Following the presentation part of Pagosa Area Water and Sanitation District’s new long range plans for a $357 million reservoir in Dry Gulch, it appeared that perhaps a sense of shock and disbelief hung over the audience. When PAWSD President Karen Wessels announced that we still had about half an hour left and that a board of panelists would now take questions, only a handful of hearty souls — myself, Daily Post writer Glenn Walsh, developer J.R. Ford, Ski Club President John Ramberg and local attorney Mele Whiting — were able to stir themselves out of their stupor and stagger up to the guest microphone.
Apparently, not even PAWSD media mouthpiece Chuck McGuire was able to formulate a question for the panel.
One of the fascinating changes in the Monday night presentation, compared with previous PAWSD explanations of the Dry Gulch project, was the absence of any mention of a future bond issue. In all the other PAWSD presentations I’ve heard over the past two years, the project representatives have always asserted that the public would be allowed to vote on a bond issue to help fund the project — which was, way back then, only a $150 million project. That bond approval, we were told, would be allowed to happen in about 2018, around the time that serious work on the proposed reservoir would begin.
On Monday night, PAWSD seemed to be representing a totally different approach, where massive and unstoppable growth would fund the project without any apparent need for a voters-approved general obligation bond.
One of the first PowerPoint slides displayed during Special Project Manager Sheila Berger’s performance stated, in big bold letters:
Berger did in fact apologize for the photo included in the slide — which was intended to imply the future of Pagosa Springs, but was actually a photo of Las Vegas, Nevada, a city of about 1.8 million people.
One of the biggest problems with long term capital projects, such as the proposed Dry Gulch reservoir, has to do with money, or rather, the lack of money. PAWSD proposed in their Monday night presentation that PAWSD impact fees would be contributing $5.2 million into the Dry Gulch building fund by the end of next year. Curiously, the PAWSD 2009 budget predicts only $200,000 will be collected in 2009, so I guess we should expect an awful lot of development during 2010.
But assuming PAWSD does collect $5.2 million by the end of 2010, we still have a bit of a problem. If PAWSD puts its annual impact fee collections into a bank account, the money actually loses values — in most economic situations — due to inflation. By collecting money year after year and stashing it away, PAWSD could conceivably collect $357 million in impact fees by the year 2055. But by that time, the cost of the Dry Gulch reservoir would probably be up over $1 billion.
So here in America, most government and private capital projects — from a residential garage remodel to a new rural hospital to Denver’s new mass transit system — are funded by bonds. Bonding of capital projects allows the project to be built and then paid for over time, thereby avoiding to some degree the disappearing value of money kept in a savings account.
PAWSD can fund — and has funded — projects with revenue bonds, which do not require voter approval. But to acquire revenue bonds, PAWSD must demonstrate the existence of those ongoing revenues. In the case of the Dry Gulch land purchase a little more than one year ago, PAWSD promised to pay back that $12 million Colorado Water Conservancy Board loan using the Water Resource Fees they claimed they would collect. But they backed up that promise with a clarification: if growth does not occur and impact fees don’t suffice, PAWSD will pay back the loan from increased user fees.
As local realtor Mike Heraty has argued in numerous PAWSD meetings, the PAWSD board is, in fact, obligating current residents to pay the full cost of any Dry Gulch project — be it $357 million or $1 billion by the time it’s built — through user fees levied on existing residents, if for any reason growth does not occur as projected by PAWSD’s fanciful imagination.
The Monday night presentation was well publicized, but although the Vista Clubhouse was well-stock with chairs, the audience was in fact only about half full. Considering that PAWSD is proposing to shackle the community to a $357 million water project which no current residents have approved and no current residents can afford, one might think the presentation would be well attended — and that perhaps several dozen people would have questions about the evening’s roll-out of new fees.
It appears, however, that the PAWSD board and staff have pretty much isolated themselves from entire Pagosa Springs community by seeking no public input or approval of their fantasy Dry Gulch project. By continually focusing on fees the board can levy without any voter approval, the PAWSD board is digging itself further and further into a hole of revenue debt from which there may be no relief, except to bankrupt the area’s water users.
Nevertheless, a few hearty souls were willing to step up to the microphone during the brief Question & Answer portion of the Monday night presentation, to ask about information missing in the presentation. I’m including myself in that group of hearty souls — not because I consider myself especially hearty, but because I did have to overcome a growing sense of despondency to step up to the microphone and face a panel of experts whom I expected to evade answering my questions with all the skill them could muster.
But we asked them anyway.