Subdivisions outside Colorado Springs can take advantage of the city's massive $2.3 billion Southern Delivery System water pipeline under a measure approved today by the City Council sitting as the Springs Utilities board.
Councilors Randy Purvis and Tom Gallagher opposed the measure, and Darryl Glenn was absent.
The program allows the city to deliver water through its pipes and pump stations to users such as Cherokee Water District, Donala Water District and any other special district that can provide its own water for delivery.
Cherokee now has a three-year contract not only to have water delivered but also to buy the city's water. However, that's a unique deal and won't be repeated, or at least not often, the board agreed.
Approval of the new policy to share facilities with outsiders caps a year-long study by the Utilities board advisory committee.
The policy calls for charging outsiders "a premium" on fees and rates that will benefit Springs Utilities customers, but it doesn't define how much.
However, it does specify that half of that premium is to be declared "surplus revenue" and handed over to the city's general fund.
Long-term delivery deals can't exceed 25 years, which has some outside users skittish because financiers generally want a longer term for repayment of loans for capital construction. Among those is Dana Duthie, general manager of the Donala Water and Sanitation District, which serves an area north of Colorado Springs.
Duthie told the Utilities board it should be viewed as a partnership, not a landlord-tenant relationship.
Purvis opposed the measure, saying it sets the city up to be the bad guy when drought hits and Springs Utilities must curtail service in order to serve its own customers and create a "dry tap" in surrounding communities.
Gallagher said he fears existing customers will end up subsidizing the outsiders.
Mayor Lionel Rivera said the policy will work to the advantage of Utilities customers. "If we don't make good use of this (pipeline), we are not good stewards," he said.
In a somewhat related matter, a majority of board members said they favored continuing the payment in lieu of taxes that Utilities gives the city's general fund each year, but label it surplus funds, which are authorized by the city charter. Voters adopted Issue 300 last fall, which called for the phase-out of the PILT payment, but Rivera noted that the charter trumps a voter-initiated ordinance legally, so the City Council is on firm ground keeping the payment in place. Council is expected to vote on the issue next week.
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