EDITORIAL: Saving Ourselves, Part Six

Read Part One

“Bill, I want to start giving you an allowance.”

These fateful words were spoken to me 60 years ago, when I was five years old, but I can still hear the serious tone in my father’s voice. He and my mother had apparently thought long and hard about this decision — perhaps they’d even argued about it?

Giving money to a five-year-old?

As my father explained it to me that fateful day, I was going to receive a gift of 5 cents every week. He was very clear: this was not payment for doing my daily chores. Everyone in the family did chores, and none of us got paid for that; we were a family, and we all helped out. My 5-cents-a-week allowance, he explained, had nothing to do with helping around the house. He and my mom wanted me to start learning the value of money. The ‘allowance’ was part of my education.

I quickly learned that it took two weeks to save enough money for a popsicle from the Good Humor truck (7 cents) and more than a month — every week, watching the ice cream truck pass by — to sock away enough money for the coveted Yo-Yo at the dime store.

As I grew older, and presumably more mature, my allowance was increased to a quarter a week, and eventually to a dollar a week. (My father’s paycheck was also increasing, year after year, but I didn’t understand very much about that part of the system.)

When I started delivering newspapers, at age 12 — pulling in $60 a month — the ‘allowance’ became moot, and faded into history. But I would give high marks to the educational part of the process. My father and mother could have lectured me daily about the value of money, but for the cost of a nickel a week — distributed as a gift — they provided me with a much more thorough, and authentic, understanding of our consumer society.

For example, here’s one thing I learned about the value of money. After saving my allowance for two weeks, the popsicle was consumed in less than five minutes. After socking away my nickels for six weeks, the shiny plastic Yo-Yo was amusing for a few days.

Sixty years later, I’m still learning. I guess we all are.

On Friday, in Part Five, I summarized — very briefly — an hour-long discussion at the Pagosa Area Water and Sanitation District (PAWSD) board meeting, concerning the question of waivers or deferrals of certain fees, to benefit affordable housing. During that discussion, the four members of the board present at the meeting presented a unified commitment to “keeping low monthly rates” for existing PAWSD customers… and to requiring growth to “pay its own way” through high hook-up fees for new construction… even if that new construction were attempting to address the current affordable housing crisis.

We are running an article this morning, written by Bob Mook, Communications Director for the Colorado Center on Law and Policy. His article begins like this:

With affordable housing becoming increasing scarce and rents getting higher, landlords hold the advantage in Colorado’s ever-tightening rental market. Unfortunately, because landlords are only required to give seven days’ notice on rent increases or terminations on “month-to-month” tenancies, tenants can literally be left out in the cold. Recent reports indicate that Colorado’s population of homeless families has been growing as affordable housing becomes harder and harder to find.

A fiscally conservative friend of mine asked me, over the weekend, how I could justify subsidies for affordable housing, coming out of the pockets of the PAWSD customers who already have homes.

Wouldn’t this be yet another case of the “redistribution of wealth” by government actions?

So I had two questions to answer. How can anyone justify PAWSD subsidies for affordable housing? … and, is this an unethical “redistribution of wealth” … ?

I think I can successfully address those questions this morning. Because, in fact, it’s not a “subsidy” at all.  Quite the opposite.

The Pagosa Area Water and Sanitation District was created in 1971 to service a massive development project — or at least, it seemed massive in relation to the existing Town of Pagosa Springs, four miles to the east, population 1,200. The Eaton-Pagosa project was designed to accommodate up to maybe 12,000 new homes and maybe 30,000 people — twenty times the size of the existing community.

The developers paid for the installation of the water and sewer pipes with borrowed money — but then handed the operations and maintenance over to a new government agency: PAWSD. (As it has turned out, the installation of the pipes may have been done poorly, because the system is now, in 2017, plagued by leaks that lose around 40 percent of the water collected and treated by PAWSD.)

PAWSD instituted two types of fees: regular monthly fees, and hook-up fees for new connections. Both types of fees were fairly affordable. PAWSD did not have any “capital investment” fees. Every customer was helping to pay for the capital cost of the district. It seemed like a fair system, at the time.

During the decade between 1995 and 2005, PAWSD watched its customer base — and its flow of money — double. And, like a lottery winner, the district went on a spending spree. Projects included the Dutton Ditch pipeline, the San Juan Pumping Station, the enlargement of Stevens Reservoir, the purchase of the Dry Gulch ranch property, and the Bio-solids Greenhouse. (Among other smaller projects.) The flow of hook-up fees from new construction were an important part of the revenue picture. These projects caused an enormous increase in PAWSD debt, but it looked — at the time — like “growth” was going to easily cover the debt payments, thanks to the invention of new “capital investment” hook-up fees.

Then came the Great Recession. The construction industry in Archuleta County nearly dried up, and so did the “capital investment” hook-up fees that were supposed to help cover the huge debt burden PAWSD had created for its customers.

What we need to understand — in relation to affordable housing — is that PAWSD is not legally required to collect “capital investment” fees from new construction. It’s simply a board policy, and a fairly new policy at that. In this sense, the PAWSD “capital investment fees” are similar to the Town’s “impact fees” which were instituted around the same time: these fees are allowed by law… but they are optional.

In the decade since these new fees were put in place, almost no affordable housing has been built in Archuleta County. The one large project — the 40-unit Hickory Ridge apartment complex — got fee deferrals from both PAWSD and the Town.

Yes, we could — if we so chose — view fee waivers for affordable housing as “redistribution of wealth.” But the fact of the matter is, the past decisions by various PAWSD boards — and by the Town Council — to charge capital investment fees on new construction can also be viewed as a “redistribution of wealth.” None of the 9,000 homes built in Archuleta County between 1972 and 2004 paid these “capital investment fees” when they hooked up to PAWSD, or when they bought their Town building permit… but a builder now must pay these new fees, that did not previously exist. In a sense, we are extracting money from the pockets of newcomers, to pay for previous capital investments that service the entire customer base.

PAWSD is not required to collect special fees on new construction, to be “redistributed” into the pockets of the existing customers. But it’s terribly hard for a government board to reduce or eliminate a fee, when they’ve gotten used to the cash flow.

If the allowance stops… how will we afford that shiny plastic Yo-Yo?

Read Part Seven…

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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.