The City Council on Tuesday rejected recommendations from a committee to raise the fees that developers pay when hooking up new homes and businesses to the city's gas and electric systems.
The city's Utility Policy Advisory Committee made its recommendation in response to concerns that existing ratepayers are forced to subsidize new growth in the city by paying for utility expansions through their monthly utility bills.
Springs Utilities expects to spend $1.6 billion over the next decade for system expansions made necessary exclusively by new growth. Of that amount, developers and builders are expected to pay only $500 million, leaving ratepayers to pick up $1.1 billion.
By 2013, the average residential ratepayer could be paying as much as $43 per month to subsidize growth, according to Utilities' own projections.
Mayor Lionel Rivera and Vice Mayor Richard Skorman spoke in favor of increasing the development fees for gas and electric service.
But a majority of council members said those increased fees would be passed on to new homebuyers, making housing less affordable. The city could also be less competitive in attracting new businesses, some council members reasoned.
Moreover, the proposed changes would only lower the average residential utility bill by $2 to $3 per month.
"I don't see that it's a good business decision," said Councilman Larry Small. "Over time [it] produces absolutely no value to the ratepayers."
Councilman Jerry Heimlicher said a "lack of community outcry" on the issue demonstrated that higher development fees were being pushed by a handful of people who oppose growth.
"A lot of this is very thinly disguised anti-growth," he said.
A recent poll by Springs Utilities, however, indicated that a majority of ratepayers want developers to pay more.
Council members Small, Heimlicher, Darryl Glenn, Scott Hente, Margaret Radford and Tom Gallagher voted to kill the proposed fee increases, over the objections of Skorman, Rivera and Councilman Randy Purvis.
A majority did agree, however, to continue studying whether Utilities should raise development fees for water and wastewater service.
Rivera called it "alarming" that many other utilities in Colorado charge water and wastewater development fees that are several times higher than those charged by Springs Utilities.
"The city of Colorado Springs is substantially below its peer cities," Rivera said.
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