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PAWSD Gets Called on the Carpet, Part Four |
Bill Hudson | 3/15/10
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Read Part One
When I finished Part Three of this article series on Friday morning, and realized I had so far written about only two of the 25 issues raised by the Board of County Commissioners in their March 8 letter to the Pagosa Area Water and Sanitation District, I wondered momentarily if I had poured myself a taller drink than I could swallow.
The proposed Dry Gulch Reservoir project has now been in the planning stages for almost two decades — 20 years that saw roughly a doubling of Archuleta County’s population. Had that growth rate continued, we could have looked forward to an Archuleta County with a population of maybe 48,000 people here by 2050 — with at least some of them living within the PAWSD water district.
 Since about 2002, PAWSD has been dumping thousands and thousands of dollars into engineering estimates to justify the Dry Gulch Reservoir, and into obtaining the related — and necessary — new water rights to fill the reservoir someday. They’ve also spent many thousands of dollars on legal fees, defending or settling claims about their Water Resource Fee impact fees, and their application for new water rights.
But since Pagosa’s economic downturn became evident to everyone, starting in 2007, it has seemed more and more obvious that the PAWSD population-growth predictions, looking ahead over the next 50 years, weren’t going to hold water.
PAWSD has found itself back before the Colorado Supreme Court for a second time — once again challenged by the environmentally-conscious national fishing organization, Trout Unlimited — and spending even more thousands of dollars defending those highly-questionable population growth figures.
During their 20 years of planning for Dry Gulch, however, the PAWSD special district has remained basically immune to questioning by other elected governmental leaders.
Then in July, 2008, the Archuleta Board of County Commissioners passed a resolution, stating that the BoCC could not support a community reservoir larger than 12,500 acre-feet.
PAWSD was then collecting impact fees based on a projected need for a 35,000 acre-foot reservoir — big enough, and expensive enough, to service maybe 100,000 county residents.
At that meeting, BoCC Chair Bob Moomaw stated his main concern.
“Building a 35,000 acre-foot reservoir would use up the available capital in the community and eliminate the ability to work on projects that require capital in the County.”
After expressing doubts that any construction of new roads, parks and public buildings could be accomplished if PAWSD did not downsize their plans — and fees — Moomaw grimaced and recited the reservoir project’s cost, “$150 million, and those numbers were several years ago.”
That cost estimate has remained a moving target since PAWSD began publishing numbers in the 2003 Harris Report.
Since 2008, two new County commissioners — Clifford Lucero and John Ranson — have joined Moomaw on the BoCC, and on March 8 issued a letter, signed by all three commissioners. That letter spells out 25 issues that the BoCC wants addressed in an “annual report” to be submitted by PAWSD to the BoCC. Issue number three deals with exactly that “moving target” — the ever-changing PAWSD reservoir cost estimates.
Issue Number Three: Spiraling reservoir cost projections
The BoCC letter points out that the engineers’ estimates for the Dry Gulch Reservoir has gone through numerous upward revisions since Durango water engineer Steve Harris first suggested a reservoir cost of $12.9 million — and that included a $6.9 million improvement to the Snowball Water Treatment Plant. PAWSD used those numbers to build its 2004 application to Durango water court judge Greg Lyman for additional water rights — enough water to fill the proposed 35,000 acre-foot reservoir twice per year.
The district currently uses about 2,000 acre-feet per year, which includes the water used to irrigate our local golf course. PAWSD was asking, then, for water rights equal to about 30 times its current water demand.
What was PAWSD going to do with all that water? We will be discussing one possible answer to that question later on in this series.
But first, back to the "moving target" estimates published since 2003.
Governments are somewhat notorious for underestimating the final costs of large projects. The Town of Pagosa Springs, for example, knew years ago that it needed to upgrade its sewer treatment plant, and add additional capacity, if it wanted to allow its downtown population to grow. As I recall, the original estimate, back in 2003, was about $2.5 million for a new state-of-the-art treatment plant.
By the time the Town finally got its design finished, the estimated price had risen to $5.9 million — and when the bids came in, the low bid was $6.5 million, over twice the price of the original estimate. The Town didn’t have that higher amount of financing available, and is still scrambling to fund the project, seeking grants and loans.
That project had increased in its estimated cost, since 2003, by about 260 percent.
Also in 2003, PAWSD asked Durango water engineer Steve Harris to present a study showing the cost of developing a range of new water supply sources — including, as one option, a new reservoir in Dry Gulch. Harris came up with an estimated cost of $12.9 million. That price included an upgraded water treatment plant. Continued...
Last year, PAWSD announced that the cost of the Dry Gulch project would be about $357 million, based on estimates developed by prominent engineering firm, MWH America.
In other words, the Dry Gulch project had increased in its estimated cost from the original $12.9 million to $357 million.
While the Town’s sewer plant estimate has increased by 260 percent, the PAWSD Dry Gulch estimate has increased by 2,800 percent.
“The dramatic and material changes in the estimates of the cost of the Dry Gulch project over such a short period of time seem to indicate that the District does not have the processes or personnel capable of developing — or overseeing the development of — reasonable cost estimates for planning major projects,” suggest the County commissioners in their March 8 letter.
Issue Number Four: CWCB Loan Application Discrepancies?
In order to purchase the first half of the property necessary for the proposed Dry Gulch Reservoir, PAWSD asked the Colorado Water Conservation Board for a $11 million loan. As we have just seen, the estimated price of the finished reservoir has increased by 2,800 percent since 2003.
The County letter suggests that the feasibility study which PAWSD submitted to CWCB in support of their loan request, “was not updated at the time of the funding of the debt."
We’ve also noted that the population growth rate for Archuleta County, and for the PAWSD district, changed substantially starting in about 2007.
“It appears that the District was in possession of information that there had been material changes in the projections included in the [feasibility] study.”
What new information did PAWSD have about the proposed Dry Gulch project — that they didn’t share with CWCB when the loan request was submitted, and subsequently approved?
Read Part Five... |
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