Read Part One
Mark Weiler, the President of Parelli Natural Horsemanship — one of the largest horse-oriented educational franchises in the world, and the only one headquartered in Pagosa Springs — was a vocal proponent of the new impact fees adopted by the Town Council in May of 2006, noting that the Economic and Planning Systems (EPS) study which established the fee amounts “was based on need, and the cost to provide the services."
"What we are seeing is the evolution of communities realizing the expenses that growth requires. What we are seeing now is that the growth needs to fund the expenses of the [new] infrastructure. In the past, communities subsidized the growth by taxing the current residents at a higher rate than they would be taxed if the development paid its way,” Weiler said, in support of the Council's decision to adopt the new fees.
 Other members of the community were not so sure impact fees were a good idea, when the Town established impact fees totaling about $5,000 per new home — with a portion of those fees, $1,100, earmarked for the proposed Dry Gulch project.
Bart Mitchell, Executive Director of the Archuleta Economic Development Association, was one voice opposing the level set for the new fees at the May 2, 2006 meeting.
“In the general concept, the AEDA Board does support impact fees. But if this [ordinance] goes through, we will in fact have the highest impact fees in all the surrounding counties that we are competing with. If you look at the seven counties in our surrounding area, the next highest level of impact fees is only $925 and that’s in La Plata County. If you look at the City of Durango, their fees are only $2135.”
“When I go about trying to bring in companies [to locate in Archuleta County] it is very hard to compete in this arena, in Southwest Colorado. If you start adding in the other utility fees—PAWSD, LPEA—there is a major impact from all of the fees we are placing on business owners here. If this is passed, the County may potentially pass the same impact fees. I’ve got a company I’m working with right now, that is now reconsidering whether they want to bring their average $43,000 per job into Archuleta County, if these fees pass.”
The County did not, in fact, pass the same fees — but the Pagosa Area Water and Sanitation District (PAWSD) dreamed up its own “not impact fees,” which were nevertheless assessed like impact fees — only on new construction — but lacking the legally required “rational nexus” built in to the EPS-designed fees.
In fact, the way the PAWSD Water Resource Fee (WRF) is collected makes appear to be a tax — not a fee. But PAWSD is not allowed, under the Colorado Taxpayer’s Bill of Rights Amendment (TABOR), to levy new taxes without voter approval. So PAWSD calls their WRF “not an impact fee” — and that fee is assessed on top of another PAWSD fee called the Capital Investment Fee.
Mark Weiler has since been appointed to the Town Council, and has made something of an about-face on the impact fee question. Over the past year, he has been urging the Town Council to allow builders and developers to defer payment of the Town’s impact fees over a ten-year period, rather than requiring a lump-sum payment with the building permit application. The Council approved that arrangement last year.
Weiler has also been urging PAWSD to change their funding model for the Dry Gulch project, by collecting any fees needed for the reservoir from all potential users — and by collecting those fees on a long-term monthly basis, rather than in a lump-sum payment. Currently, a home builder must pay about $10,000 in various fees to PAWSD — or even more, for a large home —before he can stick a shovel in the ground.
If that new home is located in the Town limits, the builder must also pay the Town impact fees.
As noted earlier in this article series, the Town has been collecting the $1,100 in Dry Gulch impact fees on behalf of the San Juan Water Conservancy District. This happens mainly because water districts are not allowed to collect impact fees; that power is reserved to counties and municipalities.
So we have something of an awkward situation. The Town of Pagosa Springs — which does not deliver water to anyone — has been collecting a $1,100 impact fee to help fund a proposed $150 million reservoir in which the Town will have no ownership. They have been handing this money over to the San Juan Water Conservancy District — which also does not deliver water to anyone — because SJWCD is not allowed to collect impact fees. That $1,100 fee was calculated by professional consultants as the correct and legal amount to fund the SJWCD’s portion of the proposed Dry Gulch Reservoir — but those same calculations were rejected by PAWSD, SJWCD’s partner in the proposed Dry Gulch project.
PAWSD has been collecting a $7,200 “not an impact fee” since 2007, based on the projected cost of a 35,000 acre-foot reservoir, even though they still do not have the water rights to fill such a reservoir.
Neither PAWSD nor SJWCD have collected anywhere near the funds they thought they would have collected by now, because around the same time their fees were adopted, the Pagosa Springs construction industry began a downward spiral that has seemingly yet to hit bottom.
Last month, the SJWCD board voted to cease accepting the $1,100 impact fee from the Town of Pagosa Springs. A press release from SJWCD announced that the Conservancy District would focus its energies on some of the lower-priced aspects of the proposed Dry Gulch project, such as funding environmental survey work. The SJWCD asserted the right, however, to begin accepting the impact fees at some point in the future.
This decision probably won’t affect the SJWCD’s financial condition too seriously. The board had expected to collect only $30,000 in impact fee revenues during 2008. They in fact collected a mere $9,000.
It seems unclear how a water conservancy board can expect to help build and operate a $150 million reservoir on $9,000 a year in revenue — but we should perhaps remember that SJWCD is able to apply for grants, and that they received a $1 million grant from the Colorado Water Conservancy Board just two years ago, earmarked for Dry Gulch land purchases.
At any rate, SJWCD seems to be setting its sights somewhat lower as far as helping to fund the proposed reservoir. Whether that decision is based on threatened lawsuits, is unclear.
PAWSD, meanwhile, has so far stuck to their guns and continues to collect its “not an impact fee” on new construction, except that there is very little new construction happening right now. The only thing happening, in fact, are lawsuits which will likely cost PAWSD much of what they will collect in “not impact fees” during 2009.
No one said it was easy to build a massive reservoir without voter approval. Perhaps we will find out more about where PAWSD and SJWCD are headed, when they make their February 23 public presentation of a new funding study by Denver firm BBC Research & Consulting. |