Overhauling enterprises would be a "crushing blow," Springs manager says

Two proposed ballot measures designed to overhaul the city's enterprises would deal an "absolutely crushing blow to our ability to provide services," City Manager Penelope Culbreth-Graft told the Colorado Springs City Council on Monday.

A city financial analysis of the proposals, advanced by tax-cutter Douglas Bruce for the Nov. 4 election, concluded they would wipe out $212 million in general fund revenues over the 10-year phase-out while saving residents $12 in the first year and gradually rising to $127.

In the first year, the measures would reduce revenues by $3.5 million; by year 10, the reduction would total $40.5 million, roughly equal to this year's Fire Department budget.

Bruce disagreed the city couldn't survive without what he termed an illegal tax for stormwater projects.

"They're just flailing around out of desperation because these petitions will win in a landslide because people are fed up with the deceit and incompetence of council," Bruce told The Gazette.

Bruce submitted signatures last week to qualify the measures for the ballot The first would phase out enterprise payments to the city in 10 or fewer years with the savings passed on to citizens.

The second would make all fees for enterprises voluntary. Enterprises would have to operate like the golf courses - if you want to play golf, you pay for a round and play.

Both measures are aimed at the Stormwater Enterprise, created in 2005 and for which the city began collecting mandatory fees from property owners last year.

The measures would affect all 11 city enterprises, which range from Memorial Health System and Colorado Springs Utilities to golf courses and cemeteries.

Finance Director Terri Velasquez said the biggest impact would be the loss of a $26 million annual payment in lieu of taxes from Springs Utilities. The city and its enterprises also would be barred from saving money through shared costs between the city and its enterprises, such as for fleet services, legal advice, payroll and auditing.

Under Bruce's proposals, each enterprise would have to foot its own bills, which would cost more, she said.

"We worked so hard to find these efficiencies," Councilwoman Jan Martin said. "To have this pull all that apart takes away the ability to share resources and share efficiencies."

Budget Director Lisa Bigelow warned that axing the stormwater fee, which generates $16 million a year, would handicap the city's progress on $300 million in needed drainage projects.

"If we eliminate this enterprise, it means increased risk to our citizens and public and private property due to flooding events," she said.

It also would jeopardize Colorado Springs' dealings with Pueblo on the Southern Delivery System that would bring water from Pueblo Reservoir, she said. That's because the city has vowed to control runoff into Fountain Creek, a sore spot with Pueblo residents.

Vice Mayor Larry Small said that without the stormwater fee, the city might fall out of compliance with federal water quality guidelines, resulting in huge fines.

"It wasn't something we dreamed up to have interesting projects to work on," he said. "It's something that's required to be done to meet EPA regulations."

The council directed Culbreth-Graft to compile specific scenarios of what would be cut if voters approve the ballot measures.

But Councilman Randy Purvis said, "I want to avoid anything that smacks of an ultimatum. I don't think that plays well and resonates with citizens."

Small said the measures are "an example of the Democratic rights of the people being exercised by a demigod."

Bruce lashed out in an interview with The Gazette, saying $3.5 million amounts to 1 percent of the city's total budget including enterprises.

"It just means a slower rate of increase," he said. "Only in government does that mean a cut."

He said city officials "need to prepare for the chickens to come home to roost based on their past misconduct."

Bruce and others contend the stormwater fee is a tax the council enacted illegally without a vote of the public.

City Clerk Kathryn Young must verify whether Bruce submitted enough valid signatures by July 17. If he did, the council would act on Aug. 26 to place the measure on the ballot.