grills Denver Water exec over expenditures, Denver Water responds

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John Ferrugia and Tom Burke from the television station have penned this report about the results of their investigation into Denver Water expenditures in light of the approximately $40 per year rate increase. Click through and read the whole article. Here’s an excerpt:

If all are approved, residential customers of Denver Water could see an increase of more than $40 a year. “When we see Denver Water upping their rates for their next three years, I wonder, ‘Are they being as efficient as possible Are they being as responsible as possible with our money?'” said Denver City Councilman Paul Lopez. Lopez has been a vocal opponent of the proposed rate hike…

Soon after Denver Water announced the proposed rate increase to city council in October, the CALL7 Investigators asked for and obtained a copy of all the department’s expenditures since January 2009. 7NEWS found a large majority of the expenses went to expected items like tools, pipes, repairs, vehicles, consultants and utility bills. But we also found a number of expenditures that raised questions, including $1.8 million going to community outreach and public relations. “I don’t think there is a need to do that level of community outreach when they are a monopoly, essentially,” said Lopez, referring to the fact that most of Denver Water’s 1.3 million customers do not have a choice of water provider for their homes or businesses…

“What benefit do I, as a Denver Water customer get, through your community outreach?” Ferrugia asked Denver Water Director of Finance Angela Bricmont. “Community outreach is key because it’s part of our campaign. The ‘Use Only What You Need’ campaign is part of our strategic plan to really provide water for the future,” explained Bricmont. “Many consumers look at this campaign and say, ‘I’ve conserved. I’m not using as much water… and then it costs me more money?'” asked Ferrugia. “The reality is it’s not costing you more money. In the long run, it’s actually costing you less,” said Bricmont. “What’s driving up your monthly water bill is that we have 50-year-old pipes and the fact that we need to go out and repair those so we can continue to supply clean, safe drinking water.”[…]

“Line dancing classes? Why would Denver Water need line dancing classes?” asked a visibly surprised Lopez. “This is reckless — $2,000 of our money for line dancing classes is reckless, especially now.”

Bricmont explained that the line dancing classes as well as expenditures for cooking classes, aerobics, $4,800 for golf outings and $2,500 for the Denver Water softball team were part of the department’s “Workplace Wellness Program.” “We have invested in our employees’ health and one reason we’ve done that is we’re self-insured. It’s in our best interest, both as an employer and bottom line, that we have healthy productive employees,” said Bricont. “We have a program to reach out to make sure our employees and taking advantage of the things we know work and to keep them on the job and healthy.”

Denver Water (Stacy Chesney) issued a release late yesterday in response to the article:

We take very seriously the obligation to spend our ratepayer’s money wisely. Denver Water is a well-managed organization and we take careful steps to ensure we’re fiscally responsible. When verifiable problems are brought to our attention, we fix them. We will continue to take appropriate steps to assure our operations are efficient and accountable.

Water rates are driven by the vital maintenance and capital projects needed to maintain and improve our system and to keep Denver Water’s infrastructure reliable and strong into the future. The request for a rate adjustment in 2011 is based on the need to invest in these critical projects. Next year’s projects include work like dredging Strontia Springs Reservoir, our watershed protection initiative with the U.S. Forest Service, as well as replacing the 105-year old valves at Cheesman Dam, finishing major upgrades at Williams Fork Reservoir and Dam, and stepping up our pipe rehabilitation and replacement program.

Denver Water’s rates are among the lowest in the state. If it weren’t for the need to dredge Strontia Springs Reservoir, our budget for 2011 would be less than it was in 2010. We will continue to invest in our system’s infrastructure to fulfill our obligation to provide reliable clean water to our customers now and in the future. We also have a responsibility to invest in conservation as a critical part of our strategy to provide water to our customers in the future, to eliminate waste and to help the environment.

Our mission is to provide a reliable supply of safe, clean water to more than 1.3 million people in Denver and the surrounding suburbs. As we deliver on that mission, we have a responsibility to our employees, who work hard every day to take care of our 3,000+ miles of pipe, 19 raw water reservoirs, 22 pump stations, four treatment plants, and much more. As part of that, we support wellness programs, which help reduce health and lost productivity costs in the long run. We also reimburse meals for legitimate business expenses, which include employees working overtime to repair the system. We’re committed to fostering a healthy workforce and need to retain and attract employees with the expertise to run our complex water system.

The expenses related to employee wellness, food, community outreach and the Use Only What You Need campaign amount to less than 1 percent of Denver Water’s budget.

We work hard to keep our costs reasonable and stay accountable to our ratepayers. Over the course of a year, we handle more than 50,000 financial transactions. We’re not perfect, but we do our best to make sure we are a fiscally responsible organization. When we find violations of our policies, we will follow up and deal with them. We’re proud of the work we do. We have controls in place to ensure the proper review and approval of all payments. In addition, periodic review is done by accounting, as well as internal and external auditors.

More Denver Water coverage here and here.

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