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Colorado Springs Considers Major Reform Proposals To Mitigate Conflicts Of Interest In Utilities Management

The Colorado Springs, Colorado City Council will consider three new ordinances today which concern the establishment of an independently elected utilities board, an independently elected City Attorney, and the removal of utilities contract authority from the Mayor.

The ballot proposals, which are expected to receive a vote today, are a response to the debate over the Martin Drake power plant which provides 254 megawatts of power generation for over 50,000 businesses and homes, the threat of suit from the Sierra Club and the negotiations City Attorney Chris Melcher has engaged in with them, as well as the fate of the Neumann Systems Group (NSG) contract to provide scrubber technology proven to capture 95% of the sulfur emissions created by burning coal for energy.

Under current law the City Council acts in the dual role of utilities board along with the Mayor acting as an ex officio non voting member and retaining the sole authority for all contracts. Additionally, the City Attorney is currently appointed by the Mayor and is required to represent not only the Mayor, but the “City Council, its Appointees and Enterprises, including Colorado Springs Utilities and Memorial Health Systems  its boards, commissions and committees, and its staff members in the conduct of City business.”

The concepts proposed in the ballot initiative were borrowed from the American Public Power Association’s (APPA) model charter. In reflection of the APPA’s charter, the structure of the proposed utility board would consist of seven independently elected members limited to three consecutive four year terms. All necessary powers currently afforded to the city council would be transferred to the newly elected utility board. Additionally, a super majority vote of the people of Colorado Springs would be required for the sale of the city’s utilities or any of its assets.

Proponents of reforming the structure of the utility board, the selection of the city attorney, and the contract authority the mayor currently holds over CSU, believe these proposals will mitigate against the politicization of the city’s utilities and general conflicts of interest. An elected city attorney can avoid the inherent conflicts of interest an appointed city attorney faces when tasked to represent the mayor, the city council, and the municipally owed utilities. The proposed reform and relieves the city council from the dual mandate of managing the city along with the municipally owned utilities.

Patrick Davis, a local Colorado Springs consultant who has represented NSG and a supporter of the reform proposals, stated that “The ballot proposal to elect a utilities board is a common sense proposal that will add much needed corporate structure to our 1 billion dollar corporate utilities infrastructure here in Colorado Springs.” Davis went on to say that, “electing our city attorney and utility board independently will go a long way to eliminating the corrosive conflicts of interest that exist under our current form of utilities management.”

As previously reported by Media Trackers, NSG CEO Dave Neumann believes that Melcher, and by extension Mayor Bach, negotiated an agreement with the Sierra Club that “resulted in an agreement which partially or wholly suspends our contract.”

Neumann has also filed an ethics complaint with with the City Attorney’s office regarding Council Member Tim Leigh. Media Trackers inquired with the City Attorney’s office via a Colorado Open Records Act (CORA) requests on multiple occasions leading up to the publication of this article, at no time did the City Attorney’s or Communication’s office acknowledge that a complaint had been filed or provide documentation of such a filing.

The four page complaint, addressed to Melcher and sent on November 27, 2012, is focused primarily on the inherent conflict of interest for Leigh, who co-founded the well known commercial real estate brokerage Hoff & Leigh in 1987. Additionally, the complaint lists examples in order to establish a pattern of behavior by Councilman Leigh which raises the appearance of impropriety.

The Code of Ethics, which all elected officials and city employee’s must abide by, notes that those covered shall not “engage in any activity that may create, or does create, the appearance of impropriety.” The Code of Ethics also states that those covered shall not “participate in any matter involving the City where they or a member of their family has a direct or indirect substantial financial interest.” It goes on to note that “[i]f a direct or indirect substantial financial interest exists, the covered person shall make known that interest.” (Ethics Code § 1.3.106.)

Neumann alleges in his complaint that Leigh “began making false and libelous statements about NSG in his “Weekend Market Report”,” which is issued through the real estate brokerage Leigh co-founded. The complaint details 5 specific instances in which Leigh used the “Weekend Market Report” to make derogatory statements about Neumann, his company, and the Drake facility in general.

The third example Neumann provides in the complaint alleges Leigh suggested Colorado Springs should start looking to redevelop land around the Drake plant into a baseball stadium, done again through Leigh’s “Weekend Market Watch.” The complaint goes on to note “Mr. Leigh’s financial interest in the redevelopment of the land surrounding the Drake plant is obvious, particularly where his company, Hoff & Leigh, issued the June 19 and July 15 Reports and currently lists no less than
six properties on its website that are located near the Drake Facility.”

According to the Code of Ethics, anyone may file a complaint or request the Independent Ethics Commission do an inquiry in to “a matter involving an elected official, an appointee including members of boards, committees and commissions appointed by City Council or the Mayor, or an independent contractor” through the City Attorney.

IEC members, of which there five, are appointed by the City Council. The IEC considers all complaints, or requests for inquiry, that regard possible violations of the Code of Ethics within the last twelve months.

The IEC is given the authority to subpoena documents and witnesses, and provides recommendations to the City Council. Upon recommendation of the IEC to City Council, those found to have breached the public trust are subject to penalties up to, “double the amount of financial equivalent of any benefits obtained by such actions.”

The reform proposals need five votes in order to pass the city council and move to a citywide ballot in April. While opponents reacted quickly and negatively to the proposed reforms, proponents are hopeful for a victory at today’s City Council meeting, which comes to order at 1pm.

This post was originally published at Media Trackers Colorado.

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