The Board of County Commissioners approved a resolution Tuesday opposing the construction of any reservoir larger than 12,500 acre feet at Dry Gulch, one mile north of the Town of Pagosa Springs. The Pagosa Area Water and Sanitation District has been planning — and charging new customers impact fees for — a $150 million (2006 dollars) 35,000 acre-foot reservoir at the Dry Gulch site. PAWSD currently distributes about 2,000 acre-feet of potable water. Continued...
Pagosa Area Water and Sanitation District President Karen Wessels defended current plans for a reservoir up to 35,000 acre-feet, and the purchase of property to accommodate that size reservoir, at Tuesday's special BoCC meeting. |
BoCC Chair Bob Moomaw stated his 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, Moomaw grimaced and recited the reservoir project’s cost, “$150 million, and those numbers were several years ago.”
Readers should note that some steel components required for the water treatment plants, pipes and dam reinforcement have risen 300 percent since the project was last priced, and that diesel fuel and heavy equipment costs for the 3 million cubic yards of earthwork have more than doubled. Few expect the 35,000 AF project to cost much less than $300 million in 2009 dollars. Few wish to guess what the project might cost in 2020, when construction is very tentatively scheduled to commence.
Commissioner Ronnie Zaday offered a motion “supporting the Pagosa Area Water and Sanitation District’s acquisition of real property for a maximum 12,500 acre-foot reservoir at Dry Gulch.”
Karen Wessels, the President of the PAWSD Board, presented a very assured and confident defense of PAWSD plans and impact fees, to a large crowd which remained largely unconvinced.
 Wessels conceded that current PAWSD impact fees are based on the cost of a 35,000 AF project, but asserted, “We don’t know what size the reservoir is going to be.”
Wessels characterized the focus on 35,000 AF as “premature and inappropriate.” She added, “The appropriate data is the data from now until we start designing the project, roughly from 2008 until 2018.”
“It was pointed out in one of our board meetings, that building a 12,500 acre-foot reservoir would cost nearly 63% of the cost of a 35,000 AF reservoir,” Wessels noted. That figure appears to conflict with the cost estimates from PAWSD own water engineer, Steve Harris, in 2003 and 2006, and public statements from PAWSD Finance Director, Michelle Tressler, which have assigned the two models nearly identical per acre-foot costs.
Wessels then cited the rapid changes PAWSD had made to respond to the worsening local economy. She highlighted the new and much reduced commercial fee structure enacted this month; she did not mention equally impressive reductions extended by PAWSD to multifamily and affordable housing projects. PAWSD has also reduced its wastewater impact fees dramatically for commercial and multifamily projects.
PAWSD Board member Bob Huff, who has publicly stated that the 12,500 AF model is the likeliest to be built at Dry Gulch, added, “You have sent a message and it has been received.” Huff, in his trademark learned and informal style, objected to “your assumption that, come hell or high water, if you’ll pardon the pun, we are going to build a 35,000 AF reservoir.”
Huff reiterated his focus on acquiring the land necessary for whatever reservoir is to be built on the Dry Gulch site, and reassured the BoCC that PAWSD had hired the engineering firm MWH, which he characterized as “international and big-time,” to recalculate growth, cost and impact fee numbers.
Huff closed, “This resolution really doesn’t add a thing.. This resolution becomes an official document from the BoCC and it has the potential to cause mischief.” Huff expressed the worry -- which, in fairness, he characterized as remote – that the BoCC could jeopardize the $11.2 million loan which PAWSD has received from the Colorado Water Conservation Board. “Not until November will it actually be finalized that we are going to get the 3.5% loan.” Huff estimated the cost of losing the CWCB loan at $4 million.
Wessels’ final assertion — that she and PAWSD Finance Director Tressler had refigured the water resource fee for the smaller 12,500 AF model and arrived at over $10,000 (a nearly 50% increase from present $7210 fee) — was greeted with some disbelief. Tressler, in a phone conversation Wednesday, cautioned that the $10,000 figure was a worst case scenario, assuming a very high price ($150 million, for instance) and very low growth (15,000 taps). At a bare minimum, a 12,500 acre-foot reservoir would serve 30,000 taps. Applied to each tap, a $10,000 impact fee would raise $300 million in 2008 dollars, a price no one would ascribe to a 12,500 AF project — at least not this year.
