At a Dec. 20 special meeting, the Pagosa Area Water and Sanitation District (PAWSD) Board of Directors approved the district’s 2025 budget.
This approval follows discussion of the budget at several previous meetings, including a public hearing on the budget on Nov. 21.
At a Dec. 12 board meeting, the board discussed the budget further, with the conversation focusing on if the wastewater rate increases recommended by the district’s 2024 rate study could be reduced from those projected by the study.
Following an extensive discussion where PAWSD Business Manager Aaron Burns and PAWSD board member Glenn Walsh highlighted that transfers of money from the general fund along with changes to how the district is budgeting for future regulatory costs could allow it to only increase wastewater rates by 10 percent in 2025 instead of by the 30 percent recommended in the study, the board agreed to pursue this approach.
The 2025 budget includes $1,345,822 in revenues for the PAWSD general fund, primarily from property taxes, and $1,647,189 in expenditures, a 20 percent increase from 2024.
The budget indicates that legal and professional spending, as well as spending on maintenance and computer support and upgrades, are anticipated to increase in 2025.
The general fund balance at the end of 2025 is projected to be $1,448,928, down 17 percent from the end of 2024.
The PAWSD water enterprise fund is projected to receive $33,450,308 in revenues, including $5,609,336 in service charge revenue, $1 million in capital investment fee (CIF) and raw water acquisition fee revenue, and $25.2 million in loan proceeds, which will be used for the continued construction of the Snowball Water Treatment Plant expansion.
Overall, revenues for the fund are projected to rise 5 percent from 2024.
Expenditures for the fund are budgeted at $35,934,411, an 18 percent increase from 2024.
This total incorporates $28,193,518 in spending on capital projects, including the Snowball Water Treatment Plant.
The project fund balance at the end of 2025 for the water enterprise fund is $6,446,071, down 28 percent from 2024.
The PAWSD water enterprise fund is budgeted to receive $18,061,491 in revenues, including $2,982,227 in service charge revenue, $1.25 million in CIF revenue and $12,389,000 in other revenues, including charges collected from waste haulers and bond proceeds.
These revenues include money from the issuance of enterprise revenue bonds approved by the district at its Oct. 12 meeting for the purpose of funding improvements to the Vista Wastewater Treatment Plant, among other work.
Total expenditures for the fund are budgeted at $18,441,980 in 2025, including $14,107,485 in capital projects. Among these capital projects are regulatorily required upgrades for the Vista Wastewater Treatment Plant.
The end-of-the-year fund balance for the wastewater enterprise fund for 2025 is projected to be $4,058,693, down 9 percent from 2024.
According to the budget, the mill levy for PAWSD District 1 is set at 4.037 mills upon each dollar of property value in the district, while the mill levy for PAWSD District 2 is set at 1.434 mills.
A resolution setting these mill levies was approved at the board’s Dec. 12 meeting.
At the Dec. 20 meeting, Burns explained that he had adjusted the budget to account for a 10 percent increase in wastewater rates and that he had decreased the revenue estimates for water and wastewater CIFs to match what the district experienced in 2024.
He added that he also updated the budget to reflect the district’s plan to transfer $500,000 from the general fund to the wastewater enterprise fund in 2025, similar to a 2024 transfer it approved at its Dec. 12 meeting.
Burns noted that he also added $10,000 to the wastewater enterprise fund budget to account for revisions to the district’s rate study.
Walsh expressed approval for the changes, particularly for the revisions to the CIF revenues to match current market conditions.
Burns commented that the decreases in the wastewater rate and CIF revenues were notable and that the adjustments to the rate study would need to incorporate these changes and diversify the district’s revenues to ensure that PAWSD has sufficient revenues for its planned capital projects.
“We’ve been through one year of the rate study, we’ve gotten what we got, we’ve made some adjustments along the way, but I think next year’s going to require some more adjustments,” Burns said.
Walsh commented that the district has been able to reduce the costs to customers of the required regulatory upgrades to the Vista Wastewater Treatment Plant through discussions with the Colorado Department of Public Health and Environment and discovery of an alternative, less-costly approach to meeting its regulatory obligations.
The board also discussed the district’s affordable housing fee waiver policy and budgeting, although it ultimately did not make any changes to the policy or budget.
Walsh concluded the discussion by commending PAWSD staff for the work on the budget and efforts to reduce the size of the rate increase.
The board then unanimously approved the PAWSD budget for 2025.
josh@pagosasun.com