Photo by Daniel J. Chacón

Former Mayor Lionel Rivera says the city has “plenty of options” to fund stormwater, which the city has largely put off since the City Council put a bullet between the eyes of the Stormwater Enterprise.

But one of the options suggested by Rivera — a tax increase — probably won’t see the light of day.

That’s because Mayor Steve Bach signed a no-tax pledge before he was elected.

Bach has sounded the alarm on the city’s half-billion-dollar stormwater needs and wants the City Council to look for inefficiencies at Colorado Springs Utilities to help pay for them.

Stormwater is responsibility of the city government that’s placed under the authority of the mayor.

“There are plenty of options, but difficult ones if you pledged not to support a tax increase,” Rivera said in an email.

Of all the City Council members who ran for office last year, only Councilwoman Angela Dougan signed the pledge, which was issued by the Colorado chapter of Americans for Prosperity.

The previous council eliminated the Stormwater Enterprise in December 2009 following the passage of ballot Issue 300. The vote was 5-4. Rivera was among the four council members who opposed eliminating the enterprise.

Here is the full text of Rivera’s email, with a few minor edits:

The mayor, with the support of City Council, can put a stormwater department in place with a similar fee as the enterprise and accomplish it through the legislative process. It wouldn’t be an enterprise, but it would subject to TABOR.

He could ask the City Council to develop a rate structure through (Colorado Springs Utilities) to support paying  for stormwater infrastructure. Even if there are cost savings that could pay for stormwater, he would have to advocate using the cost savings verses reducing rates.

If a small mill levy is the answer, then he would have to advocate for a tax increase.

The only way to get this done without a fee or tax increase is to grow municipal revenues or create efficiencies of $16 million annually in the municipal budget. I use $16 million because that is what the SWE fee generated.

If City Council can squeeze some savings from CSU and agree to cover some of the costs, then they would need to have a rate hearing to create the tariffs to justify and use the funds. The public would probably view this as a rate increase.

There are plenty of options, but difficult ones if you pledged not to support a tax increase.

UPDATE: Stormwater is a municipal government obligation. While Mayor Steve Bach has said that city staff is looking for efficiencies within the existing budget to help pay for stormwater improvements, the mayor has not laid out a specific plan on how to pay for them.

The City Council is under pressure to come up with a funding mechanism to pay for Colorado Springs’ massive stormwater needs, which the city has largely put off since voters demanded an end to the Stormwater Enterprise more than two years ago.

While the contentious issue resurfaces from time to time, City Attorney Chris Melcher warned city officials in March that stormwater required immediate attention, especially since a permit to build the Southern Delivery System water pipeline was at stake.

Melcher presented Mayor Steve Bach and council members five options, including making stormwater a responsibility of Colorado Springs Utilities, which is building the 62-mile pipeline between Pueblo and Colorado Springs, and asking voters to pass a tax.

The mayor and council agreed in March to continue the discussion in 90 days.

Since then, the Board of Pueblo County Commissioners, which issued the so-called 1041 permit to build SDS, wrote a letter asking that Colorado Springs take immediate action.

During his monthly press conference on Tuesday, the mayor stressed the importance of addressing the city’s unfunded stormwater capital needs, which are estimated at a half-billion dollars.

Here’s the video:

Click here to view the embedded video.

The city’s ongoing efforts to collect past-due stormwater fees will be the subject of a closed executive session Thursday among the El Paso County Board of County Commissioners.

The five commissioners will discuss “legal issues associated with the collection of the stormwater fee,” County Attorney Bill Louis told The Gazette on Wednesday.

Earlier this year, the City Council decided that delinquent stormwater fees would be certified to the El Paso County Treasurer’s Office for collection on the 2012 property tax bills.

In 2009, the previous council tried the collect delinquent stormwater bills through the county and then retreated.

After the city said it wanted to turn over past-due accounts to the county treasurer for collection, Louis sent a letter to then-County Treasurer Sandra Damron warning that the city-owned Stormwater Enterprise might not be entitled to use the treasurer’s office to collect the fees.

“Although hospitals and golf courses are operated by the private sector as well as by the public sector, there is no private sector hospital or golf course that can avail itself of this coercive power,” the letter stated.

