America needs to step off the kinetic growth treadmill and embrace an approach that truly builds wealth and serves our citizens. We need to shift to a bottom-up approach for building our cities, one freed from the pressures of national growth targets. Our cities need to, once again, become strong towns…
— from the Charles Marohn op-ed, “This ‘Ponzi scheme’ surrounding development leaves most cities and towns functionally insolvent” published on the MartketWatch.com website, December 21, 2019.
I suppose the Christmas season can seem like a treadmill to some people… trying to find, and afford, appropriate gifts for family and friends… often going into debt in an effort to show how much we care about each other, our children, our grandchildren.
I suppose local government leaders often feel the same way, as they spend our taxes on the things they imagine we want, or things they think we need. Feels like a hamster wheel, I’m sure. Never enough money… If only the community, and the tax receipts, would grow faster… Then maybe we could keep up…
Whether America will ever “get off the growth treadmill” is somewhat doubtful, unless we experience a Great Recession that lasts much longer than the last one. Pagosa Springs got off the treadmill for a few years, between 2007 and 2013. Unintentionally, of course.
I suppose that could happen again.
Back in 2008, the elected Pagosa Area Water and Sanitation District (PAWSD) board and the appointed San Juan Water Conservancy District board colluded to spend about $10 million in loans and grants to purchase 660 acres of dry ranch land as the site for a new water reservoir, tentatively named the Dry Gulch Reservoir. The alleged justification for spending $10 million on a dry gulch — and for planning a $357 million, 32,000 acre-foot reservoir project — was the unstoppable growth of the Archuleta County population. The two water boards had enlisted a Durango-based water engineer, Steve Harris, to project the community’s population growth, and Mr. Harris convinced the two boards that the demand for PAWSD water would exceed 5,000 acre feet annually by the year 2020, including almost 900 acre feet for the Pagosa Springs Golf Course.
We were obviously facing a severe water crisis.
But the actual demand for drinking water this year, 2019, has been about 1,300 acre feet — very close to the same demand we had in 2008, when our two water boards were frantic to spend $10 million on a dry reservoir site. I believe the Golf Course used about 300 acre feet? The abysmal inaccuracy of the Steve Harris projections was due, in part, to the population decline in Pagosa during the Great Recession — which was already kicking in locally in 2007, even though the national recession didn’t really hit until 2008. (But Mr. Harris’ projections were nevertheless ridiculous in the first place.)
The question facing us, in the absence of another Great Recession, is whether we can get off our unsustainable growth path. Mr. Marohn’s argument is that American cities and towns have accepted an automobile-centric development pattern that’s ultimately destined to drive us into municipal bankruptcy — but that argument doesn’t seem to hold water among some elected leaders here in Archuleta County. The Archuleta Board of County Commissioners have embarked lately on a real estate spending spree, and the Town Council is currently considering the idea of handing millions of dollars in future tax revenues to Texas-based developer David Dronet — future tax revenues extracted from our schools, library, fire district, medical center, and water districts. The Town is also planning its new $6 million shop facility, without getting voter approval for the required debt.
The Town and County are currently flying high on tax revenues, with double-digit sales tax increases month after month, thanks in part to new retail stores — Walmart, Tractor Supply, an extensively remodeled City Market, and soon, the new Natural Grocers. These retailers all arrived or remodeled following the Great Recession. The sales tax increases have been augmented by a new state law that newly requires online retailers, located anywhere in the US, to submit sales tax to the community where the product is delivered. We note that these retailers do not pay sales tax; they merely collect it from us, the purchasers. We, the residents, pay the sales tax.
In 2006, prior to the Great Recession, the Town budget was around $4.5 million. This year’s Town budget exceeds $12 million.
So right now, our local governments are feeling flush with cash. And that can easily lead to the very problem that Mr. Marohn was trying to address in his MarketWatch op-ed. Population growth and economic development encourage local governments (and state governments) to make unsustainable investments — to build more and more public and private infrastructure that functions wonderfully for the first 25 years or so, but ultimately cannot be maintained without large increases in sales and property tax rates.
Or worse yet, must be maintained via large increases in government debt.
While we’ve watched the pocketbooks expand at the Town and County government level, however, the situation facing the average working family has deteriorated, due mainly to rising home prices and spiraling rental rates.
On Friday in Part Four of this editorial series, we listened to a bit of the discussion that took place at the Town Council regular meeting last Thursday, concerning the Town’s new and controversial ‘Urban Renewal Authority’ — an authority created not to renew anything urban, but rather to deliver tax incentives to future developments on vacant, never-before-developed land. The Town Council made it clear, by their 6-to-1 vote last week, that they want the Town Council to maintain control of the new authority, rather than share power and responsibility with all the taxpayers who will be paying for the incentives.
We’ve heard previous hints that future URA-funded developments might include affordable housing. Potential housing was mentioned, for example, by Council member Nicole DeMarco when she voted in favor of the URA resolution on November 5.
“I think we’re constantly trying to address things that market economics won’t address. That’s what the public sector does. And I feel — particularly when we talk about affordable housing — I feel really limited on what it is we can do to move forward with that. I think this Authority will give us the ability to push a project, that might consider only market-rate housing, into the ability to have affordable housing. So I think the Authority is a tool for us to consider.”
Ms. DeMarco was, however, the only Council member who disagreed with the December 19 Council vote to prevent local special districts from having full representation on the URA commission. Apparently, the rest of the Council believed that representatives from the special districts, who in turn represent their constituents and the taxes paid by those constituents, would make questionable decisions on behalf of said constituents?
While the Council itself would make excellent decisions?
The petition process to form the URA was initiated by developer David Dronet, managing principal at the Springs Resort — and by Jack Searle and his company, BWD Construction, who owns the vacant 27 acres adjacent to the resort, and who has a real estate agreement with Mr. Dronet’s company, Dronet Development Group. Both Mr. Dronet and Mr. Searle have assured us, at public meetings, that they have no intention of building any affordable housing on the vacant 27 acres.
None. Zero. Zip.
So we wonder. Is an “urban renewal authority” a useful tool for encouraging affordable housing, in a rural town suffering from a housing crisis?