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Getting hosed



All they want to do is fix up an old house they own next door, for their daughter to use. But to do that, Sandra and Andrew Knauf must shell out $11,160 to Colorado Springs Utilities to reconnect water and sewer service.

The charge stems from an obscure requirement that people pay "development fees" if they reactivate service to a property that's been offline for a period of time.

Had the Knaufs known about the fees, they say, they would have kept the utilities on and paid the minimum, or reconnected the house before the five-year grace period ended. Now, their best hope for avoiding the high charge lies with Colorado Springs City Council, which doubles as the Utilities Board.

"This basically shot down all our plans for our whole family, 'cause we don't have $11,000," says Sandra Knauf, who describes the family as lower-middle-class.

Utilities counters that forgiving the fees would amount to unfair treatment, because other customers have been paying their fair share of capacity charges all along.

Used for storage

The Knaufs bought the stucco house at 1825 W. Pikes Peak Ave., in 1990. Three years later, they bought the home next door; they've lived there ever since. The first house was occupied off and on by some relatives until 1992. Then the couple had the utilities disconnected, having decided to use the 115-year-old bungalow as a storage facility for Andrew's one-man heating and air conditioning business.

But through the years, the Knaufs say, they kept up the property, putting on a new roof and making other improvements. They paid their taxes and remitted stormwater fees.

Earlier this year, their daughter Zora decided to return from college, pursue a degree online, and live in the house. The 19-year-old started fixing up the place, painting, cleaning and helping refinish the wood floors.

Re-establishing electric and gas service was a breeze, costing only $168 for both, Sandra says.

But water and sewer was a different story. "I thought to have it turned back on would probably cost $200," Andrew says. During a cellphone call with Utilities, Andrew learned a wastewater connection would cost $9,292, and water, $1,868. "I'm driving down the road," he says, "and I have to pull over."

"It's not like it's a new lot, a new home," he adds. "This is already connected to the system."

What really sticks in the couple's craw, though, is that they were never advised of the fees when they had the home disconnected. How much trouble would it be, they wonder, to print an advisory on the final bill?

Spokesman Steve Berry says Utilities is working to improve how it communicates the reconnection policy with customers. But Utilities officials note that when a water line is considered abandoned, reconnecting it is akin to connecting a new home to the system — hence the term, "development fees."

When a property sits for years without utilities being paid, including capacity charges that help build infrastructure, other customers essentially subsidize that property.

"During that time that a line is abandoned, we are receiving no funds from that customer to maintain that line, so the rest of the customer base is absorbing cost of that line," Berry says. "From a fairness perspective, we have to look at that."

Making an exception could backfire, Berry adds, by opening the door for others to come forward and challenge the fees they had to pay in similar circumstances.

"Someone might seek to have their fee refunded," Berry says. "The question is, do you want to go down that path, and what would be involved to do it, and what kind of legal liability does that put the utility in moving forward? Because we're basically making an exception on a tariff."

Berry says the issue has come up only three times in the past two years, and none of those cases dated back as far as the Knaufs', which Berry calls "highly unusual."

"We're probably not going to see another one like this," he says.

That's because the policy for fees has been changed. In 2006, the grace period was adjusted from five to 10 years, and in 2009, to 20 years. But that doesn't help the Knaufs, since the policy changes became effective from those dates going forward.

'Really crushed'

Zora Knauf is double-bunking with her sister, who's in high school. "She worked on it all summer" fixing up the property, her mom says, "so she's really crushed." And Sandra herself is downhearted about not being able to use a room in the house as an office for a small business she's trying to start.

The Knaufs' meetings with Utilities staff failed to result in a reprieve from the $11,160 charges. The next step is an appeal to Utilities' dispute resolution department. The last resort is an appeal to the Utilities Board.

"We live in a good city, and I think it's just an oversight," Andrew says. "All the people who work at Utilities, they're afraid to make any decisions. So I'm hoping we'll go before the board."

The Knaufs say they've contacted their City Councilor, Lisa Czelatdko, who told them she would look into the issue. Czelatdko tells the Indy she referred the couple back to Utilities.

Council President Scott Hente, who serves as Utilities Board chairman, deferred comment, saying he, too, would look into it.

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