The city delivered hundreds of past-due stormwater accounts and a certification letter signed by council President Scott Hente in recent days, city spokeswoman Mary Scott said.

“We do not have an official response from the county regarding them,” Scott said.

Not all past-due stormwater accounts have been certified to the county for collection. Read more about those accounts here.

Mayor Steve Bach wanted a $1.5 million contingency fund for 2012.

The year hasn’t even started and his proposed contingency has been whittled down to $300,000.

The city’s Budget Office says there are various reasons for the decrease in the mayor’s proposed contingency fund, including the decision to get rid of the red-light cameras.

That decision is going to cost the city $530,000 in revenue.

The cameras were expected to generate about $65,000 in revenue monthly, or about $780,000 for the entire year. But expenses for the program totaled about $250,000, so the net revenue for 2012 was projected to be $530,000.

The City Council’s recent decision not to collect certain past-due stormwater accounts through property tax bills is also shrinking the mayor’s proposed contingency fund.

The council decided not to send accounts owing less than $20 to the county treasurer this year. Accounts under $20 total $65,000, not $50,000 as originally reported by the city, Budget Manager Lisa Bigelow said.

The council also decided to figure out a different way to collect on properties with unpaid stormwater fees that have changed ownership on or after January 2010. The city stopped billing stormwater fees in January 2010, and the council wants to hold the previous owners, not the new owners, accountable for their past-due fees. Those accounts total about $95,000, Bigelow said.

For new owners who already paid past-due stormwater fees on properties they purchased on or after January, the city plans to issue refunds. The refunds total about $85,000, Bigelow said.

In addition, Bigelow said the city doesn’t anticipate collecting from the federal or county government or nonprofits. Those accounts total $155,000, she said.
“We don’t think we’ll be collecting those,” she said.

Bach, who is the city’s first strong mayor, wanted the contingency fund for “unanticipated or emergency items.” The contingency fund is separate from the city’s rainy-day fund, which essentially serves the same purpose.

Other factors that are taking a bite out of the mayor’s stash:

The costs of the streetlight program came in lower than budgeted, from $4.5 million to $3.8 million. But the city has taken a big hit with copper thefts and is budgeting $520,000 to replace the copper in the streetlights and get them working again, Bigelow said.

Who pays to replace the copper – the city government or Colorado Springs Utilities – is still up for debate, she said. But, for now, the city is going to budget the expenditure.

The city is also budgeting for a $120,000 study for “development standards,” though the city is also in discussion with Springs Utilities about who will pay for it, she said.

“We’ve been working with Utilities to look at development standards related to when a development occurs, how many streetlights do we really need, should we be looking at LED streetlights, things like that,” she said.

After the public hearing on the proposed 2012 budget on Thursday night, Mayor Steve Bach defended his plan to allocate a $1.5 million discretionary fund for his office.

His stance is the subject of today’s Quote of the Day.

“I guess it comes down to, ‘Can you trust a mayor to spend $1.5 million?’ If we can’t, we better get another mayor.”

Since it’s Friday, I’ll offer up a runner-up for Quote of the Day.

The source: It has to be the mayor again.

The mayor was talking about the council’s recent decisions about past-due stormwater fees and how they’ll affect revenue projections for next year.

The mayor couldn’t help but point out that the decisions were made in closed session, which violated the open-meetings law.

“Council just decided illegally, excuse me, apparently, allegedly, excuse me, according to (The Gazette) , council just decided we’re not going to collect all that money,” Bach said.

Colorado Springs City Councilwoman Lisa Czelatdko is claiming she was one of three council members who voted against collection efforts of unpaid stormwater fees that have sparked a public outcry.

But the truth is that Czelatdko actually voted against placing the past-due stormwater fees on property tax bills sent out by El Paso County.

“I was 1 of three Council members that had voted NO to these stormwater collection fees. Stop calling and yelling,” Czelatdko wrote yesterday on Facebook.

“I was 1 of the 3 Councilmembers who voted NO to these Stormwater collections methods. Just saying,” she said via Twitter.

Czelatdko did not immediately return a call for comment.

Here are the facts:

Last year, the previous City Council decided to pursue, through its collection agency, what was then about $1.86 million in unpaid stormwater fees from about 11,500 accounts.

