UPDATE: Springs Utilities proposes 26% budget increase for 2023 | Local News
Utilities Board Chairman Wayne Williams says most of the budget increase is due to volatility in natural gas prices. Although Utilities hedges against price fluctuations, it’s not possible to anticipate all changes or what will happen, he says.
In Washington, DC, on a trip to Colorado Springs Chamber and EDC, Williams says he asked Sen. John Hickenlooper, D-Colorado, about the uncertainty surrounding natural gas prices and Hickenlooper said, “No one won’t build a refinery if it’s an energy source that in the next decade won’t be used at all.” (Many utilities are turning to renewable sources, like wind and solar.)
Williams also says the 10% pay rise is designed to retain and attract workers at a time when it’s tough to fill the ranks.
Here are two charts he provided that further explain the proposed budget:
Colorado Springs Utilities largely blames inflation for a huge 2023 budget proposal that plans to spend 26.3% ($325 million) more than this year — an increase of $1.2 billion to 1, $6 billion.
(By comparison, this year’s general fund budget that funds police, streets and parks totals $397 million.)
“The proposed preliminary budget for 2023 has been developed to achieve competitive utility rates, safe and reliable service and exceptional customer experiences. The budget supports the financial measures necessary to maintain a healthy “AA” credit rating that helps keep customer rates competitive,” Utilities says. on its website.
The city council, which includes the Public Utilities Commission, is expected to approve the budget and a rate increase on Nov. 8.
We reached out to council chairman Wayne Williams, one of several candidates running for mayor in the municipal elections in April next year. (He accepted a $2,500 contribution from Utilities CEO Aram Benyamin for his campaign.)
Williams said in a text message that he was unable to discuss the budget proposal with the India Wednesday, because he’s in Washington, DC, with the Colorado Springs Chamber & EDC.
On its website, Utilities says, “This increase is primarily the result of higher capital project costs, driven by inflation and a global increase in natural gas prices.
He then lists the capital projects, which represent approximately 26% of the budget.
• Fiber network operational at $78.8 million, which we’ve covered here, here, here, and here, explaining how projected utility revenues may not go as planned. The utilities also want to spend $31.1 million on a sustainable energy plan, $29.1 million on smart meters, $15.2 million on a central substation that would claim multiple companies and border a residential area along Austin Bluffs Parkway, and $12.8 million for new generation, although the downtown Drake Generating Station was recently closed.
• Increased technology investments such as the client technology modernization program, financial system upgrades and network upgrades are also impacting the 2023 budget.
• Surplus funds transferred to the city are expected to remain stable in 2023.
• Total labor and benefits budget increase is 10%.
All of this means that utility customers will pay more. Not only will there be an adjustment to fuel costs this winter, which Utilities warned of a few days ago, but it also plans to raise water and sewage rates by 5% and 4% , respectively.
“This is an annual adjustment to pay for the cost of system-wide infrastructure projects. Major drivers include inflationary increases in labor, benefits and maintenance of the The increases will also be used to fund infrastructure investments in projects such as smart meters, replacing aging water pipes and rebuilding and refurbishing water reservoirs,” says Utilities.
If the Utilities Board approves the rate increase in November, the typical residential bill would increase by $5.21 per month for water and 84 cents for sewage, starting Jan. 1.
At least one citizen cries foul.
Tim Leigh, a former city council member who runs a property company, calls the budget hike “outrageous given the country’s financial situation, inflation and uncertainty about jobs and the recession.”
Leigh tells India via email that he questions much of the increased spending, starting with the fiber project, which Utilities says will cost around $600 million but will largely be funded by a fiber provider , Ting, although it is unclear whether the contractor will be able to attract many customers in the local market where several other fiber companies are currently installing fiber.
“Who says we need fiber to compete with Comcast and Century Link and other private market solutions that already install fiber citywide at no cost to the taxpayer?” said Leigh.
As for the smart meter program, Leigh wonders if it can be postponed until “the economy stabilizes”.
Leigh says over the phone that the Council, acting as the Utilities Board, should suspend the budget and “live within its means”.
“No one is going to die. We are all going to have public services,” if there is no spike in the budget, he says.
When he saw the budget figure, he said, he was “amazed that the city council or anyone else wouldn’t stand up and say nothing. Why do we have to spend this money with an inflation of 8 % and people who suffer?”
He also wonders if employees need a 10% raise while some workers in the community are getting no raises or small raises. “That doesn’t seem fair to me,” he said.
“I’m not sure I know of an organization that would dare to ask for a 26% budget increase,” Leigh adds, noting that the 2024 budget plan calls for a further 11% increase.
“My call to action is to immediately suspend the 2023 budget and review the entire budget,” Leigh said.
In the longer term, Leigh says the Public Services Board should be a separate elected council made up of people with expertise in public services, rather than the city council. This strategy was tried a few years ago and yet never received a vote for approval from citizens.
“We should be able to trust the people we have elected to watch over the citizens,” Leigh said. “Whoever approved this budget is out of the question to care about the little guy.”