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On the Same Page, But Millions Apart, Part One |
Glenn Walsh | 4/21/08
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In 2006, the Town of Pagosa Springs and the Pagosa Area Water and Sanitation District each imposed a new fee for a reservoir to be built one mile north of Town.
They proposed two very different fees for two very different reservoirs.
The Town fee is based on a 12,500 acre-foot reservoir recommended in the 2003 Appraisal Report of PAWS’s engineers, Harris Water Engineering. The Town consultants, Economic and Planning Systems, divided Harris’s estimated cost of $40,500,000 by the almost 36,000 households (or household equivalents for businesses) the reservoir would serve. This resulted in a fee of $1129.
 PAWS ignored their own 2003 Appraisal Report (which evaluated 4,000 and 12,500 acre-foot reservoirs for Dry Gulch) and based their fee on a proposed 35,000 acre-foot reservoir, large capacity pump station and all related water treatment plants. They divided the estimated cost of $145,307,501 over the first 20% of users (ascribing no cost at all to the next 80% of users) to arrive at a fee of $6,343.
The Town and PAWS agreed to disagree about their fees in 2006.
Local builders and businessmen complained bitterly, but organized no opposition to the imposition of the PAWS reservoir fee in 2006. In the ailing national and depressed local economy of 2008, agreeing to disagree about this fee is no longer agreeable to them.
At last Tuesday’s PAWS meeting, the water district board and local businessmen debated the size, cost and financing of the proposed Dry Gulch Reservoir.
Or at least they attempted to.
One of the more interesting features of the debate was how nearly every question about the reservoir became an answer about capital investment, not water storage. This is perhaps not surprising, given that PAWS has no firm idea of the size or cost of the reservoir it will build at Dry Gulch.
Some background.
The plans of PAWS and the San Juan Water Conservancy District for a 35,000 acre-foot reservoir were dismissed unanimously by the Colorado Supreme Court last October and remanded to the local water court. The Court’s water law specialist, Justice Gregory Hobbs, has written the book on Colorado water law, and he threw it at PAWS and the SJWCD, rejecting their planning period of 100 years, their conditional water request of 64,000 acre-feet per year, and their population projections (which projected a 2010 Archuleta County population of 19,598, a likely 60% overestimate) as unsupported.
PAWS and SJWCD have responded by reducing their conditional water request by 55% and their planning period to 70 years in the case now before Water Court Judge Gregory Lyman. They have not, as yet, reduced the Water Resource Fee of $7210, which is based upon the 35,000 acre-foot reservoir with a pumping capacity twice the size the water districts are now requesting.
Will Judge Lyman risk being overturned by the Supreme Court by, first, accepting the population projections of PAWS’ engineers rather than the Colorado State Demographers Office, and, second, agreeing to a planning period of 70 years, which is twenty years longer than planning periods granted to the most complicated Front Range water projects?
Supreme Court Justice Nathan Coats showed the greatest willingness to extend a planning period beyond 50 years in his concurrent opinion. But not for Dry Gulch. Coats characterized the planning challenges of Dry Gulch as “almost trivial.”
The odds that Lyman will approve a planning period beyond 50 years are not great. The water districts will probably be restricted to the less grandiose $40 million reservoir their engineers recommended in 2003, which makes a defense of the present Water Resource Fee based on the $145 million reservoir a challenge.
Local businessman Steve Van Horn opened that challenge by asking for a rationale for why the PAWS reservoir fee is set 600% higher than the Town’s.
PAWS District Manager Carrie Weiss replied, “That was two years ago and, I am sorry, I can’t store all this stuff.” Curiously, when Weiss was asked later in the meeting about the number and cost of exemptions granted during a brief grace period following approval of the fee, she replied with no hesitation, “815” and “$5.1 million dollars.”
Local realtor Mike Heraty asked, “What is the water capacity that you are trying to build to and the number of customers you plan to serve with that capacity?”
Weiss answered, “We have a chart that I would be happy to give you, but I don’t have that committed to memory right now.”
Heraty responded with disbelief, “Nobody on this board knows how many customers you are going to serve?”
Board Chairman and President Karen Wessels replied, “In equivalent units, the projected growth, I believe, is a thousand.”
Local businessman Bruce Hoch was incredulous, “A thousand people?”
Wessels repeated, “A thousand equivalent units, and Steve [Harris] goes over that in his report.”
Wessels' estimate, unfortunately, was less than 1% the actual capacity of the Dry Gulch Reservoir that the present Water Resource Fee is based upon, according to the Harris report.
Seeking a definition of “equivalent unit,” Heraty followed up, “An equivalent unit equals how many people?”
Wessels answered, “About 2.5 people.” An equivalent unit represents 1.5 people in district calculations. No one on the board corrected Wessels, who had overestimated the size of the basic unit of water measurement by 67%.
No implication of incompetence is meant here. Wessels is a volunteer board member, and her board wins high marks from most observers for being the first PAWS board in a long time to reinvest in the district’s declining capital structure. Additionally, the PAWS board is the only local district with a credible and detailed long-term capital construction and reinvestment program.
During Tuesday’s session, any question about capital investment and past neglect was answered with admirable candor and impressive intelligence. Assistant Manager Gene Tautges and Finance Manager Shellie Tressler very effectively conveyed the complex measures of past neglect, expected wear and tear, regulatory demands and growth which figure into their calculations of capital spending.
However, any question about the size, cost and financing of the reservoir, which was after all the subject of the discussion, was answered with much less accuracy, and an almost dismissive amnesia about the document which established the Water Resource Fee in April 2006. A document based explicitly on a 35,000 acre reservoir costing $145,307,501.
No PAWS board member or official Tuesday evening pretended a 35,000 acre reservoir was going to be built. When board member Bob Huff, with characteristic good sense, offered his opinion, “The size, in my humble opinion, is more likely to be a 12,000 acre-foot reservoir,” there was a roundtable of nods and yesses.
Why does this recognition have no implications? Why is the full cost of a not-to-be-built 35,000 acre-foot reservoir still being charged to the first 20% of the folks who it would be filled for?
More tomorrow... |
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