Colorado Springs Utilities proposes up to $695 million in revenue bonds
Draft ordinances would authorize up to $470 million for broadly defined system improvements and $225 million to refinance Build America Bonds. No final sale or customer rate impact has been established.
Colorado Springs Utilities is proposing up to $695 million in revenue bonds for system improvements and refinancing, with repayment tied to utility revenues rather than city taxes or the city’s general fund.
Two draft ordinances would authorize up to $330 million in tax-exempt Series 2026A bonds and $140 million in taxable Series 2026B bonds. The proposed bonds would finance improvements and equipment for the electric, gas, water, wastewater and related utility systems.
The draft 2026A and 2026B bond ordinance does not identify specific construction projects, facilities or locations. It broadly lists eligible costs including system extensions, improvements, engineering, land or easements, equipment, construction and issuance expenses.
The ordinance estimates that spending the proceeds would increase Utilities’ annual operation and maintenance expenses by $4,476,892. It does not estimate the effect on customer bills or set a rate increase. It says utility rates and charges must cover operating costs and debt obligations.
The improvement bonds would be special obligations payable from Utilities’ net pledged revenues — system revenues remaining after operation and maintenance expenses. They would not pledge the city’s taxing power, general fund, full faith and credit or city property. The draft lists about $3.012 billion in outstanding parity utility-system bonds, plus approximately $2.3 million remaining on a separate 2010 Colorado Water Resources and Power Development Authority bond. The proposed bonds would rank equally with existing parity debt.
A separate draft refunding-bond ordinance would authorize up to $225 million in bonds, potentially designated Series 2026C, 2027A or 2027B. The proceeds could refinance all or part of three Build America Bond issues: Series 2009B-2, 2009D-2 and 2010D-4.
The refinancing could proceed only if officials determine that it would produce net-present-value debt-service savings after costs or achieve other economies, including reducing risks connected to federal Build America Bond credits. The draft provides no projected savings amount or percentage.
The ordinances delegate final financing decisions to Utilities and city finance officials. Proposed rate ceilings are 6% for Series 2026A, 7% for Series 2026B and 6.5% for the refunding bonds. Minimum purchase prices and final maturities also are specified in the drafts, but those are limits rather than final issuance terms. The final principal amounts, rates, maturities, redemption provisions, purchasers and bonds to be refunded would be set later in supplemental certificates. Each series could ultimately be issued in an amount of zero.
The drafts list Sept. 8, 2026, for first reading and Sept. 22 for final passage, but they remain labeled drafts, contain blank ordinance numbers or bond terms, and do not establish that the City Council has adopted them. The available records do not verify that any bonds have been priced, sold or issued. Final authorization, issuance amounts and refinancing savings remain unresolved.