City Council poised to vote on water rate hikes

The Colorado Springs City Council is poised to vote Tuesday plans to raise water rates by 12 percent in both 2011 and 2012 to help pay for Colorado Springs Utilities' Southern Delivery System pipline system.

The rate hikes are the first of six planned increases through 2016,  documents submitted to the City Clerk's Office show. If approved, water bills will more than double. SDS would pump water from Pueblo Reservoir to Colorado Springs through a pipeline and series of pump stations. Construction on the pipeline is expected to begin later this year. City Council members on Monday heard a presentation on the rate hikes from Utilities officials.

For the first time, executives of the city-owned Utilities have disclosed that pipeline costs will be higher than the $1.2 billion frequently cited by the media. William Cherrier, chief planning and financial office, said at the April 27 City Council meeting that the first phase of SDS could cost $3 billion or more, when financing costs over the next 40 years are included. A Utilities spokesman said long-term financing costs could not be calculated until recently, when such factors as the timing of construction and interest costs were determined.

In memo released last week, Utilities revised that $3 billion figure downward, saying the first phase will cost $2.3 billion. Utility officials also said that what they call "Phase II components" of SDS, including two reservoirs, are "not essential."

City Councilman Tom Gallagher, a critic of SDS, called Utilities' statement "mind-boggling" and pointed out that it is in conflict with environmental documents that identify the reservoirs as "critical components" of the project. "This is a very scary statement since it is these SDS components that are responsible for increasing the redundancy and reliability of the city's raw water system," he said.

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