Photo: The home page of the government-funded VisitPagosaSprings.com website, April 2020. Main photo is courtesy the Springs Resort & Spa.
Imagine a serene escape where the world’s worries melt away, and tranquility reigns supreme. Spa resorts offer just that — a haven for relaxation and rejuvenation…
— from USA Today 10 Best Spa Resorts in the U.S., July 2025.
I have to agree with Springs Resort attorney Amy Huff when she reminded the Pagosa Springs Town Council, on September 16:
My client has worked with the Town for many, many years, and values the cooperative relationship that the Springs Resort has had with the Town…
Indeed, “cooperative relationship” might be an understatement. In the past, the Pagosa Springs Town Council has been quite willing to give the Springs Resort & Spa pretty much anything and everything they’ve asked for over the past 30 years, as part of the Town’s stated goal of helping to make Pagosa Springs into a premiere tourist destination. Apparently, that goal has been achieved, at least in part, to judge by the USA Today ‘readers choice’ survey declaring the Springs Resort as the No. 1 spa resort in the U.S.
The town voters haven’t been quite so willing to bend over backwards, however. When the Springs Resort applied to the Town government for $79 million in tax subsidies, the Town Council quickly endorsed the subsidy plan. But the town voters had different ideas, and added a new paragraph to the Town’s Home Rule Charter, demanding voter approval for any TIF (Tax Increment Financing) scheme valued at over $1 million.
The current Town Council seems a bit more aligned with the desires of the larger community, and determined last year that the Springs Resort may have been paying too little for the geothermal water (up to 450 gallons per minute) supplied to the Springs Resort from the Town’s publicly-owned PS-5 well.
The current Town Council and staff is also aware of the need to fully justify higher customer fees, when dealing with multi-million-dollar corporations with multiple attorneys, so they hired a reputable engineering firm, Roaring Fork Engineering, to explain why the geothermal water fees paid by two spas — the Springs Resort and the Overlook Spa — ought to be substantially increased over what these spas paid two years ago.
Despite incidental threats of future litigation.
During her presentation to the Council on September 16, Roaring Fork consultant Maggie McHugh explained that the municipal geothermal heating system faces millions of dollars in future costs to maintain and repair an aging system… and that these costs ought to be funded by the customers who use the system, rather than by the community at large — the biggest user being, the Springs Resort.
The Geothermal Rate Study included two financial schedules for the Council’s consideration. Scenario 1 showed the Springs Resort paying about $18,900 in monthly heating and ‘mineral water’ fees, by the year 2029.
(Note that some numbers are ‘monthly’ and some are ‘annually’.)
As mentioned, the fact that these fee estimates are generated by a professional engineering firm may give the Council confidence that they would be accepted by a court of law, should the Springs Resort follow through with the threatened “litigation” mentioned by attorney Amy Huff.
But Roaring Fork went a step further and generated another method of calculating appropriate fees for the various geothermal users — the vast majority of whom use the municipal system only for winter heating rather than for year-round corporate profits.
In Scenario 2, the Springs Resort would not pay a fixed monthly fee but would instead pay a “ticket fee” based on the price charged to customers to use the spa’s “therapeutic” soaking pools. In a sense, this shifts the financial burden from the Resort to the Resort’s customers.
From the Roaring Fork report:
A Mineral Fee is also proposed under Scenario 2. Instead of charging the hot springs resorts directly, the cost is shifted to the hot springs customers as a “turnstile” fee. Specifically, the proposed Mineral Fee is a 2.75% surcharge on all tickets sold as well as a 2.25% surcharge on hotel rooms that include hot springs access.
The Mineral Fee was incorporated into the 20-Year Cash Flow based on the following assumptions:
1. The Springs Resort sells 122,240 day passes per year at $67 per pass.
2. The Springs Resort sells 160 local memberships per year at $480 per membership per year.
3. The Springs Resort sells approximately 25,000 rooms per year at an average cost of $389 per room.
4. The Overlook sells 18,250 day passes per year at $30/ticket per pass.
This fee is expected to provide an additional $460,000 in annual revenue. If implemented, the Town would be able to hire a full-time hydrogeologist and purchase equipment to monitor and maintain the health of the aquifer – an effort that benefits all customers. Hiring and retaining a staff hydrogeologist is estimated to cost $150,000 per year. The remaining revenue would support the Town’s maintenance needs and upcoming capital projects.
Although attorney Huff had asked the Council to delay approval of the Rate Study until her clients could submit input and suggestions, the Council felt differently, and went ahead and adopted the rate Study on September 16, regardless of the threatened litigation.
The Council did not, however, make a choice between Scenario 1 and Scenario 2. Presumably, the Town Council and staff will next take a careful and thoughtful look at the Study, and determine the best way forward…
…understanding that “cooperation” is always an option.
And also, that what seems like “cooperation” to one person might seem like “surrender” to another person.
Incidentally, although USA Today asserts that the Springs Resort has “around 50 mineral pools fed by the Mother Spring, the world’s deepest geothermal hot spring…”
… we actually know better. The Resort’s mineral pools are in fact dependent upon a municipal well — the Town’s PS-5 well — located on the opposite side of the San Juan River from the Mother Spring.
The rest of the information might be correct.
Imagine a serene escape where the world’s worries melt away, and tranquility reigns supreme…
Except for, of course, the threats of litigation.