Politico: How’d THAT Work Out?

from Politico Magazine

LETTER FROM COLORADO SPRINGS

The Short, Unhappy Life of a Libertarian Paradise

The residents of Colorado Springs undertook a radical experiment in government.
Here’s what they got.


Colorado Springs has always leaned hard on
itsreputation for natural beauty. An hour’s drive south of Denver, it sits at the base of the Rocky Mountains’ southern range and features two of the state’s top tourist destinations: the ancient sandstone rock formations known as Garden of the Gods, and Pikes Peak, the 14,000-foot summit visible from nearly every street corner. It’s also a staunchly Republican city—headquarters of the politically active Christian group Focus on the Family (Colorado Springs is nicknamed “the Evangelical Vatican”) and the fourth most conservative city in America, according to a recent study. It’s a right-wing counterweight to liberal Boulder, just a couple of hours north, along the Front Range.

It was its jut-jawed conservatism that not that long ago made the city’s local government a brief national fixation. During the recession, like nearly every other city in America, Colorado Springs’ revenue—heavily dependent on sales tax—plunged. Faced with massive shortfalls, the city’s leaders began slashing. Gone were weekend bus service and nine buses.

Out went some police officers along with three of the department’s helicopters, which were auctioned online. Trash cans vanished from city parks, because when you cut 75 percent of the parks’ budget, one of the things you lose is someone to empty the garbage. For a city that was founded when a wealthy industrialist planted 10,000 trees on a shadeless prairie, the suddenly sparse watering of the city’s grassy lawns was a profound and dire statement of retreat.

To fill a $28 million budget hole, Colorado Springs’ political leaders—who until that point might have been described by most voters as fiscal conservatives—proposed tripling property taxes. Nearly two-thirds of voters said no. In response, city officials (some would say almost petulantly) turned off one out of every three street lights. That’s when people started paying attention to a city that seemed to be conducting a real-time experiment in fiscal self-starvation. But that was just the prelude. The city wasn’t content simply to reject a tax increase. Voters wanted something genuinely different, so a little more than a year later, they elected a real estate entrepreneur as mayor who promised a radical break from politics as usual.

For a city, like the country at large, that was hurting economically, Steve Bach seemed like a man with an answer. What he promised sounded radically simple: Wasteful government is the root of the pain, and if you just run government like the best businesses, the pain will go away. Easy. Because he had never held office and because he actually had been a successful entrepreneur, people were inclined to believe he really could reinvent the way a city was governed.

The city’s experiment was fascinating because it offered a chance to observe some of the most extreme conservative principles in action in a real-world laboratory. Producers from “60 Minutes” flew out to talk withthe town’s leaders. The New York Times found a woman in a dark trailer park pawning her flat screen TV to buy a shotgun for protection. “This American Life” did a segment portraying Springs citizens as the ultimate anti-tax zealots, willing to pay $125 in a new “Adopt a Streetlight” program to illuminate their own neighborhoods, but not willing to spend the same to do so for the entire city. “I’ll take care of mine” was the gist of what one council member heard from a resident when she confronted him with this fact.

That’s where Colorado Springs was frozen in the consciousness of the country—a city determined to redefine the role of government, led by a sharp-elbowed businessman who didn’t care whom he offended along the way (not unlike a certain president). But it has been five years since “This American Life” packed up its mics. A lot has changed in that time, not least of which is that the local economy, which nearly drowned the city like a concrete block tied around its balance sheet, is buoyant once again. Sales tax revenue has made the books plump with surplus. Enough to turn those famous streetlights back on. Seven years after the experiment began, the verdict is in—and it’s not at all what its architects planned.

One of the lessons: There’s a real cost to saving money.

Take the streetlights. Turning them off had saved the city about $1.25 million. What had not made the national news stories was what had happened while those lights were off. Copper thieves, emboldened by the opportunity to work without fear of electrocution, had worked overtime scavenging wire. Some, the City Council learned, had even dressed up as utility workers and pried open the boxes at the base of streetlights in broad daylight. Keeping the lights off might have saved some money in the short term, but the cost to fix what had been stolen ran to some $5 million.

“Sometimes the best-laid plans don’t work out the way you’d hope,” says Merv Bennett, who served on the City Council at the time and asked officials at the utilities about whether the savings were real.