The agency, A-1 Collections Inc., was poised to receive 30 percent net of collections on regular accounts and half “for accounts where legal action is taken to collect,” according to city documents.

The collection agency’s efforts have led hundreds of delinquent property owners to pay up.

Others are putting their foot down.

In August, a majority on the new City Council voted to collect past-due stormwater fees by placing them on tax bills sent out by the county.

The vote was 6-3, with Czelatdko and Councilwomen Angela Dougan and Brandy Williams voting in opposition.

In summary, Czelatdko couldn’t have voted for pursuing the unpaid stormwater fees through A-1 Collections because she wasn’t in office at the time.

But, to be totally fair, she did vote against the only collections issue she had an opportunity to vote on.

Ric Mills, the vice president and chief operating officer of A-1 Collections Inc., defended his company’s collection tactics in an open letter to Colorado Springs residents yesterday.

“I will not apologize for my company pursuing these debts or the manner in which we collect. We have operated within the boundaries of the law and will continue to as we pursue these and other debts,” Mills wrote in the letter.

Councilman Bernie Herpin thanked Mills for providing a “great explanation.”

“As a person who paid his storm water bill and an elected official, I agree 100 percent,” Herpin wrote in the email, which he also sent to The Gazette.

“People don’t seem to realize this recent collection effort was as the result of a court order.  And, the media seems to have decided not to make that clear in order to sensationalize the story,” he wrote.

¿Qué?

In a follow-up email, Herpin acknowledged that the story that appeared Saturday in The Gazette was “factual, fair, and balanced.”

“Early on when the story first broke, the media was not so quick to point out what you did for the basis of the collections,” he wrote.

Here’s the full text of the letter that Mills issued yesterday:

September 26, 2011

To The Citizens of Colorado Springs:

Over the weekend I have read the stories, comments, and blogs, watched the news, and listened to the talking heads on the radio along with their callers and I feel it is necessary to rebut the misconceptions, fallacies, lies, uninformed, uneducated, ignorant and outright idiotic statements I have seen and heard about my agency, the judges, the sheriff and the city government. Although I cannot address any specific case or account due to disclosure laws, I will try my best to explain our collection processes and our position on these matters.

First of all we are not Nazi’s and there is no Gestapo. Any comparison is implausibly dim-witted and beneath rational discussion and those who made this comparison should be ashamed. Especially the tea partiers and conservatives, of which I am one, who have been whining and feigning outrage for years about the attacks from the left on your character and business practices; yet here you are. To argue against government debt but in the same breath argue that the government should not collect the money owed to it is absurd. Whether you agree with the debt is inconsequential. It has been found to be legal and owing by the courts and we were hired to collect it. If the 3 or 4% of you who did not pay this fee want to engage in civil disobedience that is your right and it is the right of the city and its collection agency to go after you and collect that which is owed. You are not victims. There is no police state. This is not Germany 1936 or a precursor to debtor’s prison. This is not Birmingham circa 1963, you are not MLK and we are not Bull Connor. This wasn’t actually said. It just seems like the next logical crazy statement in the poorly advised hyperbole train that is all too common today.

Secondly we have been in business and lived in this city for decades and so have our employees and their families. We resent the implication that we are some fly-by-night criminal organization sending the police to “steal” from you. The courts have found in our, and thus the city’s, favor on the validity of these debts in numerous cases including but not limited to mediations and trials.  We have judgment against these debtors and we have the right to use any lawful means to collect a debt. Numerous attempts were made to contact debtors via mail and phone before legal actions were taken. All legal actions were taken with the permission of the city and all debtors and places of businesses are served in advance. All debtors have the right to file an answer and battle their debt in court. Once the judgment is filed we decide how we pursue payment, not the city. This includes property liens, garnishment of wages, and yes, even a till tap. Our contacts at the city were notified that these types of actions could be used.  Most accounts never reach legal action, not to mention the measures that have garnered so much recent press. We would rather not have to use these remedies, but if payment is not made we have very few paths by which to seek payment. We have a business to run and an obligation to our client.

