who bet against it.

In that context, it makes perfect sense for city council, sitting as the Utilities Board, to approve 12 percent hikes in water rates for 2011 and 2012, with the prospect of equally dramatic increases in 2013-2016.

In five years our water bills will double, so that Utilities can service more than $1 billion in new debt. The money will go to construct the Southern Delivery System, which will eventually transport water from Pueblo Reservoir to Colorado Springs. When completed, the additional water will fuel the city’s anticipated growth, much of which will come from the development of the 25,000-acre Banning-Lewis ranch, annexed by the city in 1989.

As water rates rise, homeowners will find themselves paying twice as much for residential irrigation. Higher prices accompanied by a repeat of the 2000-2002 drought may threaten the city’s urban forest. Denied water both by nature and strapped homeowners, many of the hundreds of thousands of non-native trees that now cover land that was once treeless prairie will wither and die. The economy will suffer, as tens of millions in annual interest costs flow out of town to bondholders.

And so what? We’ve always grown, we’ll keep on growing, and we can’t just close our eyes and pretend that growth will stop, right? Without growth, the city will slowly fade away, populated only by retirees and discouraged no-hopers. Forget sustainability, forget climate change, forget global politics; we’ll need the water. We’ll do what we have to do, and let whoever’s running the city in 2050 figure out the next step.

No nattering nabobs of negativity for us! Here in Colorado Springs, we prefer the prattling pollyannas of positivism!

We’re placing a billion-dollar bet on the future, which will cost every Colorado Springs homeowner hundreds of dollars annually. To win the bet, we just have to grow at a modest rate during the next couple of decades. Lose the bet and we become a stagnant, job-shedding community like today’s Detroit, or yesterday’s Pueblo. Based on past performance, the odds favor us — or do they?

Taleb characterizes Black Swan events as unpredictable outliers. But he’s wrong. All the Black Swan events he describes (including the discovery of black swans in Australia during the 18th century) were predicted. Sept. 11 was no surprise to intelligence analysts who had tried in vain to alert their superiors to the possibility of such an event. Visionary technophiles who extended Moore’s Law into the future accurately predicted personal computers and the Internet. For example, the Whole Earth ‘Lectronic Link started 25 years ago as a dial-up bulletin board and gave birth to Craigslist and others. The First World War, as Barbara Tuchman’s magisterial “The Guns of August” makes clear, was widely anticipated by analysts whose opinions were of no interest to European leaders.

Maybe the Black Swan is already circling gently overhead, ready to land on Prospect Lake (or Pueblo Reservoir). Whether the “grim, ungainly, ghastly, gaunt and ominous bird of yore” will bring news of base closures, renewed drought in the Colorado River basin, or some combination of events unforeseen by all but a few we won’t know until the bird lands.

The prospect of a stagnant economy, outlandish water bills, a pipeline to nowhere and this year’s radiant spring followed by years of drought is not pleasant to contemplate.

So let the swan land — in 2050.

John Hazlehurst can be reached at john.hazlehurst@csbj.com or 719-227-5861.

One Response to Southern Delivery System: A billion-dollar gambit

  1. I guess politicians never say anymore: “Growth pays for itself.” Doubling our water bills means growth does NOT pay for itself (unless we can figure out a way for only the new residents to pay the total bill of the added water supply the city’s going to need for those very same new residents).

    Current residents will get NOTHING from the development of the Banning Lewis Ranch, other than more crowded roads and doubled water bills.

    Glen Meyers
    May 14, 2010 at 7:25 am