On Tuesday, the Steamboat Springs City Council will consider the second reading of an ordinance requiring developers and property owners to bury electric, phone and cable lines for any new building or redevelopment downtown.
We fear the ordinance is unfair to existing property owners and will serve to discourage improvements to downtown businesses. We therefore encourage the council to amend the ordinance before it is approved.
The ordinance would apply to properties downtown only -- between Third and 13th streets and between Yampa Avenue and Oak Street. The city has committed to undergrounding utilities in that area in a four-phase, $4 million project scheduled to begin in 2006 and run through 2012. That project would be funded with an existing 1 percent franchise fee on Yampa Valley Electric Association bills.
It is not hard to follow the city's logic in crafting the ordinance. It makes sense that if all utilities will be underground in the future, new development should be required to underground utilities now. By doing so, the city won't have to return to the site in a few years to dig for underground lines and redo the electrical system.
"Why should the taxpayers have to pay to put utilities underground when they are already developing?" Deputy City Manager Wendy DuBord said.
Undergrounding utilities is not cheap. According to Yampa Valley Electric Association estimates, putting such lines underground costs a business anywhere from $2,500 to $30,000 more than connecting to an above-ground system.
Such costs are a disincentive to existing property owners to improve their businesses.
The ordinance would have no impact on existing buildings that do not undergo additions or remodels before the start of the city's undergrounding project in 2006. The city will bear the exterior cost of putting utility lines underground for those properties once the project begins.
But if a property owner decides to expand his or her business with a remodel or addition that changes the utility services, the business would incur the $2,500 to $30,000 expense.
Such an approach rewards property owners who stand pat and punishes those who seek to better their properties.
Another concern with the ordinance: What guarantee is there that the city will move ahead with undergrounding in the time frame it suggests? The undergrounding project already has been postponed once, and given the city's tenuous financial footing, it seems premature to base a new ordinance on a six-year, $4 million project that is more than two years away.
It's conceivable that, if the ordinance is approved as it stands, downtown businesses desiring to undertake improvements will delay their projects until after the city pays to underground their utilities. Even if the city hits its estimated timetable, that still could push back needed improvements almost a decade.
The city should be encouraging, not discouraging, downtown businesses to reinvest in their properties.
We agree that any new building being erected downtown should be required to bury its utilities. But charging existing businesses who want to improve their properties thousands of dollars to pay for undergrounding while allowing the taxpayers to pay for property owners who do nothing is an inequitable and misguided approach.
On Tuesday, the City Council has the chance to amend the ordinance to remove the penalty to existing property owners. We encourage council members to do exactly that.