Council to discuss future of 'surplus revenue'

A showdown is looming among City Council members over ballot Issue 300 and the millions of dollars that Colorado Springs Utilities deposits annually into the general fund.

The council, which has been haggling since last year about the ramifications of Issue 300, the brainchild of local anti-tax activist Douglas Bruce, is poised to decide Aug. 10 whether the city should phase out the estimated $27 million that Utilities pays annually in lieu of taxes.

“In my opinion, we have to make a decision on what we’re going to do,” Vice Mayor Larry Small said Friday.

“It’s been drug out long enough,” he said. “We just need to move on with it and make whatever decision that we will make.”

The decision is unlikely to be unanimous.

Mayor Lionel Rivera and some council members contend the so-called PILT, or payment in lieu of taxes, from Utilities is “surplus revenue” that can be collected and spent under the city charter, which is analogous to the U.S. Constitution for the city.

Issue 300, which calls for enterprise payments to the city to be phased out over eight years, was an initiated ordinance that amended the city code, but not the city charter, and the charter trumps the code.

An opinion from the City Attorney’s Office supports the assertion that the PILT is surplus revenue.

“The PILT can only be appropriated from surplus revenues, i.e. excess funds after all other CSU requirements are satisfied,” the opinion states. “Therefore, the PILT constitutes a surplus under the city charter.”

Despite the legal opinion, other council members aren’t so sure and say the issue should be resolved by voters.

“I think, this year, that the funds should be refunded to the ratepayers and that next spring, we should put on the ballot a measure that would set a PILT rate and let the citizens vote on it,” Councilman Randy Purvis said.

During Tuesday’s council meeting, Councilwoman Jan Martin said the council should consider asking voters for their input.

“I’m not comfortable that changing the word ‘PILT’ to ‘surplus’ is enough to override the voters’ wishes on Issue 300, which I believe stated that we wouldn’t receive payments from Utilities,” she said.

Councilman Darryl Glenn has long argued that a clarifying question should appear on the ballot.

“I believe that the voters are the best ones to resolve this particular conflict,” he said Tuesday.

On Aug. 10, the council will give it another try when it considers two resolutions.

One calls for the city to appropriate the 12.5 percent that was set aside in an escrow account from Utilities’ 2010 payment until the city figured out the implications of Issue 300.

The other calls for the city to refund Utilities ratepayers in the form of a credit.

“Let’s have the vote,” Councilman Tom Gallagher said Tuesday. “Let’s get this done.”

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