I understand the issue many of you have with these tactics but they are legal and unfortunately, sometimes necessary. A till tap can be requested by anyone who holds a judgment against a business, not just collection agencies. We do not buy debt and we do not charge exorbitant fees and we certainly don’t collect every dollar placed with us. If a debtor refuses to honor the requests for payment or the judgments against them we must take remedies to recoup monies lawfully owed. Now a debtor may not agree that a debt but it is owed, but once a court enters judgment and finds that the money is due, there is no further argument. The right and honorable thing to do is pay it. If a debtor pays or makes payment arrangements no further collection activity is required. I will not apologize for my company pursuing these debts or the manner in which we collect. We have operated within the boundaries of the law and will continue to as we pursue these and other debts.

For those of you clamoring for a refund of all fees and a forgiveness of these debts please stop and think for a moment. Total outstanding debt is about a million dollars. Fees already paid voluntarily or collected: over $40 million. Now understand the city spent that money. In order to issue a refund the city would necessarily have to raise revenue somehow. That will either be in the form of a loan, which we the Taxpayer will repay, severe cuts to city operating budgets, by another fee, or by tax increases. Those are the only funding sources municipalities have. So why not just forgive the debt of the last few? Simple, they owe it. Not to mention that it might open the city up to lawsuits from the 96-97% of us who paid the fee seeking to get our money back. So we’re back to $40 million again not to mention the cost of defending these lawsuits for years to come. Those costs will have to be paid by us, the Taxpayer.

Whether you agree with the original Stormwater ordnance is immaterial. The fact is it was not an illegal tax; it was ordinance with fee structures. From 01/01/2007 to 12/31/2009 the ordinance was in effect and any payments not made are considered to be owed and should be collected. Those of us who voluntarily paid this fee should not have to cover the cost of those who are willfully disobeying the law.

As to our D- rating from the BBB I’m not sure how this rating was arrived at. We have had 2 complaints in three years. One was Stormwater related. If we failed to answer a complaint I apologize. It was an oversight and it is being investigated and answered as you read this. We had an A+ before Stormwater and I will see it restored as well as the reputation of my company. That being said our answer to Stormwater complaints of any kind is contained herein. Many of you may not like this explanation and it may not meet your satisfaction. That is not something I can control and it is certainly no reason to drop our rating so precipitously. We run our business within the confines of the law and our employees abide by all state and federal regulations. Now if you do not like the regulations…work to change them. Don’t name-call and compare hardworking American small business people, elected officials, and law enforcement officers to Nazi’s or mobsters. It makes you look foolish and detracts from your argument. Collection agencies provide a valuable service and return tens of billions to businesses and civil authorities annually. This staves off cost increases and fees that would eventually be passed on to you the consumer, and in this case, the taxpayer. If you want collection efforts to stop, pay the bill. Just like 96-97% of your fellow citizens did and our efforts will cease. We are a collection agency hired to collect a debt and we will continue to do our job. Thank you for the opportunity to address these issues.

Sincerely,

Ric Mills

Vice President/COO

A-1 Collections, Inc.

El Paso County sheriff’s deputies have been ordered to stop raiding the cash registers of businesses that have unpaid Stormwater Enterprise fees.

“I have put a hold until further review,” Sheriff Terry Maketa said today in an email.

Sheriff’s deputies armed with a court order obtained by A-1 Collections Inc., a collections agency hired by the city of Colorado Springs, emptied out the cash registers of at least two Ace Loans pawn shops Friday, according to employees.

“It’s the stormwater troopers,” Assistant Manager Charley Bliss said Friday.

Ace Loans owes the city about $15,000 in unpaid fees from the now-defunct Stormwater Enterprise.

Click here to read more about what happened at Ace Loans on Friday.

In the email, Maketa said he is not a fan of so-called till taps in which deputies execute a court order to seize cash and coins  from a business that owes a debt.

Maketa said he believes it’s an outdated practice.

“I did have my attorney review the court documents, and they were lawful orders of the courts, and I am bound by those orders under Colorado Law,” Maketa wrote.

“Having said that, the order doesn’t mention the exact date of service, so as of yesterday evening, I have put a hold until further review,” he wrote.

Maketa also said he spoke with Colorado Springs Mayor Steve Bach and a member of his staff,  who “were not aware of this tactic being used by their contractor and they both expressed great concern,” Maketa wrote.

