|  |
 |
|
PAWSD Gets Called on the Carpet, Part Seven |
Bill Hudson | 3/18/10
|
|
|
|
|
|
|
|
|
|
Read Part One
“4. The information in the feasibility study used in connection with the application for the loan from the CWCB was not updated at the time of the funding of the debt. It appears that the District was in possession of information that there had been material changes in the projections included in the study.”
That’s the fourth item, in the list of 25 items that our Archuleta County commissioners are asking Pagosa Area Water and Sanitation District to address in the PAWSD annual report to the BoCC.
As I noted in yesterday’s article about a recent Department of Local Affairs report by deputy auditor Dianne Ray, it appears that the BoCC has the legal authority to cancel certain loans authorized to the PAWSD special district if the money has not yet been spent.
 As we will see in today’s article, the numbers that PAWSD shows us — or that it shows to lenders like the Colorado Water Conservation Board — are never complete numbers, nor are they always “up to date” numbers. PAWSD has at hand numerous reports and studies, dating from various years, and is able to select projections and water usage data as needed from those various reports.
Our readers may have noticed in yesterday’s article that the Pagosa Area Water and Sanitation District put the district’s taxpayers another $11 million in debt by submitting a 2008 loan application to the CWCB — and then used most of that money to pay off a previous loan they’d already used to purchase land for their proposed Dry Gulch Reservoir, to be built, PAWSD says, some time in the next 50 years.
That loan application was supported by data and analysis included in a 2007 “Dry Gulch Reservoir Feasibility Study” developed by Durango water engineer Steve Harris.
PAWSD assured CWCB about the repayment of this loan by promising them that PAWSD would be collecting millions of dollars in Water Resource Fees — an impact fee collected from new commercial and residential construction. Here’s a small portion of the feasibility study PAWSD used to justify the CWCB loan.
As you can see from this partial list, PAWSD told CWCB they expected to collect $2.6 million in 2009, contributed by 372 new “EUs” during that construction year.
An “EU” is an “Equivalent Unit.” At one point, a few years ago, an “EU” was equivalent to the amount of water used by an average single family home — meaning that a new home built within the water district would pay a Water Resource Fee equal to “one EU”. It didn’t matter how big or small the home was; they paid for one EU. Each commercial building would pay for multiple EUs, depending on projected water use — with restaurants, for example, generally paying more than retail stores.
That was once upon a time. The “EU” has since undergone a transition, and a larger home within the water district now pays fees based on two or more “EUs”. The formula for calculating commercial EUs has also changed.
What hasn’t yet changed is the enormous amount of money PAWSD promises lenders, like CWCB, will be coming from future WRF impact fees.
During 2010, PAWSD told CWCB, another $2.7 million in WRF fees would be collected. And then in 2011, PAWSD would collect $2.3 million, and so on and so forth, for the next 40 years, with the amount of WRF fees gradually increasing each year from 2011 through 2043, reaching $5.1 million per year — and then dropping suddenly back to $3.5 million per year in 2044, for some reason. By 2050, PAWSD will have collected $150 million — or so they told CWCB in 2008.
You can download the entire 16-page feasibility study as a PDF file, by clicking here.
The 2007 Dry Gulch Feasibility Study is a mix of fact and fiction — in some cases, slightly unbelievable fiction. Nevertheless, it worked its magic to bring in an $11 million CWCB loan.
Instead of using “population growth,” PAWSD uses “EU growth” in its water demand projections, for multiple reasons. First, they collect their impact fees based on number of new EUs. Secondly, they note that "population" generally measures only “permanent population,” but Archuleta County, as a resort destination, gets a considerable amount of tourism and second-home vacationers — water users who are not normally counted as permanent residents.
And third, and perhaps most importantly for loan applications, EU totals always increase, every time a new building is built — even if no one ever occupies the house or business. No matter what else may happen to the economy, every year sees more EUs added to the PAWSD system.
Even if total district water use declines.
The red line shows PAWSD “EU growth” from 2003 through 2007 — the numbers used to justify the CWCB loan. The blue line shows the total amount of water delivered by PAWSD each year — some numbers not mentioned in the CWCB loan application.
This chart shows the water demand per EU, from 2003 through 2007.
How could EUs grow by 14 percent from 2003 through 2007 — while total water demand appears to be dropping? Why didn’t PAWSD mention, in their 2008 CWCB application, that total water demand per user has been declining for the past few years — in spite of a supposedly active tourism and second-home economy?
Are they trying too hard to show a need that may not actually exist?
We know, now, that PAWSD did not collect anything close to the $2.6 million in WRF impact fees they told CWCB would be collected in 2009. Actual collection was only $117,000. It appears, so far, that 2010 will present a similar shortfall.
However, from my research into the PAWSD documents, and into the County and Town building permit records, I don’t believe PAWSD could accurately foretell the size of that shortfall when they submitted the CWCB loan application in early 2008. It appears their EU growth projections were extremely optimistic, but certainly not out of line with the historical EU growth over the previous decade.
The main question I am left with, at this point, is this one:
Why is PAWSD still planning a 35,000 acre-foot reservoir when so many other things are wrong with the PAWSD water system — such as the apparent loss of perhaps 28 percent of the district’s treated water via leaks in the system?
Tomorrow, I hope to take a look at another researcher’s somewhat disturbing take on the Dry Gulch project.
Read Part Eight... |
|
|
|
|
|
| |
|