There has been a lot of this kind of reckoning over the past half-decade. From crisis came a desire for disruption. From disruption came, well, too much disruption. And from that came a full-circle return to professional politicians. Including one—a beloved mayor and respected bureaucrat who was short-listed to replace James Comey as FBI director—who is so persuasive he has gotten Colorado Springs residents to do something the outside world assumed they were not capable of: Five years after its moment in the spotlight, revenue is so high that the same voters who refused to keep the lights on have overwhelmingly approved ballot measures allowing the city to not only keep some of its extra tax money, but impose new taxes as well.

In the process, many residents of Colorado Springs, but especially the men and women most committed to making the city thrive, have learned a few other lessons:

  • That perpetual chaos can be exhausting.
  • That the value of the status quo rises with the budget’s bottom line.
  • And that it helps when the people responsible for running the city are actually talking with one another.

All it took was a few years running an experiment that everyone involved seems happy is over.

***

Like many revolutions, the one in Colorado Springs began with a manifesto.

It was an email that was intended to be private, sent from Steve Bartolin, then CEO of luxury hotel The Broadmoor, to the mayor and City Council. The Broadmoor is a city unto itself—a century-old resort whose three golf courses, 779 rooms and skating rink sprawl over 3,000 acres around a lake in the foothills on the city’s western boundary. In a tourist-dependent region with an unusually large reliance on sales taxes, The Broadmoor is an economic powerhouse. In 2009, at the height of the impasse over the worsening budget, Bartolin had made a comparison between Colorado Springs’ budget and the budget of his resort. Observations like the fact that the city had a computer department with 81 people, while The Broadmoor employed only nine. The email didn’t stay private for long. It quickly went viral, was published in full in the newspaper, and so energized the business community that it inspired a dozen locals to start their own shadow council, which they called the City Committee. One of the members of the committee was Bach, a private real-estate broker who had gotten his first corporate job by the audacious move of cold-calling—collect—the CEO of Procter & Gamble. Soon, the committee members prevailed upon Bach to run for mayor, to bring their principles to City Hall.

Bach’s mantra on the campaign trail was one that voters nationwide would recognize from last year’s presidential cycle: Run the government more like a business. He said he was intent on“transforming city government so it works for everyone—and without tax increases.” In fact, he wanted to do away with the personal property tax for businesses and expedite how long it takes developers to get permits, all in service of promoting job growth, which he later vowed would hit 6,000 a year. Bach considered himself an outsider fighting the city’s “regulatory agency mind-set.”

“The only difference I can see between me and Donald Trump,” he told Politico Magazine recently, “is that I don’t tweet.”

In 2011, Bach was swept into City Hall with nearly 60 percent of the vote. Not only did he win, but he arrived in office with powers no mayor of Colorado Springs had ever wielded. A ballot amendment approved by voters a year earlier had taken power away from the City Council and given it to the mayor. Now that mayor happened to be someone who felt that political compromise was a dirty word. Shortly after the election, two top council members asked Bach to give them a detailed weekly report just as the previous city manager had done. He said no. The mayor wouldn’t answer to anyone. The council, he indicated, would answer to him. And he showed that by taking on a major deal, the council was negotiating to rid itself of the local hospital.

Leaders at Memorial Health claimed the hospital was hemorrhaging money in the recession. But to Bach, the hospital was an incredible asset that was just being mismanaged—an argument he buttressed by pointing out that it was sitting on some $300 million in free cash. The council wanted to lease the hospital to a team of local leaders led by Memorial Health’s CEO for about $15 million over 20 years. Bach called it a giveaway. He demanded that the council open up the process to other bidders. Eventually, that process led to a very different financial arrangement with the massive University of Colorado Health System: a 40-year lease that, counting capital improvements, came out to nearly $2 billion. You don’t have to have an MBA to appreciate the benefits of Bach’s deal.

“I was really angry when I got on council and found out they just wanted to hand over the hospital,” Merv Bennett says. “Steve kept us from going down a terrible path.”

Bach also turned out to be right on another deal he said City Council had mismanaged before he was elected. The council had approved a generous contract to a physicist from the nearby U.S. Air Force Academy to develop and implement what he said would be a $20 million, coal-scrubbing technology on the city’s downtown power plant. “Just a terrible deal,” Bach says.

