Photo: The Pagosa Fire Protection District fighting the out-of-control Bear Creek/Old Adobe Fire in downtown Pagosa, October 2016. No one was injured. The building was a total loss.
We’re considering, in this editorial series, a proposal by the Pagosa Fire Protection District to impose impact fees on new construction within the District. But for a bit of local context, we’re going to be considering a similar fee imposed by the Pagosa Area Water and Sanitation District (PAWSD): the Capital Investment Fee, also collected on new construction.
For some reason, Pagosa Springs has tended to attract fiscal conservatives to its community, and the community has also tended to elect people claiming to be fiscal conservatives to local government boards.
But it seems like, no sooner are the fiscal conservatives sworn into office, then they begin to propose higher taxes and fees.
One of the local boards that has held most closely to a ‘fiscal conservative line’ over the past decade has been the Pagosa Area Water and Sanitation District board. In a rather remarkable show of ‘low tax’ philosophy, that board asked PAWSD customers, in 2016, whether they wanted to place PAWSD back under constitutional TABOR (Taxpayer Bill of Rights) restrictions.
The TABOR Amendment, spearheaded by limited-government proponent Douglas Bruce and approved by Colorado voters in 1992, aimed to keep state and local government spending from ballooning faster than the rest of the economy, by limiting budget increases to basically “inflation plus population growth”. But the Amendment also allowed local voters to remove the restrictions for select district, when special needs arose. Over the years, nearly all local government entities in Archuleta County — including PAWSD — asked to be “de-Bruced” by their local voters.
PAWSD customers happily voted to reinstate TABOR restrictions.
I’m not sure, but this might be the only instance of any local government in Colorado ever allowing themselves to come back under TABOR after previously being “de-Bruced”.
Disclosure: I currently serve on the PAWSD board of directors, but this editorial series reflects only my own personal opinions, and not necessarily the opinions of the PAWSD board or staff. I was not on the board when the TABOR measure was placed before the voters… but I did urge Daily Post readers to vote “Yes” on the measure.
This is not to suggest, however, that PAWSD has not seen substantial increases in revenue and expenditures.
One of the main revenue sources for the District’s wastewater fund, for example, is its Capital Investment Fee, which saw a dramatic increase in 2023. This is a one-time fee paid by a new home or commercial building based on the policy that “growth should pay for growth” — that expansion and upgrades to existing systems caused by adding additional demand for service, should be funded by the new customers rather than by existing customers.
As a result of enforcement efforts by the Colorado Department of Public Health and Environment (CDPHE) PAWSD has been required to spend approximately $10 million to make improvements to the Vista Wastewater Treatment Plant to reduce the amount of nitrogen and phosphorus in the plant’s effluent. The PAWSD board decided to split the total cost of this expensive upgrade between existing customers and new arrivals in roughly a 50/50 split.
This decision caused the Capital Investment Fee for sewer service to greatly increase, from a one-time fee of $1,179 per EU (equivalent to service to a single-family home) to $15,697 per EU. This has put a sizable financial burden on new construction. (Existing customer rates also increased, by a smaller percentage.)
From the PAWSD website:
The System Capital Investment Fee is for current and future development of additional raw water delivery, storage, and treatment.
Water – $8,958.00 per E.U.
Wastewater – $15,697.00 per E.U.
Without this fee increase, PAWSD would have watched its wastewater fund slide quickly into the red. Governments in Colorado are legally forbidden from having negative fund balances.
Now we can return to the proposal made by the Pagosa Fire Protection District, which has given the Pagosa Springs and Archuleta County governments 60 days notice to comment on a plan to impose ‘impact fees’ of $1,426 (per new single family home) or $1,104 (per multifamily dwelling unit) or $0.65 per square foot (per non-residential development.)
You can download the 2024 nexus study that defined these fees, here.
It’s not clear to me whether the Fire District is welcoming comments from the general public or only from the Town and County governments? But Fire Chief Robert Bertram was willing to meet with me a couple of weeks ago to listen to some of my concerns about the proposal, and share some of his thoughts with me.
As I understand the situation, the Fire District has been provided, by the (not always fiscally conservative Colorado legislature) the opportunity to increase its revenue haul without asking the voters.
They also have the ability to go straight to the voters to ask for a sales tax, or for a property tax increase, but have opted for impact fees instead.
Here are a couple of Chief Bertram’s comments to the Archuleta BOCC on December 10:
“Right now, [District funding] is predominantly property-tax based. Sometimes, we raise the mill-levy to get more money, then it’s always kind of ratcheting down. We’re losing money with that.
“So we’re looking at other ways to diversify ourselves…”
Just to clarify. The Fire District does not “raise the mill-levy”. Only the voters can “raise the mill levy”.
And only the voters can “de-Bruce” the Fire District and allow it to grow its spending faster than the general economy… which the voters did indeed do, many years ago. As property taxes increase, the Fire District — unlike PAWSD and unlike the Archuleta County government — the Fire District gets to keep and spend the entire increase.
Maybe some Daily Post readers have noticed an increase in their property taxes over the past couple of years?
Those increases have proved painful to some local taxpayers. But they’ve worked out surprisingly well for Chief Bertram and his District… despite of his claim, made to the BOCC, that “it’s always ratcheting down…”