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Colorado Springs to study enlarging its boundaries

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Sterling Ranch lies northeast of Colorado Springs’ boundaries. - COURTESY OF COLORADO SPRINGS UTILITIES
  • Courtesy of Colorado Springs Utilities
  • Sterling Ranch lies northeast of Colorado Springs’ boundaries.
An urgent proposal seeking wastewater service from Colorado Springs Utilities for about 300 homes outside the city limits underscores the dilemma of how and when, or even whether, the city should annex property into a city that already covers 200 square miles.

The request comes from Sterling Ranch Metropolitan District, which was formed to serve 1,900 acres of land just beyond the city’s northeast rim where 5,800 homes could be built.

Developer Jim Morley planned to hook up the subdivision to a wastewater treatment facility in the Meridian Ranch area. But that sewer line isn’t finished, and buyers of at least 25 homes already built are ready to close, prompting the hasty request for city service.

In response, the city approved a stop-gap remedy July 23, to accommodate about 300 houses, but the situation led the Colorado Springs Utilities Board, comprised of City Council, to launch a closer look.

“We’ve all been talking about what do we want to do about the urban density development in the county,” Council President Richard Skorman says, noting developers are “gambling” with “fragile” underground aquifers that are being drained by growing populations.

“Twenty years from now, we’re going to be asked to bail them out,” he adds.

Embracing outside land might be preferable to inheriting subdivisions later with public infrastructure not up to the city’s standards or lacking entirely, Utilities Board Chair Jill Gaebler says.

But councilors agree the greater discussion must include El Paso County.

“It would also be most helpful if we could find agreement with the county on these policies, encouraging them to slow or stop unsustainable developments in the county,” Gaebler tells the Independent via email, “so our region can find ways to conserve water, and build a cohesive, connected, and sustainable region for all of us.”
Sterling Ranch unsuccessfully sought annexation several times in the last decade, according to Doug Stimple, CEO of Classic Homes, which controls the biggest share of lots in the subdivision.

The property sits immediately northeast of the massive 20,000-acre Banning Lewis Ranch. Though annexed in 1988, not much happened on BLR due to what developers considered burdensome rules, so the city eased developer requirements for BLR in 2018.

But most of BLR is controlled by one developer — Nor’wood Development Group — and with only about 4,000 other acres left in the city to develop, the northeast “is really the future of where this town is growing,” Stimple told the Utilities Board on July 17, arguing in favor of Sterling Ranch’s request.

Morley and home builders want immediate sewer service for about 300 homes, most not yet built, which eventually could be hooked up to a rural wastewater system to the east.

Staff noted in a City Council briefing that Utilities “has determined that wastewater for up to 700 lots in Sterling Ranch could be collected and treated in Utilities’ existing collection and treatment system with no adverse impact to Utilities’ existing infrastructure.”

But under the agreement, the developer must pay connection costs and the city will bill monthly charges at 1.5 times the rates charged to city customers.

In approving the service extension to 300 homes on an interim basis until the other sewer line can be finished, the city required Sterling Ranch to submit an annexation application within 90 days, triggering a process that could span nine to 12 months.

“It gives us the ability to put in the sewer connection on a temporary basis — a year — and gives us the opportunity to see if three or four developers involved can put an annexation agreement in place we can all live with,” Stimple told the Utilities Board. “If we don’t do it today, the opportunity is lost on virtually all of this. No one drove this. It just sort of organically happened.”

But whether those 300 homes would eventually be annexed isn’t clear. Morley tells the Indy he needs service to those 300 lots because the sewer line to the east, Meridian Ranch, isn’t finished and could take several months to complete. But he also says that sewer line might never be done if the property is annexed.

“It’s hard to say actually what will happen,” he says, adding he didn’t know yet whether he’ll seek annexation.
All that unsettles Council and the city administration, which will begin study in August about how to deal with outlying areas that could be destined for city annexation.

The city generally has viewed annexation with the question: What’s in it for the city? Commercial development that brings sales taxes, the city’s largest revenue source, have a greater chance for annexation. Property taxes from houses rarely supply the city with ample revenue to fund support services. (Using that logic, it might make more sense to annex Falcon’s business district than the overwhelmingly residential Sterling Ranch.)

After Banning Lewis Ranch was annexed, developers hop-scotched into the county and urban densities flourished, creating enclaves such as Falcon, which remain unincorporated but impose urban demands on the city’s roads, parks and flood control.

Skorman notes that due to county developments’ lack of transit, parks, stormwater facilities and other services, he wonders whether Sterling Ranch “is a prize we want.”

Because the city requires all those things and more, development can cost up to $30,000 per home more than in the county, he says. Unbridled growth in the county continues because county commissioners rarely, if ever, reject a proposed subdivision, he adds.

“This is driving the discussion we absolutely have to have,” Skorman says. “We probably should have had it 10 years ago.”

Commission Chair Mark Waller didn’t respond to a request for comment before press time.

Water shortages add pressure for annexation. Although county commissioners adopted a rule in the 1980s requiring developers to prove 300-year water supplies for their developments, it’s anyone’s guess whether underground wells will last, Gaebler says. Some signs signaling dwindling supplies already have emerged.

When water dries up, “Are we going to say, ‘I’m sorry, you have to drink bottled water’?” Skorman says.

Councilor David Geislinger said during the July 17 Utilities Board meeting that developers view Springs Utilities as “the utility of final resort” that will bail them out eventually. The city shouldn’t entertain piecemeal requests like Sterling Ranch, but plan for the next 50 to 100 years, he said.
Chief of Staff Jeff Greene says it’s time for the city to stop being a victim of county urban development. By imposing specific rules through annexation, the city can put itself in the drivers seat, he says.

If not, he adds, “We’re just a passenger — not even passengers. The cars are just passing us by here. There has to be some policy discussions between the mayor and Council to determine what steps the city’s going to take, which includes the enterprise [Utilities]. It also needs to be a regional discussion.”

Gaebler says the debate should center on what’s best for the city, and, ironically, that might mean further expanding the city’s borders.

“Would it be better for us to just annex earlier, which gives us control over development,” she asks, “or wait, knowing these districts will, at some point, need our water supplies?”

Regardless, several councilors and staff say it’s imperative the city and county cooperate on forming a strategy for how, or whether, the city grows its borders.

“Sooner or later,” Councilor Don Knight says, “we’re going to have to say, ‘These are our boundaries.’”

Though Knight voted to approve the Sterling Ranch deal, he’s skeptical.

“We’re talking 30,000 people,” he notes. “That hasn’t been in any of our utility planning at all. Who’s going to pay for that? Wishful thinking is not a valid strategy.”


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