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 Delaney says the plan is to reimburse the fund with $16 million that the city is getting from RTD for the Public Works land at Decatur Street and another facility near Park Avenue West and I-25. However, the earliest completion of these payments would be in 2012. The fund would still be picking up $13 million for the construction of the facility, he adds, but Wastewater will at least get a small access road out of it.


Denver has set up other enterprise funds over the years. The Golf Enterprise Fund, for example, collects fees from people who use municipal golf courses; the money is going to paying off $7.3 million in bonds. But golfers have a choice: Rather than pay the fees, they can play elsewhere. Property owners have no choice about the stormwater fees; they're obligated to pay them, and there's nothing they can do to reduce the amount they're billed.

Nothing on the Public Works website or in the department's informational materials tells property owners that part of their Storm Drainage Enterprise Fund fees are paying for government services and projects that may have very little to do with the collection of stormwater.

Longmont has a similar enterprise fund for its stormwater system. Cal Youngberg, manager of that town's Water Resources Department, says that property owners pay about $3 million in fees every year — and careful accounting practices ensure that the money only goes to the operation, maintenance and replacement of the storm system. "With enterprise funds, you're restricted to the use that the fund was developed for, under state law, so basically you have to run it like a business," he explains. "You have to use the funds you collect specifically for the service that you're collecting for. We have to account for that. So you have to match your expenses with your revenues, with some reserves and the usual things you put in to make sure it doesn't collapse on you. It's solely for the purpose of the stormwater system."

Longmont will sometimes use storm funds as "transfer fees" to reimburse other agencies, such as Street Maintenance, but only if the work is directly associated with the storm system. "If you're ripping up a street or tearing up a sidewalk to maintain or work on a storm sewer, you replace that out of the storm fund," Youngberg says. "But the storm sewer systems — the streets and everything are all identified and mapped, and we track the expenditures with budget numbers as to where it goes."

That tracking is critical, according to Penn Pfiffner, a former Republican legislator and current president of the Colorado Union of Taxpayers. Without it, the reallocation of money from Denver enterprise funds is a "back-door tax increase" on property owners, he charges, and puts the city in violation of TABOR's legal intent. "Any enterprise is supposed to charge a fee only for its work," explains Pfiffner. "Any enterprise that charges an enhanced fee, a larger fee than it should, and spends it on general-revenue activities, is at the very least an unethical way of doing business by the city, and very likely should be found unconstitutional. And if it's not, there should be a law that closes that loophole."

Last Thursday, the Office of the Denver Auditor sent a note to Bill Vidal, director of Public Works, informing him that the office is initiating an audit of the Wastewater Enterprise Fund. The fund had been on a list of routine audits slated for 2010, but Auditor Dennis Gallagher decided to bump it up.

"The auditor is always out and listening to the public, and we started to hear that there should be something that we should be taking a look at," explains Clay Vigoda of the auditor's office. "We're looking at the service-level agreements and all the financial arrangements between the enterprise fund and the city. We just want to be sure that there are clear agreements on how the money is used and that it's being used properly."

The auditor's office won't find any service-level agreements for the new Public Works campus off Bayaud. Apparently the administration never bothered drafting an inter-governmental agreement, a contract or even an IOU promising that the $42.5 million dip into the Wastewater fund will actually be paid back.

"I know we've had discussions with the budget office, with finance, with the city attorney's office — and the manager's fully aware of it," Delaney says. "It's fully our intent to make this whole, but I don't have it written down on a piece of paper."

In 2006, a grand jury found that San Diego had improperly diverted tens of millions of dollars from stormwater fees into the city's general fund each year to pay for everything from legal fees to city lobbying contracts to the construction of daycare playgrounds. San Diego mayor Jerry Sanders fired his water department director, formed an eleven-member committee to oversee the fund, and ordered the city to pay back more than $1 million to ratepayers.

Westword's open-records request for a detailed breakdown of how Storm Drainage Enterprise Fund and Wastewater Enterprise Fund monies have been used outside of the Wastewater agency is still pending. As of January 2009, the balance in the Storm Drainage Enterprise Fund was $50.4 million, with $29.6 million of that coming from storm utility charges in 2008. The city still has $24.2 million outstanding on its stormwater bond debt; every year, more than $2 million in stormwater fees goes to pay off the bonds, plus interest. But this year's city budget shows that the amount of money being "billed" to the fund has gone up to an all-time high of $5.8 million. And with the new, $42 million city services campus being put on the ratepayers' tab, it's unclear how much money is left in the fund.

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