PHOTO: The site on Fourmile Creek, north of Pagosa Springs, where sparkling mountain water is diverted to Lake Hatcher via the Dutton Ditch, to be treated at the Hatcher treatment plant.
On Thursday, the Pagosa Area Water and Sanitation District (PAWSD) board of directors approved a $48 million budget for 2024.
Disclosure: I currently serve as a volunteer on the PAWSD board of directors, but this editorial reflects only my own opinions and not necessarily the opinions of any other board members or of the board as a whole.
PAWSD supplies treated drinking water to most of the Pagosa Springs community — either piped directly, or via water fill stations — and provides sewage treatment to a somewhat smaller number of residents and businesses.
Of the $48 million budget, about $1.2 million will be supplied via property taxes, paid by property owners living within the district. The remaining $47 million will be paid through customer fees, or state or federal grants.
The budget is much larger than in recent years. The adopted PAWSD budget indicates that expenses were about $15.6 million in 2023, and about $12.1 million in 2022.
Obviously, the 2024 budget has carried district finances into uncharted territory, with expenditures three time higher than in 2023, and four times higher than in 2022.
But the mammoth spending increase is not spread evenly across the various funds. The projected spending in the General Fund is actually less than in 2022. Ditto, the Debt Service Fund.
The blame must be assigned to the two ‘enterprise funds’ — the Water Fund and the Wastewater Fund.
The spending allocated to the Water Fund — the drinking water operations — increased from $11.3 million in 2023, to $40.5 million in 2024, due mainly to a new water treatment plant currently under construction on Snowball Road. That plant upgrade has been in the planning stages for the past decade, so the project itself is not exactly an unexpected surprise. The surprise is the actual cost.
The spending allocated to the Wastewater Fund — the sewage treatment operations — increased from $3.4 million last year, to $5.9 million for 2024, due mainly to major upgrades to the Vista treatment plant ($1 million), plus a backlog of collection system upgrades ($765,000).
How will the District pay for these increased expenditures? Good question.
Much of the Snowball treatment plant is funded by a $38 million loan from the state of Colorado, that will be paid back over the next 30 years. As a result, the actual increase in monthly water fees will be modest. PAWSD will hold a public hearing on the fee increases — from an average $54 per month last year, to $55.62 this year, for water service.
The public hearing is scheduled for Thursday, January 25 at 5pm at PAWSD’s Lyn Avenue board room.
The cost of sewer service, on the other hand, will see a dramatic increase over the next two years, if the board approves the fee increases that have been discussed over the past two month. Sewer service for a single-family home was $32.80 a month last year; this year, the proposal is a $42.64 monthly fee. The monthly fee in 2025 is proposed to be $55.33.
That increased sewer fee will also be considered on January 25.
It’s getting so it doesn’t pay to flush your toilet. It’s been a while already, since it paid to water your lawn.
Customers living outside the District and who use the fill stations for drinking water will also see an increase in fees. So will companies that pump septic systems, or who provide porta-johns.
The folks who will feel the biggest hit to their pocketbooks, however, are home builders and developers.
Last year, a builder paid two Capital Investment Fees (CIF) for a single-family home — one fee for water, and one fee for sewer.
The CIF fees last year totaled about $6,500 for a new home.
If the PAWSD board approves the propsoed fee schedule on January 25, the CIF fees for a new home will total about $24,700.
This amount doesn’t include the Connection Fee ($2,235 for water and $515 for sewer) or miscellaneous other fees.
Building a home in Pagosa Springs has not been an affordable proposition for the past decade. Recently, only people with considerable disposable income — or vacation rental investors — could afford a new home in Archuleta County.
The new PAWSD CIF fees will make that new home even less affordable.
To address the affordability problem in the past — in a community suffering from a serious housing crisis — PAWSD has been willing to waive CIF fees for companies building ‘workforce housing’ priced below median market prices. The waivers have been made possible by a ‘surcharge’ added to PAWSD customers’ monthly bills.
Habitat for Humanity of Archuleta County has been one of the few local organizations that’s been able to access those waivers.
As the board discussed briefly at their recent January 4 meeting, any waivers of the proposed much higher CIF fees will require a much larger subsidy.
Who will pay for that subsidy?