The city had pitched it as a way of making a profit—when the technology was licensed to other plants, Colorado Springs would share in the rewards. But the city was also on the hook to pay for the research and development it required, and costs quickly spiraled. Just last month, the business shut down without having made a single additional sale. The cost: some $150 million over budget. As with the hospital deal, in which the council chose to go with a local rather than open the bidding to all comers, Bach raked officials for their shortsighted provincialism that he and others felt wasn’t befitting America’s 40th-most populous city.

“This town is so easily scammed,” says John Hazlehurst, himself a former council member and now a columnist with the Colorado Springs Business Journal. “Why? Because we’re hicks. It’s really that simple.”

But there was a cost for all that head-butting in City Hall. Although the economy continued to improve, and although Bach’s outsourcing of jobs had done enough to repair the parks budget so that trees were being watered and the lights were back on, some business leaders were skittish about moving to town or expanding.

For those who opposed Bach, the political newcomer was doing damage by firing longstanding department heads without consulting anyone beforehand. Jan Martin, then the council’s pro-tem president, said she heard of Bach’s firing of the city’s police chief by word of mouth, rather than from Bach himself. “He was draining the city of all of this accumulated knowledge,” she says. Hazlehurst, watching from the sidelines, is more succinct. “Bach’s dysfunction and [the] council’s dysfunction were intimately related,” he says. “It was just a rookie government.”

There was a price to pay for Bach’s imperiousness and lack of diplomacy, and this is something about which he and his critics agree to some extent. Job creation, which had been a pillar of Bach’s campaign, never got up the steam that he had promised and, by his own admission, lagged other similarly sized cities in the region like Albuquerque, Omaha and Oklahoma City. He never managed to get the business tax repealed. And his signature plan to boost tourism with a multipronged project of museums and an outdoor stadium ran into headwinds from a council that said it wasn’t sufficiently involved in the planning.

By 2015, the final year of his term, Bach was no longer talking to any member of City Council, save for Bennett. Both sides were fighting proxy battles in the middle of council meetings, quibbling over the sorts of things—moving money from one government account to another to pay bills—that would normally be routine. People outside the council chambers were paying attention, and they didn’t care for what they were seeing—the city that was supposed to run like a business was actually scaring companies. The business leaders who had once supported him had even started their own, newer version of the City Committee—called Colorado Springs Forward—and were looking for a different candidate to back.

Mike Juran, CEO of a midsized company that “puts displays in anything that’s not a laptop or a phone,” had a choice to make in the last year of Bach’s administration. He believed his company, Altia, was poised for big growth—thanks to an automobile industry that wanted to put more gadgets in their cars. Juran wanted to stay put, but he wondered whether he would have trouble attracting young software engineers to Colorado Springs. “The city was in a weird funk and getting a bad national reputation,” he says. Juran knew that if any of his potential recruits googled the city, they would see that it had gone dark, a wildfire had recently destroyed 300 homes, and the city was home to disgraced pastorTed Haggard. Much of this had nothing to do with Bach’s administration, but Juran also knew that Bach’s belt-tightening had hidden effects that were going to erode the city’s quality of life. Colorado Springs had spent years putting off enormous infrastructure problems that would one day come due—one, an issue with stormwater, was so bad it would soon be the focus of a lawsuit from the Environmental Protection Agency. Juran began looking into offices in Denver or Silicon Valley.

Bach had made a campaign promise to serve only one term. But the promise wasn’t necessary—by 2015, he, along with everyone else, knew the then-71-year-old’s chances for reelection were close to zero. Even the business leaders who had helped get him elected knew Bach wasn’t the man for the job anymore. What was needed was a steady hand, and Colorado Springs ended up getting exactly what it needed.

“Finally,” Juran says, “we had grown up and decided we wanted to be a real city.”

***

If every election is a referendum on the politician who came before, John Suthers was as clear a renunciation of Steve Bach as could be found. Far from a political outsider, Suthers had spent his life working inside government, from student body president of his high school (“No others than Suthers”), to local district attorney, to head of the Department of Corrections, to state attorney and all the way up to attorney general of Colorado, where he served for 10 years.

“When Suthers came in it was as if Michael Jordan had joined your pickup basketball team,” says columnist Hazlehurst. “He’s a consummate politician. … He knows what he’s doing.”