“Based on that information, I think the responsible thing to do is to offer an opportunity for our city to review this contract and determine if it is a practice they wish for their contractor to engage in.  I personally do not believe it is, but I could be wrong,” he wrote.

Maketa was responding to an email from anti-tax activist Douglas Bruce and said he was “sure” that city officials would have many of the same questions that Bruce raised to Maketa in an email.

Will City Council help David Parris?

Colorado Springs city officials unleashed a torrent of backlash when they created the Stormwater Enterprise.

Even though the fees were set to zero last year, the enterprise is still a source of resentment.

For homebuyer David Parris, the enterprise is a source of frustration.

“I just received a letter from the Stormwater Enterprise stating that I owe them about $55. This fee would have been from 2009 or earlier,” Parris wrote in an email to The Gazette.

“The problem is that I purchased this house in June of  2010, six months after City Council abolished this fee. They did not place a lien on the house for this money or else it would have showed up and been settled during the closing process,” he wrote.

The subject line of Parris’ email was: “Revenge of the Stormwater Fees?”

Parris agreed to share his email with Gazette readers and City Council members.

“While the fee they say I must pay really is not that big, I am more concerned that a lot of other new homeowners are being treated the same way,” he wrote.

Here’s the rest of his letter, with a few minor edits:

I have tried to contact them about this but only get a prerecorded message that basically says pay up or we will assess interest and penalties. I have left the two phone messages and not been called back. I have even emailed them and they have not replied to those either. This letter was dated on the 19th and it states I must pay this within ten days or else, and I received their letter on the 21st.
I imagine that there are a fair number of new home owners who have received their own letter from the city. So I am sure this issue is bigger than my complaint. I was wondering if you would be the right person at the paper to look into this question or should I write to someone else?
I was not against the Stormwater Enterprise, but I really don’t think what they are doing is legitimate. I did not incur those fees, nor was I informed of them when we purchased the property (and it would be silly to expect a home buyer to intuit what unpaid fees the previous owner incurred). For the city to expect me to pay a fee that is over two years old because they could not collect from the previous owner is outrageous. They are basically saying I have to track that person down and get the money because they couldn’t or just shut up and pay them for him.
Any help, suggestions, or light you could shed on this issue would be greatly appreciated.

David Parris

Mayor Steve Bach

Mayor Steve Bach covered a lot of ground yesterday in his speech at the first-ever Latino Community Luncheon.

Bach talked about the challenges facing city government, including a backlog of up to $1.1 billion in stormwater and other infrastructure.

But he was also optimistic, saying that if the community pulled together, Colorado Springs could be a model city.

“I’m all about solutions,” he said.

Bach also shared an interesting story about a phone call he received just two weeks into the job from one of his “strongest supporters”  on the campaign.

“This supporter said, ‘Steve, I just have to tell you there’s a lot of concern out here among some of your supporters about your early decisions,’” Bach recalled.

“I had been in office two weeks. I said, ‘Well, tell everybody to take a deep breath. It’s probably going to get worse.’ Not on purpose,” Bach said.

Other highlights of the mayor’s speech:

Bach said rumors are circulating that he’s going to “slash” city salaries by 50 percent. They’re not true, he said.

Bach said city staff have found a “few million” dollars in efficiencies for 2012. He said it was a good start but that “hard discussions” were looming.

“Basically, we either need to increase our revenue by at least $10 million a year or cut our expenses by that much to be solvent here in a few years,” he said. “Any ideas would be welcome.”

Bach said Colorado Springs must have a city leadership that is fiscally responsible.

“We must build up our reserve for that rainy day. The next recession will come. Many economists think in 2014,” he said.

When asked about recent decisions by the City Council, including the massive USOC mural/billboard, Bach initially sidestepped the question.

“I was hoping they would put my name on it,” he joked.

“As for the mural and so forth, you know, from this point forward, we need to get on with the fundamental priorities,” he said later.

Diversity in the workforce was a hot topic.

“I want to see action steps, not quotas, but how are we going to drive toward the ultimate result that our city government is going to reflect our community,” he said.

Bach met recently with former Mayor Mary Lou Makepeace, who is now vice president of the Gay & Lesbian Fund for Colorado.

“We just talked about how I can get to know more people from that part of the community and get their thoughts and concerns and learn what are the barriers that are thrown up,” he said.