As mentioned in Part Two of this editorial series, the Town Council had planned to vote on a real estate purchase last Thursday. On the agenda was an ordinance — Ordinance 994 — authorizing the Town to buy a 3.4-acre parcel in downtown Pagosa, for $1.25 million.
The parcel is currently appraised by the County Assessor at $160,000…
From the Assessor’s website:
The most recent sale of the parcel took place (it would appear) in 2010.
Sales price? $62,000.
At Thursday’s Town Council meeting, two of our current Council members were absent, and the Council members in attendance — Mayor Shari Pierce, Matt DeGuise, Gary Williams and Brooks Lindner — decided to table the vote on the $1.25 million purchase until April 4, in hopes that all six Council members could be present, and participate in the decision.
A potentially expensive decision it will be.
I also mentioned, in Part One, the brief ‘Sales Tax’ summary offered by Town Manager Andrea Phillips, for the month of January. The Town government is funded largely from sales taxes collected by the Archuleta County government and shared with the Town, 50/50.
Ms. Phillips noted that sales tax revenue was about 1% less than was what was collected in January 2022. That’s not a statistically significant drop, but it’s significantly different from the double-digit monthly revenue increases the Town had been seeing fairly regularly since about 2018.
“So we are starting to see some leveling off,” Ms. Phillips suggested.
An indication of things to come?
I’m thinking back to 2008 — for whatever reason? — when the Town government had seen a couple of years of delightful, double-digit sales tax growth that seemed destined to continue indefinitely. The size of the Town staff was also growing at a pleasant rate.
In 2008, the Council and Town staff noticed a bit of ‘leveling off’.
Then the sales tax growth shifted into reverse gear, and every month was less than the previous month. Fortunately, the Council had some thoughtful members who were willing to bring out the scalpel. Every Town department was instructed to cut expenses by 5%. Then, as things progressed, by 10%.
Staff positions that became vacant were left unfilled. The Town Manager resigned (or was asked to resign?) The interim Town Manager resigned (or was asked to resign?) A new Town Manager arrived, and was instructed to figure out a way to boost tax taxes — possibly, by luring a Walmart store to Pagosa, which he succeeded in doing.
Then he was asked to resign.
We might say, those years between 2008 and 2014 were somewhat tumultuous at Town Hall.
But the financial situation has been relatively smooth, lately, by comparison.
The Town collected $3.8 million in sales tax, in 2014… and collected $9.1 million in 2022…
…and has been slowly growing its staff, once again.
As I suggested in Part One, the Town Council and staff may have become accustomed to having more money than they know what to do with.
I will confess that I met with some of the Town Council members last fall and encouraged them to buy some real estate. The real estate in question is located immediately south of the Walmart store, and has been earmarked, for at least 15 years, as an excellent location for residential housing. The 3.5 acre parcel was priced at $550,000.
You might not know it, from looking at the parcel during the winter…
…but the parcel already has some utilities installed, and some streets already designed (on paper.)
This was originally going to be part of the ‘Enclave’ housing development, and ten Enclave condo units were constructed back in 2009, but the previous owners were not able to make the remainder of the development ‘pencil’…
…or else, got distracted by other (more profitable?) projects.
There’s little doubt in anyone’s mind that Pagosa Springs and Archuleta County are suffering a housing crisis similar to the crises hitting so many communities in Colorado and the U.S.
There’s more than one way to skin a cat… but municipal governments don’t always choose the sharpest knife.
For example. In 2021, the Town has entered into a tentative agreement with Dallas-based student housing developer Servitas to build perhaps 98 relatively cozy housing units on the Enclave property.
But the Town had refused to share, publicly, pertinent financial details about the agreement with Servitas, claiming that the financial information was ‘proprietary’.
Finally, in November 2022, Servitas shared a ‘pro forma’ outlining a possible arrangement of housing units aimed at various income levels.
26 of the units were earmarked for households earning 60%-80% of the Area Median Income (AMI), and 23 were designated for 80%-100% AMI.
23 of the units were earmarked for households earning 100%-120% of the Area Median Income (AMI), and 23 were designated for 120%-150% AMI. I was personally very disappointed by this breakdown. According to all of the data available in Archuleta County, it’s obvious that the households most negatively impacted by the current housing crisis are household making less that 80% AMI. But according to the Servitas proposal, half — HALF — of these proposed government-subsidized units would be unaffordable for ‘average’ Pagosa Springs families. (Those with incomes less than 100% AMI).
To put things another way, the Town would be extracting tax money from ‘average-income’ families and “below-average-income’ families, and subsidizing housing for the wealthiest segment in the community.
Does that even make sense, to anyone? Subsidizing housing for relatively wealthy people?
But the situation got even weirder in January, when the Town staff brought forward a plan to apply for a $9.5 million grant from the state of Colorado, to help fund the project.
Much weirder.