The city has come to terms with the Environmental Protection Agency (EPA) and state water quality regulators by agreeing to pay a fine of $2.125 million to settle the lawsuit filed in 2016 alleging the city violated the Clean Water Act by neglecting its stormwater drainage system.
According to the agenda for City Council's Oct. 27 meeting, there are sufficient funds to pay the fine, but the backup information for the agenda doesn't identify the source.
"The City Attorney has negotiated a litigation settlement in Case No. 16-CV-02745-JLK that is in excess of $100,000 and that is contingent upon City Council approval of the settlement amount. The lawsuit alleges claims for permit violations against the City of Colorado Springs. The settlement amount is $2,125,000," the agenda item says.
That case number is the one belonging to the lawsuit filed by the EPA and the state.
What's unclear from the agenda item is how much the city might have agreed to spend for additional stormwater improvements, if any, to settle the case.
As Mayor John Suthers told the Indy last month, any amount the city agrees to pay to further invest in its stormwater system will come from the stormwater enterprise. That entity is funded by voter-approved stormwater fees, which became effective in July 2018. Those fees can be increased by Council without a vote of the people if necessary to satisfy a regulatory consent decree or judgment.
Now, fees sit at $5 per residence per month and $30 per acre per month for other classes of property.
While there is no mention of an allocation in the 2021 budget to settle the lawsuit, Suthers told the Indy last month, "It will be paid for out of the stormwater enterprise.”
What the fees cannot cover, Suthers said, is any fines imposed as part of a settlement. Those likely would come from the city’s reserve fund, which stands at about 19 percent of the total budget.
The $2.125 million figure cited in the agenda item most likely is the penalty, and not the long-term investment figure.
It's unclear when that figure will be revealed publicly.
Sources tell the Indy the city wants to keep certain information about the settlement under wraps until the Oct. 27 meeting. The U.S. District Court case shows no filings since August when the parties noted they were pursuing negotiations, as we reported here.
In 2016, the city agreed to spend $460 million on its stormwater system over a 30-year period in an agreement with Pueblo County, which complained of unbridled flooding in Fountain Creek due to the city's insufficient stormwater system.
After voters approved imposing fees, the city shifted general fund money dedicated to the Pueblo agreement to public safety, notably to hire additional cops and firefighters.