OUR VIEW: Bruce says Council may negate will of voters (vote in poll)

The Colorado Springs City Council will consider, and may approve on a single reading, a proposed ordinance at 1 p.m. Tuesday that would create detailed definitions of the terms used in Issue 300. The council hopes to "harmonize" the language with existing city laws, but the author of 300 says council is trying to negate the will of voters. The truth, like the ordinance itself, is difficult to discern.

The proposed law, which applies to all city enterprises, would appear to continue the $26 million revenue stream from Colorado Springs Utilities to the General Fund.

The city is also setting up the proposition that the "central theme" of Issue 300 is "restructuring the relationship between the city and its enterprises so that the enterprises operate into the future more like private business."

This is a questionable assertion, but one the city is able to attempt because of the ambiguous wording of Issue 300. Douglas Bruce, the author of 300 says: " 'Operating like businesses' was not the goal. A tax-exempt operation cannot be like a private business. They should operate efficiently, but the primary goal was to stop the forced extraction of enterprise revenue and services to benefit the city, because those were pseudo-taxes. Issue 300 did make enterprises less attractive for the city to own, since the city can no longer milk them for PILTs (payments in lieu of taxes) and other payments and subsidies, and money launder Stormwater Enterprise fees for public works budgets."

That argument comports with campaign rhetoric from supporters. The evident central theme of Issue 300 was to prevent the city from using enterprises as TABOR-evading revenue sources. Much of the rhetoric heard during the campaign revolved around the phrase "illegal tax" and the Stormwater Enterprise fees. The campaign claimed the city was finding creative ways to generate revenues that have traditionally been generated with taxes.

Issue 300, however, addressed more than just the Stormwater Enterprise. It addressed the operations of all city enterprises. In every case, the central theme of the proponents is clearly frustrating the ability of City Council to collect revenues defined as fees, with the expedient of enterprises, and then funnel some portion of the money to the city's general fund for the council to use as at will. Bruce is unequivocal:

"Government can't impose enterprise fees and then divert the revenue to government coffers; that makes the charge a tax. Even the latest appellate court twistings of TABOR said a fee diverted to another purpose becomes a tax."

(Please vote in poll to the right. City Council could use your opinion. Must vote to see results. Thanks!)

One argument the City is using to justify this sort of diversion of revenue is that City Charter provisions cannot be superseded by an initiated ordinance, such as the one enacted by Issue 300:

" ‘Gift’ does not include the transfer of the remaining surplus of the net earnings of Colorado Springs Utilities to the general revenues of the City if the transfer is authorized in the annual budget and appropriation ordinance adopted by City Council, as provided in Charter § 6-40(b). An initiated ordinance cannot supersede the charter of a city. This definition makes it clear that Issue 300 will not be construed to conflict with the Charter."

Of course, the city could avoid "the remaining surplus" by simply adjusting rates to the lowest level needed to operate the utility. Rates paid by customers have been set high enough to generate money for a payment in lieu of taxes to the City General Fund, amounting to some $26 million or more each year. It's not an usual arrangement. Most cities are served by private utilities, and those utilities typically generate cash for the municipality's general fund. Colorado Springs officials concede the PILTs cannot cannot continue in the wake of 300’s passage. This new interpretation of the terms, therefore, simply replaces "PILT" with "surplus earnings," without constraining how much City Council — moonlighting as the utilities board — can raise rates in order to create surplus earnings. This leaves open an avenue for the Council to use Colorado Springs Utilities as a general fund cash-cow, though protection of CSU’s bond rating provides something of a constraint.

The wording of Issue 300 leaves plenty of room for all of this ambivalence, and therefore the need for City Council to discern the will of voters. It’s imperative the citizens who voted for 300 examine the city’s proposed law, in order to determine whether it comports with their intentions. It is the council's job to provide a level of service the majority of citizens want, and nothing more. Let City Council know exactly what you wanted when you voted in favor of Issue 300, because the full intent of voters remains unclear. Left with this uncertainly, the council will do what it thinks is best. – Seth Richardson, for the editorial board.