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Impact fee analysis elicits concerns

Many months after its expected arrival, an analysis of impact fees has been delivered to the participating public entities and districts — but not without contention.

Issues regarding the report’s numbers arose earlier this week with two of the districts. Furthermore, those districts took issue with the delay in the distribution of the document.

At Monday’s board meeting, the San Juan Water Conservancy District (SJWCD) board voted unanimously to send letters to the Town of Pagosa Springs, the Archuleta County Board of County Commissioners (BoCC), the Department of Local Affairs (DOLA) and Economic Planning Systems (EPS), stating the board’s displeasure with the resulting final analysis.

On Tuesday night, the board of the Pagosa Area Water and Sanitation District (PAWSD) passed a resolution to also send letters of protest to the same entities.

The impact fee analysis is a project that has been almost two years in the making. In midsummer 2008, representatives from the town, the BoCC, Archuleta School District 50 Joint, PAWSD, the Pagosa Fire Protection District (PFPD), SJWCD, and the Upper San Juan Health Service District (USJHSD) met to discuss the need for finding a “rational nexus” regarding impact fees — charging an appropriate amount in impact fees for the benefits derived from those fees.

Meeting several times in 2008 and well into the next year, the various entities finally agreed in early 2009 to an Intergovernmental Agreement (IGA) to pay consultants just under $40,000 for the impact fee study, with DOLA offering a 50-percent match in funding. By that time, PAWSD and USJHSD had opted out of financial participation in the project.

On the recommendation of Archuleta County Administrator Greg Schulte and then interim Pagosa Springs Town Manager Tamra Allen, the group decided to retain Economic Planning Systems (EPS) as consultants for the study, due to prior history with EPS. In 2006, EPS conducted a similar study for the town and, Allen and Schulte argued, the consultants possessed knowledge of the area and would not be working with a blank slate. Although PFPD, PAWSD and SJWCD urged the group to put the project up for bid (with PAWSD and SJWCD stating misgivings regarding data in the 2006 report), it was decided to employ EPS again for the new study.

Missing an initial fall 2009 target date for completing the study, EPS delivered preliminary data in mid-December, soliciting input from the various participating entities.

On Jan. 20 of this year, PAWSD and SJWCD sent letters to Schulte and EPS representative Andy Knudsen, disputing data included in the preliminary report. For instance, the letter stated that discrepancies in the EPS analysis of water metering (3/4-inch metering system instead of the 5/8-inch metering system used by PAWSD), the result was large differences in calculations of Equivalent Units (EU).

In the preliminary report, the EPS metering calculation resulted in fees based on 1.5 EUs versus the single EU used by PAWSD in figuring total water fees. Thus, while PAWSD maintained that a total water fee based on a single EU would be $10,426, EPS reported $15,064 for a total water fee for 1.5 EUs.

Furthermore, the preliminary EPS report listed the total PAWSD sewer development fee as $6,773 instead of the $4,252 PAWSD claimed in the letter. In fact, the letters identified numerous issues with data and statements used in the preliminary EPS document, including no differentiation between the Pagosa Springs Sanitation General Improvement District and PAWSD (neither the draft nor final report mentions PSSGID), misconceptions regarding a proposed Dry Gulch reservoir, and little distinction made between the roles of SJWCD and PAWSD — among several other problems alleged by the two boards.

At Monday’s SJWCD meeting, board chair John Porter said, “There were a number of lines we thought were incorrect ... we pointed that out to EPS and it doesn’t look like anything got changed.”

“It’s almost as if they didn’t receive the letter,” said board member Windsor Chacey.

In fact, Knudsen stated that he had not seen the January letter but doubted that the disputed figures had any significant bearing on the study’s findings. “We’ve given this study a tremendous amount of thought,” Knudsen said on Tuesday, “and we think that the data is, by far, the most accurate available.”

However, SJWCD board member (and PAWSD manager) Carrie Weiss expressed doubts that Knudsen had not seen the letter, due to the fact that the final report did include a few minor changes, changes commensurate with recommendations made in the letter.

Due to the perceived erroneous reporting in the study, Chacey told the board that she felt SJWCD should express its displeasure with the final draft. “I find this document misleading and I have a concern about that,” she said, “because this is, as far my understanding, a reputable group.”

Chacey added, “I think that the head of this company should be notified that we have identified serious problems with this document. It is misinforming the community. They are using inappropriate data.”

The board agreed, adding that one letter should go to the town, county, DOLA and EPS, and, with a unanimous vote, decided to also have the SJWCD attorney draft another letter for EPS.

The following night, the PAWSD board directed Weiss to draft a letter similar to the one considered by the SJWCD board.

Aside from taking issue with the numbers used by EPS, board members of SJWCD and PAWSD also had problems with the delay in receiving the report. Not only had the various entities expected a final report last fall but, when the final report was released late last month, it went directly to the county, where it sat undistributed for almost one week.

In fact, staff at The SUN was made aware of the final report on April 27 and contacted EPS to request a copy. At that time, Knudsen told SUN staff that the report was “a working document” and that Knudsen would need Schulte’s permission to release the document to the press. (According to Colorado Sunshine Laws, a “working document” is exempt from being defined as a public record.)

SUN staff then made several attempts to contact Schulte to request a copy of the study, but those calls were not returned until May 3 — the day the document was also distributed to the various participating entities.

Further confusion arose due to the document’s cover page identifying it as a “Draft Report.” In an e-mail dated May 3, Weiss asked Knudsen and Schulte why the report was identified as a “Draft” when she’d understood the document to be a final report. Knudsen responded minutes later in an e-mail, saying, “Our mistake — we’ll change that.”

Having entered into an IGA for the study, as participants and financial stakeholders, members of the boards from various entities wondered why the report had not been initially distributed to all group members.

Schulte explained that, “The county volunteered to be the administrator and the point of contact. Andy (Knudsen) was just relying on me and the county.”

When asked why almost a week had passed before other group members were given the document, Schulte replied, “I was just late.”

For the moment, only SJWCD and PAWSD have expressed displeasure with the final report. PFPD Chief Ron Thompson said that his board members did not have the report in hand until Tuesday night’s board meeting but said, “Speaking as the chief, I think the dollars are fairly accurate as far as our costs and what we’re proposing.

Likewise, directors of the Archuleta School District 50 Joint board did not receive copies of the report until Tuesday night’s meeting and reserved comment on the study until their June 8 meeting.

Pagosa Springs Town Manager David Mitchem said that members of Town Council had not received their copies until early this week. “We’re still looking at it,” he said. “We haven’t examined it yet.”

However, Schulte said that, as county administrator, he had looked over the document and, when asked if he was happy with the result, replied, “Generally speaking, yes.”

Claiming that he was unaware of problems stated by the SJWCD and PAWSD boards, Schulte said that the group would meet to discuss the final report.

“We have yet to schedule a meeting to sit down with all the stakeholders and, from a collective standpoint, discuss how we move on this.”

With four out of the six participants in the study yet to have commented officially on the study, and a month until several of those boards meet to discuss the report, a stakeholder meeting will most likely not take place until mid-June, at the earliest. However, with two participants already apparently displeased with the study’s content, the eventual stakeholder’s meeting could include an interesting discussion.

jim@pagosasun.com