Audience members, including this writer, then spoke in support of BoCC action to oppose any reservoir larger than 12,500 AF. Not a single audience member spoke against the resolution.
The main points made by critics of present PAWSD plans:
- PAWSD plans for the project are just as vague as the San Juan Water Conservancy plans for a reservoir which were rejected by nearly 60% of the voters in 2004
- Why base impact fees on the cost of the largest, most expensive model rather than the likeliest model?
- Why is this project still run by San Juan Water Conservancy President-In-Fact Fred Schmidt, given his court determined “disposition to act fraudulently and disregard the right of others”? (A characterization made by the same judge, Gregory Lyman, now deciding the Water Districts’ water rights case.)
- New growth fee revenues are running less than 5% of forecasts and are likely to fall more than $10 million short for 2008 and 2009 alone
- The 35,000 AF model will require another $10 million of land purchases
- The Snowball Project which will rebuild the Town water system is the replacement of an existing system which should not be assessed to new users only
- Every water rights request, financial plan and engineering and environmental assessment developed by PAWSD is explicitly based on the 35,000 AF model
- Town, County and Fire and School Districts will not be able to raise sufficient funds for their own capital project unless PAWSD builds a more reasonable reservoir.
Local businessman -- and Southwestern Water Conservation Board member – J.R. Ford took exception to the recent PAWSD talking point that a 12,500 AF could cost nearly as much as the 35,000 AF Project and to the contention that impact fees would be greater for the smaller project. “I will dispute with anybody that you can build a 35,000 acre-foot reservoir for a fraction of the cost of a smaller reservoir.” Ford was blunt, characterizing that assertion as “hogwash.” He added more in anger than in sorrow, “It is sad that they are standing here and saying this.”
Ford looked directly at Wessels and Huff and advised, “Sit on this property. Sit on your plan. Hire your engineer and find out what you really have to build for this community. It is the changing of the plan and what you are telling the public over the past four or five years that has got this thing stirred up.… When I built my house for my wife, she could have said, ‘I want a 10,000 square foot house because it is cheaper per square foot.’”
Ford then complained that the Water Districts were misrepresenting County support for the 35,000 AF project.
Ford’s claim is unquestionably true.
For example, page 11 of the Findings of Fact in PAWSD’s current brief before Judge Lyman claims that Archuleta County is funding the purchase of land for the construction of Dry Gulch. This is untrue. Page 24 of the brief itself notes the “desire of Archuleta County to participate in the project.” The BoCC voted against participating in the project in 2006. Of course, nowhere in the brief or the findings of fact is the fact that, in 2004, nearly 60% of the County voted against a reservoir proposal 1/15th the size of the present project.
Ford closed with the advice to “Send legitimate people to make legitimate comments to the public.” While Wessels and Huff objected with an audible chorus of “who,” it was clear “who” Ford was referencing. Not Wessels and Huff, people of unquestionable integrity, but Fred Schmidt, who has managed to juggle the public relations, the behind-closed-doors negotiations for almost $20 million in Dry Gulch land purchases and swaps, — while he was juggling the numerous court dates for his numerous business frauds.
Moomaw closed with common sense about devoting all of the public capital of the entire county to one project for forty years, “It is not going to do any good to have a huge reservoir and no roads, or vice versa.”
He ended with a clear warning about adopting the numbers of any consultant without consulting the local economy. “It happens every time, that you hire a firm to tell you what an impact fee should be, and that theoretical number is always more than the market will bear.”
Wessels closed the PAWSD appeal with a very gracious invitation for more citizens to attend PAWSD meetings as reservoir issues are examined over the next year.
The board then voted unanimously to formally oppose any reservoir at Dry Gulch in excess of 12,500 acre feet. |