City Council to vote on Utilities surplus

More than $1.4 million is sitting in an escrow account held by Colorado Springs Utilities, money that could  flow into city coffers in the next few weeks if Mayor Lionel Rivera gets his way.

At issue is whether Issue 300, a measure approved by voters last fall that effectively ended payments to the city from its revenue-producing enterprises, applies to the municipally-owned utility.

Rivera argues that the City Charter, not Issue 300, is the guiding document that determines where CSU’s surpluses go. And the charter states that any surplus from CSU can be appropriated to the city’s general fund.

“The charter overrules Issue 300,” Rivera said in an interview Tuesday, adding that payments to the city from other enterprises, such as the airport, are being phased out as required by the new ordinance.

The City Council is expected to vote on what to do with Utilities’ $1.4 million later this month.

Issue 300, sponsored by anti-tax advocate Douglas Bruce, instructed the city to phase out payments in lieu of taxes to the city’s general fund from its enterprises over an eight-year period starting in 2010.

As a consequence, Utilities was instructed to hold back one-eighth, or nearly $4 million, of the estimated $31.7 million in funds scheduled to flow into the general fund in 2010 and place it in an escrow account. As of the end of April, the money in the escrow account amounted to $1.4 million, said Terri Velasquez, the city’s chief financial officer.

“We’ve always had use of these funds,” said Vice Mayor Larry Small, who agrees with Rivera that the charter trumps Issue 300.

Not all members of the City Council share their interpretation, including council members Randy Purvis and Tom Gallagher.

 “I understand where the mayor is coming from,” said Gallagher. “Unfortunately, that matter was decided by voters, and Issue 300 says there should be no payments to the city.”

Purvis agreed. “It’s contrary to what Issue 300 instructs the city to do,” he said.

Still, Purvis said the four-service utility should pay the city for placing its gas lines, water lines and electric lines on city property.

Many investor-owned utilities routinely pay millions to municipalities for use of their rights-of-way. But if the payments are phased out in keeping with Issue 300, that means that CSU won’t pay anything to use the city’s rights-of-way.

“I’d like to go back to the voters and ask them if the utility should pay the city for the use of its rights-of-way,” Purvis said.