PAWSD amends Capital Investment and Water Resources fees

The Pagosa Area Water and Sanitation District has officially amended its Capital Investment fees (CIF) and Water Resources Fee (WRF).

On March 24, the PAWSD Board of Directors unanimously approved a resolution modifying assessments of district water and wastewater systems Capital Investment fees (CIF), and a water system Water Resources Fee (WRF). The move came as a result of changes recommended in a 2008 planning model update, and became effective immediately.

A few years ago, PAWSD and community taxpayers decided that newcomers should pay the costs of additional raw water storage — and all related infrastructure — made necessary by increased demand. Therefore, in 2006, the district created a WRF component as part of its water system CIF, to help offset all the costs associated with a proposed Dry Gulch Reservoir.

The 2001 CIFs, meanwhile, generate revenue to pay for added treatment and delivery of potable water to — or the collection of wastewater from — new users throughout the PAWSD district.

In August 2008, the PAWSD board adopted a resolution establishing a new method of calculating Equivalent Units (EUs) — a widely accepted measure of water demand — thereby establishing a water system CIF of $2,575 per EU, a wastewater system CIF of $3,195 per EU, and a WRF of $7,210 per EU.

The amounts were based on 2006 cost estimates of future facilities, including Dry Gulch (or projects that would provide the district a similar water yield), the expansion of water treatment capacity and replacement of the Snowball Pipeline system.

In late 2008, however, the district invested substantial sums of money reevaluating district growth projections, future water and wastewater demand, future capital facilities necessary to meet such demands and the cost of such facilities. Based on a likely annual growth rate of 3.9 percent through the year 2055, the process generated several reports and recommendations, including the revised CIFs and WRF.

In part, the March 24 resolution reads, “The CIF and WRF shall be distinct assessments in the amounts described below for any application for a water or wastewater system connection or when water and wastewater use has expanded through an existing connection. Such assessments may be increased annually by three percent (3%), or otherwise at the discretion of the Board.”

The new assessments are as follows:

• Water system CIF, $3,579 per EU (an increase of $1,004).

• Wastewater system CIF, $4,252 per EU (an increase of $1,057).

• WRF, $5,617 per EU (a decrease of $1,593).

While a new water connection previously cost $9,785 in combined CIF and WRF, it now costs $9,196, or $589 less than before. However, a new wastewater connection, which previously triggered a $3,195 CIF, now spawns a $4,252 CIF, for an increase of $1,057. Overall, for both connections, consumers now pay $468 more than they would have prior to March 24.

According to the March 24 resolution, conditions subject to a CIF include, “Any construction or new development requiring a water or wastewater connection permit, or any expansion of water or wastewater use under an existing connection permit (whether disclosed to the District or later discovered by the District), shall require payment of the Water System or Wastewater System CIF for each such change. Payment of the CIF shall be due and payable at the time that application for a connection permit is made to the District, or when the District learns of an expanded use through an existing connection.”

The WRF shall apply to, “Any construction or new development requiring a water connection permit, or any expansion of water use under an existing connection permit (whether proposed to the District or later discovered by the District), that results in the creation of new EUs of water demand will require payment of the WRF for each such EU served by the connection. Payment of the WRF shall be due and payable at the time that application for a connection permit is made to the District, or when the District is notified or learns of an expanded use through an existing connection.”

In respect to both fees, the resolution states that payment of the CIF or WRF in no way relieves the applicant from paying all other applicable district fees then in effect.

However, during 2009, district customers may choose to amortize their respective WRFs over a five-year period, at an interest rate of 5 percent per annum.

The amortization period begins upon application for a connection permit, or when the district is notified or learns of an expanded use through an existing connection. As the resolution reflects, “The Board retains sole discretion concerning amortization of fees for any customer and the method for calculating fees on any connection application form submitted.”

As a special taxing district, PAWSD is responsible for ensuring that water supplies and wastewater treatment services are adequate to meet current demands, and those of new or expanded developments.

Therefore, the district board has said it will continually reevaluate growth projections, and will only build what’s affordable, when necessary. The alternative, members say, is to eventually face mandatory water restrictions, while becoming increasingly susceptible to prolonged drought.

chuck@pagosasun.com