Denver, Peter Blake

Blake: Denver Water's empire building

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Denver Water operations redevelopment site, August 26, 2016. Photo courtesy of SenseraSystems.com.

Denverites are shelling out more to pay city council members, whose salaries went up last month to $91,915 a year (plus an extra $11,000 for President Albus Brooks). Meanwhile, they’re also coughing up more for their water this dry summer, partly to pay for the water department’s numerous new facilities. There’s no obvious connection between these two price increases.  Council has nothing to do with the water department.

But maybe it should.

When not settling zoning issues and signing off on city contracts, council seems to be rubber-stamping huge payouts to prisoners abused by the police and the sheriff’s departments…

…and a payout to an assistant city attorney who was mysteriously involved in those jail abuse cases.

…and, soon, a payout to a former aide of Mayor Michael Hancock who was apparently wrongfully fired after sexual harassment claims.

Details on the hush money payouts are very hush-hush.  But suing the city and settling for large sums with the trial-averse city attorney’s office is a profitable little cottage industry for some lawyers.

icon_op_edWhy pay big bucks to council members who turn around and authorize even bigger bucks to other people?  Maybe the council should earn its keep by suffering some periodic heartburn. Such as having to make tough votes on water rates.

A recent Denver Post story recounting customer unhappiness with higher Denver water rates this summer — and a response posted on the water department Web site by a spokesman — managed not to mention one of the reasons for the hikes.

And that is the huge construction project under way on the department’s 35- acre “campus,” as they like to call it,  at 1600 W. 12th Ave. It’s tucked away in an industrial area on the near west side of town, well out of sight of most ratepayers.

Details were sketchy last winter when the department announced the $195.8 million project. But the general contractor, Mortenson Construction, isn’t shy about its work and has put the details on its Web site.

The project includes:

* Warehouse: 29,000 square feet.

* Trade shop and central plant: 41,000 square feet.

* Administration building: 187,l00 square feet.

* Wellness center: 8,000 square feet.

* Meter shop: 16,000 square feet.

* Fleet building: 28,000 square feet.

* Wash station: 7,000 square feet.

There will be 11 new structures in all,  including a parking garage, plus the renovation of  a few historic old buildings.

Completion is scheduled for late 2019.  A water department spokesman said that because the project is being paid for by 30-year bonds, the cost per household bill per month will be about $1.31.

The Aurora Water Department, squirreled away on the 3rd floor of its city hall, can only envy the empire building of its larger neighbor.

Aurora, according to its water department spokeswoman, hasn’t raised rates in six years. Perhaps this is in part because the rates must be approved annually by city council, whose members have to stand for re-election.

Denver’s water policies and rates are set by five commissioners who are appointed by the mayor for six-year terms. They are invariably good citizens from the upper classes. The current board includes two well-known attorneys, two foundation presidents and a Realtor.

They certainly aren’t in it for the money.  All they get is $600 a year, or $25 per semi-monthly meeting.  But they have no skin in the game.  They’re too far removed from voters to suffer consequences for their votes. Like regulators everywhere, they tend to identify with the business they regulate.water-poverty

Which may  help explain why Denver water rates have gone up every year for 25 consecutive years.  That means they rise even when demand is down — and conservation propaganda has been so successful that demand has sometimes dropped from year to year.  In competitive industries, when demand is down, prices tend to fall.  But if you have a monopoly, you can raise your rates to keep the revenue up. And that’s what Denver Water does.

To be sure, Denver’s rates are lower than those in most of its suburbs.   Aurora has its own system, but Denver supplies most of the others.  Its water rights are senior and therefore cost less than junior rights.  Also, Denver is bound by its charter to charge suburban customers more than it does its own residents.  No wonder Denver’s Democrats felt the Bern during the recent presidential primary.  When it comes to water rates, they have a proper socialist approach: Soak the suburbs!

Normally, having politicians set prices is a very bad economics.  But if  a government has a monopoly on product, it’s best if prices are set by those who have answer directly to voters.  Denverites — and suburbanites —might pay less for water if the city council set the rates.

Longtime Rocky Mountain News political columnist Peter Blake now writes once a week for CompleteColorado.com. Contact him at pblake0705@comcast.net You may re-publish his work at no charge and without further permission; please give full credit to Peter Blake and www.CompleteColorado.com.

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