PAWSD Conjures $357 Million Project in Dry Gulch, Part One

Many years ago in Alaska, I used to perform with my friend Jeff Brown in a music group called “The Wigglers.”  Jeff and I were both amateur songwriters and fathers of young children, and The Wigglers specialized in performing so-called “children’s music” — songs like “On Top of Spaghetti” and “My Grampa’s Whiskers” — presented in elementary schools and churches, mostly for audiences of young children.  Most of our songs were “sing-alongs” where we tried to get the kids to join in, and we quickly found out that children were, generally speaking, more than willing to lend their voices to the silly nonsense songs in which The Wigglers specialized.

One day, Jeff came to me and suggested that we add some “magic” to our performances — magic, as in conjuring tricks.  Disappearing handkerchiefs, playing cards that changed color, milk poured into rolled paper cones, that kind of thing.  Quite honestly, I wasn’t really all that interested in magic tricks that fooled people — I preferred the audience participation aspects of our current act.  But Jeff was my partner, and I wanted to support him as a loyal friend, so we started learning how to perform magic tricks.

We quickly learned that almost every well-crafted magic trick relies on two key principles —  hidden preparation, and misdirection.

The hidden preparation part consisted of a playing card hidden up your sleeve, for example, or a seemingly normal milk pitcher with a hidden compartment inside. The misdirection part consisted of getting the audience to focus on your left hand — look over here, folks — instead of allowing them to notice what your right hand is doing, down there.

To really pull off a magic trick successfully, however, there was one more crucial element.  The magician had to act like “real magic” was happening.  You couldn’t give away the fact that what you were really doing was fooling people.  This requires that the performer exude an air of confidence and sincerity.

Of course, there is always a fine line between fooling the audience, and making fools of them.

On Monday evening, February 23, the Pagosa Area Water and Sanitation District (PAWSD) put on a joint performance with the San Juan Water Conservancy District, to roll out a revised long-term water storage plan focused on a proposed $357 million reservoir and water treatment complex utilizing the parched Dry Gulch valley and the nearby San Juan River.

As the reader has probably already guessed, the Monday night PAWSD performance had all the best qualities of polished and well-performed magic show, but with a slight twist.  The audience was indeed treated to examples of carefully hidden preparation, masterful misdirection, and a line-up of three top performers —  PAWSD Special Projects Manager Sheila Berger, Durango water engineer Steve Harris, and BBC Consultant Tom Pippen — all of whom exuded great sincerity and confidence.

The slight twist consisted of a brief “Question & Answer” session following the performance, where members of the audience were actually allowed to ask the performers how the tricks were done.

In any good magic show, the magician knows very well how the trick is going to finish — perhaps with a bouquet of flowers appearing out of nowhere, for example — and the PAWSD show demonstrated those qualities admirably.  So to get a magic trick to finish correctly, you have to “reverse engineer” the process so everything leads up to the surprising flourish — with everything happening in the proper order.

A year ago, way back in the winter of 2008 when we were not yet sure whether a new Great Depression had begun, PAWSD was still planning for a 35,000 acre-foot reservoir in Dry Gulch with an estimated cost of $65 million.  That reservoir, way back in 2008, was scheduled to be serviced by a water treatment plant and related pipelines with an estimated cost of about $33 million.

In order to pay for that proposed 35,000 acre-foot project, PAWSD was last year collecting an impact fee ranging from $7,210 to $18,025 on every new home built in Pagosa Springs — a fee which they claimed was “not an impact fee” but rather a “Water Resource Fee”.

The choice to pay for the proposed reservoir and treatment plant using impact fees rather than other financial instruments was based on a PAWSD board policy of “making growth pay for growth.”  Way back in 2008, PAWSD was calculating that about 60,000 new residents would be moving into Archuleta County over the next 45 years — but the impact fees had been calculated so that PAWSD could collect the entire cost of the reservoir and treatment plant from the first 20,000 Equivalent Units — even though the total number of new homes ultimately benefiting from a 35,000 acre-foot reservoir would be much, much greater.

The 35,000 acre-foot reservoir project was justified using population figures calculated by professional water engineer (and amateur demographer) Steve Harris — figures which diverged sharply from population figures available through the Colorado State Demographer’s office.

Last September, Durango water court judge Greg Lyman revised his earlier 35,000 acre-foot decision and granted PAWSD and SJWCD only enough junior water rights to fill a 19,000 acre-foot reservoir.

So here we have the final flourish, that needed to be “reverse engineered.”  PAWSD now needs to prove that the economic success of Pagosa Springs — based on its growth rate — requires a 19,000 acre-foot reservoir.

As a fellow magician, I regret to report that I was unable to catch all the acts of misdirection and hidden preparation that went into the Monday night performance at the Vista Clubhouse.  But here are a few of the tricks I was able to catch.

Way back in 2008, before we had fully entered the Next Great Depression, PAWSD was justifying a 35,000 acre-foot reservoir using an average population growth rate, over the next 45 years, of 3 percent.

Now that the Depression is in full swing, PAWSD is using a 4 percent growth rate to justify a 19,000 acre-foot reservoir.  (PAWSD Special Projects Manager Sheila Berger was apparently responsible for that clever sleight of hand.)  The recently adopted PAWSD 2009 budget, however, is based on an expected growth rate of less than one-half percent.

Way back in 2008, PAWSD was estimating a cost of about $33 million for a treatment plant and pumping system to distribute 35,000 acre-feet of water to water district customers. In their Monday night performance, PAWSD projected a water treatment plant and pumping system cost of $140 million — to distribute only 19,000 acre-feet of water.

Way back in 2008, PAWSD was still calculating the cost of building the Dry Gulch dam and 35,000 acre-foot reservoir at about $65 million.  One year later, now that the Depression is in full swing, PAWSD has calculated the cost of a 19,000 acre-foot reservoir at $161 million.

Through careful preparation, misdirection and the projection of supreme confidence in their abilities, the PAWSD presenters on Monday night were able to make it appear that a reservoir project half the size of the one planned in 2008 would now cost us $356 million — over twice the 2008 estimates.

Through these masterfully executed sleights of hand — plus others that I no doubt missed entirely — PAWSD was able to justify lowering its combined Capital Investment Fee and Water Resource Fee, charged to new home construction, by about $600 — still weighing in a healthy $9,195 per EU.  While we weren’t looking, however, they raised the Wastewater Capital Investment Fee by $1,057 — thereby increasing the total fees for a new single family home by just over $400.

Although it was not announced on Monday night, rumor has it that the name of the proposed reservoir has been changed from “Dry Gulch Reservoir” to “The David Copperfield Reservoir.”

You can click here to download the PAWSD summary of the Monday night presentation — the PowerPoint portion — as a PDF file.

Tomorrow, I hope to report a bit more fully on the Question & Answer session which followed the stunning Monday night performance.

Read Part Two… 

Bill Hudson

Bill Hudson founded the Pagosa Daily Post in 2004 in hopes of making a decent living writing about local politics. The hope remains.