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Utilities 101: Here’s how Council can solve its problems

Mon, Sep 10, 2012

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A recent formal City Council agenda included these items:

  • “A resolution to transfer funds in the amount of $40,000 from the demolition of the Old Terminal Building project to the West Aviation Lavatory Triturator project at the Colorado Springs Airport. (Airport — Mark Earle)”
  • “CPC ZC 12-00047: (Quasi-Judicial Matter) Ordinance No. 12-55 amending the zoning map of the City of Colorado Springs relating to 5.75 acres located on the north side of Flying Horse Club Drive, directly east of the Flying Horse Country Club, from A(Agricultural) to OC (Office Complex). [second presentation] (Item No. 3-8-SA — C.C.Meeting — July 24 2012).”

Issues such as these — sometimes trivial, sometimes significant — are part of the fabric of local government in every American city. You may not understand much about land use, or airports, or the concerns of specific neighborhoods before you join the City Council, but you’ll learn in a hurry. Being a reasonably effective councilor requires only that you listen, pay attention and subject your butt to multi-hour meetings.

A developer wants a zoning change? Go look at the ground, examine the application and regard everyone involved — the applicant, neighbors, planning staff, planning commission, fellow councilors — with polite skepticism.

You learn by doing. After a couple of years, you’re at ease with the terminology, the procedures and the substance of what you do.

And though you may complain about Mayor Steve Bach’s high-handed ways and would like to have your very own city attorney, you’ve got it pretty good.

You’ve got nice offices adjacent to council chambers in a beautifully renovated historic building in the middle of downtown. Applicants come to you, and you sit in a semicircle on an elevated dais, masters and mistresses of all you survey. Land use? City budget? Despite our new form of government, you have plenty of power.

And don’t forget — you’re also the board of directors of our billion-dollar municipal utility — or are you?

The charter says that you are. Common sense says that you’re participants in an elaborate charade.

Consider a typical meeting of the Utilities Board.

The Lords of Utilities don’t come to you. Instead, you all trudge down to their offices in the south tower of the Plaza of the Rockies. You take your places at temporary tables in a conference room directly across from seven senior Utilities officials.

Nine on seven — shouldn’t you have an advantage? On an equal playing field, sure, but this isn’t touch football. This is the all-pros vs. nine random people who never have played the game.

Just look at the men and women sitting across the table. Bruce McCormick, Bill Cherrier, Jerry Forte? To misquote F. Scott Fitzgerald, “The very smart are different from you and me.” They understand what you’re supposed to understand.

Take a look at your 129-page agenda. Note on page 54 that “as of June 2012, the hedged portion of the variable rate debt portfolio had a mark to market of $236.86 million in favor of Colorado Springs Utilities’ counterparties.” Is that bad or good?

Or consider exhibit 1, pages 51-53, “Objector Cases.” What’s going on with02CW122 Cripple Creek & Victor Gold Mine (consolidated with 10CW31)? And what about the other 119 water cases in which CSU is listed as an objector?

This is not the kind of stuff that you learn on the fly. You need a few university-level courses in finance and water law to understand what’s going on. It’s not your fault; it’s just the way the system works.

Successful private companies choose board members with complementary skill sets, but voters are less focused.

So as long as we’re going to have a municipally owned utility, you and your colleagues will continue to represent us — but you’ll need some education and some cash.

Here’s a proposal. The charter forbids you from giving yourself a raise in your capacity as council members, but it’s silent on whether you can be paid as members of the Utility Board. Give yourselves a modest salary — say, $45,000 annually. That should enable all of you to go back to school and take courses in water law, finance, and utility rate management.

Money in your pockets, knowledge in your heads — maybe then you can figure out that owning and running an electric utility is not one of our city’s core competencies and help drag us, however reluctantly, into the future.

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6 Comments For This Post

  1. Jes Lookin Says:

    But does that mean doing something outside 11am-2pm M-F, depending on if you get in ? That wouldn’t be proper Colorado Springs business ! For most people here who work, about half of the companies here don’t exist because they’re never open.

  2. Joe Bachofen Says:

    John, here’s what I think is happening. The Utilities Board is using the tried and true strategy of burying the Board of Directors with data. The benefit to them is that the Directors go away impressed but secretly confused and the Utilities Board will be free to manage things as they choose. The Board of Directors must set the meeting agenda.
    A standard agenda includes a review of established goals, a review of plans to meet the goals, progress toward those goals, a review of standard operating metrics and a discussion of emergent problems that the Utilities Board cannot handle on its own. If the there are more than a set number of emergent problems, the Utilities board is failing to meet expectations.
    Clever management teams work around the Board of Directors.
    Effective management teams work with them.

  3. Tim Leigh Says:

    I whole heartily agree with your assertions and have been squarely thrown under the elected official and embedded bureaucrat bus for spreading blasphemous statements like my suggestion that we find a “competent board”; suggesting “salaries”, etc.

    Some of your observations are such statements of the obvious, that one wonders why we have to make them.

    Alas and alack, I fear for the Republic.

  4. Diane Wengler Says:

    The electric division of CSU should be sold to a publicly-traded utility with a professional board of directors answerable to stockholders.

    Putting CSU out to bid would likely create wonderful offers from companies like XCel Energy, Black Hills Energy, etc., in the form of much needed sale cash for the city’s needs, such as stormwater and infrastructure repair.

    The Mayor and Council would turn a potential liability into a tremendous financial windfall.

    That’s quite a legacy.

    What if the Neuman technology doesn’t work? Taxpayers of Colorado Springs can little afford to take the chance.

    Although CSU is likely encumbered with debt, it is still attractive as a sale (perhaps in the billion-plus range?) because of present and future customers.

    Professional utility companies have the expertise and cash to clean up the arsenic, mercury and lead-poisoned soil beneath Martin Drake and make our city a healthier and more beautiful place to live.

    Coal-fired plants are being retired all over the country not only because they fail the country’s new clean air standards, but because their deadly emissions are known to cause lung cancer and emphysema.

    It’s a win-win situation that merits consideration.

  5. Frank Louis Says:

    Half of the City Council members have more formal education than Mayor Bach.

  6. Kathy Lesmond Says:

    I beginning to think this City likes failure. We have some of the best utility rates in the country and we have an electable board who is responsible for setting rates who answer to the people. Sell the utilities and get a good chunk of money to fix the storm water problems that this community is too irresponsible in paying for, then what? Money gets spent, rates will go up. A private boards mission is to keep their investors happy. Colorado Springs ratepayers will lose. No more money for stewardship in the community. No more contributing to the general fund. That is not a maybe. Compare Excel rates now with CSU. How many unemployed people have trouble paying for utilities now? Higher rates will scare new companies away and drive away existing ones. Gas and oil will be looking at utility rates too. COS is trying to attract Cyber and data who need and want low utilities. why are we trying to fix something that aint broken? Stay away from my utilities!