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Boosting the local economy?
PAWSD says ‘no’ to fee cuts
Monday, November 22, 2010

As one might expect, the air in the room at Tuesday night’s Pagosa Area Water and Sanitation District (PAWSD) Board of Directors meeting hung thick with tension. Among the standing-room-only crowd, several local builders and Realtors joined town and county officials in asking the district to temporarily waive development-related fees in an effort to stimulate the local economy.

Leading the charge, Archuleta County Administrator Greg Schulte approached the board first, suggesting that the community is “at a really unique time.” He explained that the rate of residential and commercial development is at historic lows, with little more than 70 building permits issued last year. He declared that now is the time for action.

Continuing, Schulte referred to a resolution passed July 7, by the Archuleta County Board of County Commissioners (BoCC), which waives 100 percent of county development fees “for any development activity for which application is made on or after July 1, 2009, and for which construction begins on or after July 1, 2009, and is completed in calendar year 2009.”

The resolution also waives 50 percent of the same fees for development activity applications made after July 1, 2009, when construction begins on or after July 1, 2009 and is completed in calendar year 2010.

Further, the county resolution provides for 25-percent sales tax rebates on building materials purchased in Archuleta County, when related construction begins after July 1, 2009, and is completed in 2009 or 2010. Another 25-percent rebate is available to local contractors paying not less than 50 percent of their labor costs to Archuleta County residents, when projects are completed between July 1, 2009 and the end of next year.

While PAWSD board members had received copies of the county resolution prior to the meeting — and all were familiar with its terms — Schulte advised them that the county administration considered it a good way to promote jobs and economic stimulus in the community. He insisted that the resolution would be more effective if “all the entities involved” participated, and asked the board to “join us in reducing fees,” adding that the community would be pleased, as well.

Pagosa Springs Town Manager David Mitchem approached the board next. At first, he acknowledged the district’s “reforms” and its recent “recalibration of fees,” then reiterated Schulte’s request that the district “join us in creating jobs in the community.” He affirmed that the town had also passed a near identical resolution July 9.

At that, director Windsor Chacey expressed concern over what she described as an apparent lack of resolution criteria governing who actually receives rebates, how the amounts are quantified, and how the resident status of contractor employees is verified.

In response, Mitchem said simply, “Trust, but verify. The town and county will do that, we will ask for evidence to verify.”

When Archuleta Economic Development Association (AEDA) member Mike Alley approached the board and explained that the association had formed a committee, which gathered data supporting fee reduction efforts by the town and county, PAWSD board director Harold Slavinski asked, “What is LPEA (La Plata Electric Association) doing to reduce development fees?”

Alley replied, simply saying, “We charge a flat rate, with no deductions in fees.”

Alley also works as a line superintendent for LPEA.

Representing the Pagosa Springs Association of Realtors (PSAAR), association director Jan Santopietro stood and read a PSAAR position statement that amounted to a scathing review of PAWSD policies, fees and the performance of its board of directors.

While failing to mention that well beyond a thousand properties are currently for sale in the local market — none of which are subject to PAWSD development-related fees — Santopietro insisted that, “the rate of decline in the total number of sales in the Pagosa Springs area directly corresponds to the Pagosa Area Water and Sanitation District (PAWSD) and town of Pagosa Springs impact fees.”

She went on to suggest everyone in the community, not just those responsible for new growth, should share infrastructure costs connected to the proposed Dry Gulch Reservoir, “since all benefit or suffer the consequences of development.” She also recommended imposing “a surcharge on all customers’ monthly bills.”

After claiming PAWSD lacked transparency and accusing the district of an inconsistent meeting schedule, Santopietro insisted that minutes from past PAWSD board meetings were difficult to obtain.

In response, though, various PAWSD board members reminded the audience that their meetings are held at the same time of day on the second Tuesday of every month. Meetings are properly noticed three days in advance, and minutes are readily available on the district Web site.

PAWSD directors also mentioned that a 2002 citizen’s advisory committee comprised of area builders, Realtors, government officials, private citizens and water district representatives determined — after a great deal of research — that new growth should pay the bulk of future infrastructure costs resulting from increased demand.

Nevertheless, Santopietro insisted that PAWSD was out of touch and that PSAAR would “support the resignation of the current PAWSD Board of Directors and top management.”

Following additional comments offered by various audience members, PAWSD board president Karen Wessels read a prepared statement of her own. To start, she described a Community Economic Roundtable formed by several community leaders about a year ago, which essentially represented town, county, PAWSD, San Juan Water Conservancy District (SJWCD), fire, school and health service district interests. The purpose of the roundtable was apparently to devise and evaluate ideas that would help mitigate a worsening economic downturn.

Roundtable representatives decided the first step would be to update an Economic Planning Systems (EPS) study done in 2006, which determined necessary area-wide capital projects and how much in impact fees the community could support. While much work went into arranging the update, even to the extent of determining various entity cost shares, the study has not yet been performed. In fact, the SJWCD, an entity having agreed to participate financially, has yet to receive an intergovernmental agreement promised by the county late last year.

As Wessels wondered what became of the study, which received urgent town and county attention some months ago, she posed numerous other questions regarding the likely impacts on citizens outside the building and real estate trades. For instance, she asked how the reduced revenue stream resulting from waived or reduced fees might be made up, what jobs might be lost as capital projects go unfunded, and how other retailers might be impacted.

In conclusion, Wessels described a number of steps PAWSD has taken to help create jobs and reduce fees, not the least of which is obtaining grant funding and low- or no-interest loans to fund many capital improvements, the work of which has employed several local contractors over the years. She added that a more favorable method of calculating EUs (equivalent units) was recently adopted, which is the basis for determining fees.

Wessels finished by encouraging audience members to attend regular PAWSD meetings, special meetings and tours, and visit the district Web site for up-to-date information on its capital improvement plans, fees and other water and wastewater issues. She also recommended contacting staff or board members to discuss concerns.

Once Wessels completed her statement, other board members weighed in, each expressing their concern over the current economic situation, and offering explicit reasoning behind their belief that impact fees are not the sole deterrent to building in Archuleta County. As an example, one board member mentioned that homes and vacant lots outside the PAWSD district aren’t currently selling well, either. Director Steve Hartvigsen added that “we shouldn’t build more homes that will then become vacant.” He also suggested that shifting the burden of future costs onto existing customers was unfair.

Following board comments, the board voted unanimously to preserve existing PAWSD fees, and encouraged community leaders to find more equitable ways to stimulate the local economy.

chuck@pagosasun.com