Rate hike proposal survives first look
Colorado Springs Utilities employees won't get raises next year, but the utility's 2009 budget remains otherwise intact after getting a first look by City Council on Tuesday.
The council voted 6-3, on the budget's first reading, to approve the city-owned utility's budget, minus the raises. The budget forecasts an 18.9 percent rate increase next year and will be up for a final vote Dec. 9. The council must approve the rate increases separately, set for votes Dec. 9 on the increase tied to coal and natural gas costs, and Jan. 27 on water and wastewater increases.
Council members appeared to be in agreement that Utilities should not ask for 2.9 percent raises for employees, at a cost of $1.4 million. Of the three council members who voted against approval, two said it was because the measure didn't cut enough from the budget.
"If I can bring it down even a penny, that's one penny a ratepayer has to be able to pay their bill," said Councilman Darryl Glenn, who voted against approving the budget, along with Tom Gallagher and Randy Purvis.
Utilities plans across-the-board rate increases: 6.8 percent for electricity, 18.8 percent for natural gas, 44.9 percent for water and 17.2 percent for wastewater. The average household bill would increase $29.09 a month, from $153.97 to $183.06.
For commercial customers, rates would rise 5.3 percent for electricity, 22.9 percent for natural gas, 44.9 percent for water and 17.2 percent for wastewater.
Utilities says the rate increase is needed because a slowdown in development has hurt fees it collects for the water system at a time when water costs are increasing because of the Southern Delivery System, a proposed $1 billion pipeline to Pueblo Reservoir. The utility also says it is paying more for coal and natural gas.
The overall budget, as proposed Tuesday, is $1.12 billion, up $170 million from this year's budget.
Although Utilities employees won't get 2.9-percent raises, the council left in the budget $9.7 million in pay-for-performance payments for employees. Utilities spokesman Dave Grossman said the payouts, which are part of employees' base pay, are based on performance this year, but the money comes from the 2009 budget. The program ends after this year.
Councilwoman Margaret Radford said the city has a legal obligation to make the payments for 2008.
Before voting to approve the budget, council members debated whether Utilities should trim its $1 million education and advertising budget, for broadcast and print ads, signs on buses and other media. Some saw that as optional in such dire fiscal times.
"We shouldn't be on billboards. We shouldn't be on TV. I'd like to see a little less presence in the newspaper," said Gallagher, who moved to cut that budget in half. "We don't have to generate interest in buying our product. There's nowhere else to go."
Utilities officials said the money is used for education and advertising to encourage conservation. But Mayor Lionel Rivera said that is not always the message, that the ads sometimes tout the Utilities' accomplishments.
"If we're going to communicate to the public about demand-side management and conservation, that's one thing, but we always seem to stray from that during the year," Rivera said.
Others, though, supported keeping the advertising budget.
"With the rate increase we're going to see this year, educating the community on ways they can conserve on utility bills is one of the most important things utilities can do this year," Councilwoman Jan Martin said.
Gallagher's motion to cut the ad budget failed 4-5. Voting with him were Glenn, Purvis and Rivera.
