Thursday, October 23, 2014

Another look at Utilities governance

Posted By on Thu, Oct 23, 2014 at 2:37 PM

click to enlarge John Cassiani: Time to look at Utilities Board. - AMY COX
  • Amy Cox
  • John Cassiani: Time to look at Utilities Board.
It looks like there will finally be a formal discussion of changing how Colorado Springs Utilities is governed.

John Cassiani, with civic group Colorado Springs Forward, says he on Wednesday again urged City Council, which serves as the Utilities Board, to open the debate over what type of governance the city-owned agency should have, repeating his pleas from a month ago.

While he says the discussion will steer clear of selling the power utility, which Mayor Steve Bach pushed for a couple of years ago, the goal is to analyze whether nine lay persons (Council) is the best panel to run the $3 billion to $4 billion agency.

"The good news is we got the board to agree to have public and community discussion about governance even though some members of the board don’t want to change," he says in an interview.

He notes the utility's debt limit, debt coverage ratio, funding of pensions and capital reserves will become problematic for Utilities in the future and that an independent professional board could better handle those issues.

"When you have revenues decreasing and expenses that are increasing and your debt limit is reached," Cassiani says, "you have to make some important decisions. Our question is, would it be helpful to have industry experts to help them make these decisions in the future?"

Cassiani notes it's unusual for a utility to rely on a board that doesn't have expertise in fields pertinent to water, wastewater, gas and electric services. "What we’re trying to say is, should we look at a different governance with a lot of professionals on the board, people who have been in the utility business, other professionals who can help with the strategic planning, risk management, as we move forward."

He says whatever is decided will need to be approved by voters through a change in the City Charter, and he says it's unlikely such a change would be formulated in time for the April 2015 city election. More likely is the city's April 2017 election.

Colorado Springs Forward, civic leaders who want to influence public policy, doesn't have a recommendation, he says, such as whether the board would be appointed by the Council or by the mayor.

"Whatever comes out of this discussion, the community is going to be involved," he says.

The ultimate goal, he says, is to have Springs Utilities "work hand in hand with the Regional Business Alliance" to attract and retain business and industry.

"Utilities is a terrific driver," he notes. "We want to make our utility the best it can be to make sure we have low rates and reliable power to attract business and retain businesses that are already here."

Cassiani says a majority of the Utilities Board directed CEO Jerry Forte to provide a plan at the November board meeting about how to go about having the discussion, with the public process beginning in January.

Asked about launching the discussion, Councilor Jan Martin says via email, "The topic of CSU governance keeps coming up so maybe it's time for us to finally engage in a community conversation. I'd much rather be a part of the discussions than sitting on the sidelines while the discussions take place. I honestly don't know what the best solution might be, but having the discussion will give everyone a chance to share their thoughts."

Ralph Braden, with Nor'wood Development Group, also has urged Council to study governance, which has been looked at several times over the years, including by the Utilities Policy Advisory Committee.

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