The Pagosa Area Water and Sanitation District (PAWSD) Board of Directors met Tuesday night and among other things, adopted amended 2008 and final 2009 budgets. As a result, water and wastewater service charges will not increase in the coming year.
In 2007, PAWSD entered into a contract to purchase 666 acres of land to accommodate a proposed Dry Gulch Reservoir two miles northeast of Pagosa Springs. To pay for the purchase, the district obtained an $11.2 million loan from the Colorado Water Conservation Board.
In the fall of 2007, during its 2008 budget preparations, the district believed the land purchase and loan would close before the end of the year. However, the actual closing (and funding of the loan) ultimately took place in early January 2008, forcing the district to amend its 2008 budget.
The amendment reflects an increased “Beginning Balance” of the district’s Water Enterprise Fund to include the loan. A similar increase in “Capital Projects” under expenditures of the same fund illustrates the land purchase. Other relatively minor budget adjustments show actual revenues and expenses incurred through November (rather than estimates consequent to initial budget preparations), as well as updated projections for December.
Perhaps the most invigorating corollary to come from the 2009 PAWSD budget is the district’s decision to hold water and wastewater service charges to 2008 levels. Although certain operating expenses are expected to increase in 2009, revenues from water and wastewater service charges are also expected to increase by approximately $385,000 and $86,000, respectively.
The projected rise in revenues will likely result from an increase in service charges initiated during this year’s May/June meter reading period, as well as associated fees attached to new connections added to both systems. PAWSD believes the added revenues will adequately fund both services, precluding any need for higher 2009 service charges.
Due to the complexity of its infrastructure, related services and proposed capital projects, fully comprehending the 2009 PAWSD budget is challenging, to say the least. Nevertheless, following is a summary of its various “funds”:
• General Fund — beginning balance of $618,155, total revenue of $1,356,527, total expenditures of $1,101,084, ending balance of $873,598.
• Special Revenue Fund — beginning balance of $940,151, total revenue of $30,000, transfer to capital projects of $970,151, ending balance of $0.
• Capital Projects Fund — beginning balance of $0, total transfers from General and Special Revenue funds of $1,019,451, total expenditures of $1,019,451, ending balance of $0.
• Debt Service Fund — beginning balance of $10,280, total revenue of $1,287,733, total debt service payments and transfers to other funds of $1,262,497, ending balance of $35,516.
• Water Enterprise Fund — beginning balance of $17,480,553, total revenue of $12,532,150, total expenditures of $12,711,950, ending balance of $17,300,753.
• Wastewater Enterprise Fund — beginning balance of $4,867,058, total revenue of $2,080,948, total expenditures of $2,325,185, ending balance of $4,622,821.
While some may wonder why PAWSD must maintain such high balances in its water and wastewater funds, a partial answer is fairly simple. If, for instance, a landslide wipes out a long stretch of water or sewer line, relative repairs could cost millions.
Additionally, once loan expenditures and reimbursements are taken into account for each fund, the unrestricted reserves should cover nine months to a year of operating expenses and debt service.
With an eye toward maintaining service levels and infrastructure, PAWSD has also included budget items that will reduce future costs, protect the environment and promote water conservation. Among them are:
• accumulating data for a future energy efficiency audit;
• continued investment in the beneficial use of biosolids, thus reducing costs and easing impacts on the local landfill;
• upgrading utility management software;
• converting to radio-based meter-reading technology, thus reducing water loss to heretofore undetected leaks.
According to the PAWSD budget conclusion, “The Pagosa Area Water and Sanitation District is in a stable financial condition and well-poised for the challenges presented by growth in the community. The 2009 Budget is balanced, meets all statutory requirements and follows the long-term capital plan established to provide quality services to the community.”