In 2006, Chip Landman bought a dilapidated building out of foreclosure and started making plans to restore it — exactly the kind of “infill” development City Hall has promoted for years.
Due to the recession, the building sat until 2009 when Landman learned from Colorado Springs Utilities that it would cost him thousands to reconnect the water and sewer services, which had been shut off when the bank took the property back years earlier.
The huge cost of essentially turning a water valve created what Landman called “a chilling effect on redevelopment of old blighted properties.”
It seems most of the Colorado Springs City Council agree and will consider slashing fees for restoring utility service based on sweeping changes suggested by Utilities staff.
“I’ve heard support for bringing this forward to City Council,” council President Scott Hente told the staff at an Oct. 19 meeting of the council, sitting as the Utilities Board. The council is expected to consider the new fees Dec. 13.
Besides making it cheaper to redevelop commercial property, the proposed fee reductions would apply to residential properties, which have gone into foreclosure by the thousands.
For decades, Utilities didn’t charge to restore utilities unless a property sat disconnected five years or longer. At that point it was deemed abandoned and fees imposed.
In 2006, the codes changed and service was not considered abandoned until 10 years elapsed. Also, Utilities instituted a two-year grace period, after which service restoration fees were imposed. Beginning in 2010, the abandonment period was extended to 20 years.
Under the proposal Utilities proposed, the two-year grace period would grow to five years. And fees would drop. For example, instead of paying about $10,000 to reconnect residential service deemed abandoned, it would be capped at $3,008.
Savings would be even greater for commercial customers. For a 2-inch meter inactive 10 years, reconnection would drop from about $14,000 to about $4,600. And restoring abandoned service would plunge from the current $116,000 to $14,000.
The proposed fee reduction is welcome news to neighborhood activist Dave Munger, president of the Council of Neighbors & Organizations. He said he’s heard many complaints about the fees.
“It’s in everyone’s best interest to figure out ways to encourage infill,” Munger said. “I’m glad to hear Utilities is rethinking its position on reconnection fees.”
It’s unclear if the new fees will help Andrew Knauf, who turned off utilities in 1993 to a house he owns on West Pikes Peak Avenue.
When he tried to restore water and sewer a few months ago, he was told it would cost more than $11,000. He is appealing.
“We’re talking about turning a valve,” Knauf said. “I can’t afford $11,000.”