Suthers was a Republican like Bach, and he shared Bach’s belief in keeping government budgets on a leash. But unlike Bach, he wasn’t going to try to strangle the city with it. Suthers believed there was a fundamental difference between business and government—no matter how strong the mayor’s office is, there are still a bunch of other elected officials who need a say. So Suthers’ first goal after getting elected was, he says, to improve his relationship with the City Council. He did that by scheduling two monthly catered lunch meetings, acquiescing to many of their requests for staff and resources and, in the minds of many, treating them like partners rather than combatants. “My predecessor sent over a budget on the day it was due and said, ‘Take it or leave it,’” Suthers says. “I’ve been doing this for a long time. … I didn’t wait until [the last minute] to tell [the council] what I was thinking.”

Suthers’ collaborative approach also led to something that might have been unthinkable in the dark, budget-strapped days of 2010.

Colorado Springs’ reputation as a Republican stronghold might seem overblown to a visitor walking downtown. Just minutes from the pricey liberal arts school Colorado College is a kombucha shop, a store that sells hour-and-a-half stays in sensory deprivation tanks, and a book seller that gives prominent shelf space to the latest Noam Chomsky and is owned by Richard Skorman, the current City Council president. Yet despite those superficial signs of changing demographics, Donald Trump still beatHillary Clinton by more than 22 points in Colorado Springs’ El Paso County. Even with that small-government mind-set still relatively intact, three times in his first two years as mayor, Suthers has gone to voters either proposing a new tax or asking to keep extra tax revenue. By overwhelming margins, he has now persuaded the supposedly anti-tax zealots of Colorado Springs to commit $250 million to new roads, $2 million to new park trails and as much as $12 million for new stormwater projects. “The ballot items were enormous statements of confidence,” says Chamber of Commerce Director Dirk Draper. “They showed that while the community is fiscally conservative, it’s not radically so. If you can find someone to explain it to where it makes sense, voters will allow it.”

Today, Suthers can point to a whole host of data points that suggest Colorado Springs has more than recovered. “We’re on a roll, big-time,” he says. The city’s unemployment is a vanishingly low 2.7 percent. Some 16,000 jobs have been created in the past 24 months—a pace that exceeds Bach’s lofty goals. Flights at the airport have increased nearly 50 percent from a year ago. And large projects have either opened recently—such as a National Cybersecurity Center that takes advantage of the defense ecosystem built up around the Air Force Academy—or will soon, like the U.S. Olympic Museum slated for 2018, a natural offshoot of the fact that Colorado Springs has been home to the U.S. Olympic Training Center for nearly 40 years.

The city’s experience as a political petri dish might not have produced any easy answers. But at least for Suthers, it has produced a verdict on the run-the-government-as-a-business mantra. “Some personalities in the business world don’t suffer fools very much,” he says. “You’ve got to suffer a lot of fools in politics.”

This is the larger lesson of Colorado Springs’ experiment: Ideas matter, but so do relationships. Colorado Springs remains fiscally conservative; on this score, there’s more agreement than not between elected officials and their constituents. But ideological consensus isn’t enough to overcome a lack of surrogates willing to advocate your policies when, even with the strongest mayor system, it’s not entirely up to you.

At a recent charity roast, the 180-degree change in attitude among the city’s political class was on full display. The emcee joked that while Suthers had agreed to come and endure good-natured jokes about his comb-over, the previous year Bach had been invited and offered a different response. “It was two words,” he said, “and the second one was ‘you.’”

Despite Bach’s sandpapery reputation, many who used to spar with him are willing to give the former mayor credit today. Suthers says Bach’s extreme focus on the budget helped right the city financially, and his efforts helped set the stage for a revival of the airport. But most of all, what the leaders of Colorado Springs seem most thankful for is that one man’s turmoil begat another man’s harmony.

“Steve was the ultimate change agent, and they usually have a short shelf life,” Bennett says. “If it weren’t for the lights going out, we might not have had Steve. And if it weren’t for Steve, we might not have John.”

Caleb Hannan is a writer in Denver.

About Bruce

Work for sustainable development of small islands; ex-Peace Corps (Volunteer and staff) in LA & Caribbean; cruised Caribbean on S/Y Meander for three years; like small tropical islands, French canals, Umbria, Tasmania, and NZ. Married 50 years. Former President (1995 to 2016) of Island Resources Foundation.
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