Photo: The Vista Wastewater Treatment Plant on Lyn Avenue, just north of the Vista mobile home park.
Yesterday, I noted some comments made at the October 1 meeting of the Pagosa Springs Sanitation General Improvement District (PSSGID) board meeting.
The PSSGID is a supposedly independent district, formed decades ago to operate the downtown Pagosa sanitation system, which includes miles of underground pipes, lift stations, and a pumping system that sends the downtown wastewater seven miles uphill to the Vista treatment plant operated by Pagosa Area Water and Sanitation District (PAWSD).
The two sanitation districts are independent of each other in terms of governance and budgets, but ‘joined at the hip’ as a practical matter. Both districts are funded mainly by customer fees, from a separate set of customers.
The Pagosa Springs Town Council acts as the PSSGID board, which gives the Council the ability to make decisions, without too much fuss, about moving tax money from Town bank accounts to the PSSGID, as needed. One such decision was made on September 19, to ‘loan’ $500,000 to PSSGID from the Town’s general fund.
Disclosure: I’m a Town resident, and my family currently pays about $800 a year for PSSGID service. This editorial series reflects those personal concerns.
On Tuesday, October 1, the PSSGID Board (the Town Council) heard some proposals from their new financial advisor, Joey McLiney, about ways to fund bonds for sewer repairs and upgrades.
According to Mr. McLiney, the “elegant solution” for servicing perhaps $40 million in bonded debt, to be used for PSSGID projects, would be a new Town sales tax amounting to perhaps 1/2 of 1%. Unlike the current 4% County sales tax which is shared 50/50 between the Town and County, this new tax revenue — perhaps $2 million a year — would not be shared with the County government, but would be dedicated to PSSGID projects and debt service.
Mr. McLiney estimated that the average household in Pagosa would spend less than $10 a month on the increased sales tax, as a result.
An alternative funding method would be to increase PSSGID customer fees from $66.50 per month to perhaps $175 per month.
Part of the difference in those two impacts comes from the fact that the 0.5% sales tax would be paid partly by about 13,000 local residents living outside the PSSGID district, and by visiting tourists.
Increased monthly fees — if that approach were taken instead — would be paid only by the 1,600 business and residential sewer connections inside the PSSGID district.
Given that choice, the town voters might find a proposed 0.5% sales tax to be an attractive option.
The residents living outside the PSSGID would not be allowed to vote on the tax increase. Only town voters would vote in the election, possibly to be held in November 2025. And only the PSSGID customers would benefit directly from the revenues collected.
I would suggest emphasis on the word “directly”. Some benefits could be ‘indirect’.
At the October 1 meeting, Mr. McLiney was throwing a lot of information and options at the PSSGID Board, and it seemed obvious to me that some of the Council members were confused by the complexity of Mr. McLiney’s proposals.
Mayor Shari Pierce, in particular, expressed her reluctance to make any type of decision on the bond options without getting a deeper understanding of the issues. Perhaps the Town should seek to share any tax increase with the County?
“I just feel like we should discuss this with the Board of County Commissioners, if we want to go for a sales tax…”
Mr. McLiney:
“I think you’re exactly right. You can say, ‘Hey, commissioners, we have a $40 million problem. We think this is a solution. Do you have a better suggestion?'”
The Mayor mentioned the County’s ongoing problem with deferred road maintenance.
Council member Mat deGraaf:
“Well, according to the survey, the County has a ‘trust’ issue even more than a roads issue… I feel like tying ourselves to them is like tying ourselves to a lame duck…”
Mr. deGraaf is here referring to a 2022 survey by Magellan Strategies — commissioned by the County government during a campaign to increase the County sales tax — which indicated that many voters simply didn’t trust the BOCC to spend the money wisely. Denver-based Magellan Strategies surveyed 1,000 likely Archuleta County voters, to discover how to best sell the proposed sales tax increase to the taxpayers.
Only 27% of the voters surveyed “strongly agreed” or “somewhat agreed” that the BOCC spends tax money wisely. 63% disagreed with that statement.
The same survey indicated that voters felt a higher level of trust in the Town government.
Here in the Daily Post, we’ve often touched on the (embarrassing?) failure of the Archuleta Board of County Commissioners to understand the political currents in their own community. In spite of clearly articulated warnings from the people around them, the three County commissioners went ahead and placed the 37% sales tax increase on the November 2022 ballot — Ballot Issue 1A, estimated to generate about $6.5 million annually — and watched it get rejected by close to a 3-to-1 margin…
The opposition to the County sales tax was even higher than the 63% suggested by the Magellan survey. Based on recent history, coordinating a request for a sales tax increase with the County government appears to be a very poor idea, in my humble opinion.
But what are the ethical issues around the Town government asking only town electors to vote on a sales tax that would be collected from the entire community and from tourists, but which would directly benefit PSSGID customers?
At the October 1 Council meeting, I stood up to the microphone during ‘public comment’ and proposed that — historically — the town has been the heart of our resort economy, while also being home to some of the lowest income families in the community. I encouraged the PSSGID Board to look seriously at the proposed 0.5% sales tax suggested by Mr. McLiney.
A functional town, I argued, will benefit the entire Archuleta County community.
Another ‘indirect benefit’ for non-PSSGID homes and businesses: the $40 million in repairs and upgrades would include coordinated improvements to the PAWSD system, possibly to help fund a new state-of-the-art wastewater treatment plant.
At the conclusion of the meeting, the Council voted 6-to-1 to initiate the process of selling $4.5 million in bonds, to be paid for by PSSGID customer fees and used for critical repairs to the downtown sewer system.
The sales tax proposal will be discussed, no doubt, at future meetings… perhaps to be placed before the town voters in November 2025.