At a contentious Sept. 11 meeting, the Pagosa Area Water and Sanitation District (PAWSD) Board of Directors approved capital investment fee (CIF) waivers for one affordable housing project and denied them for two others.
The board previously discussed waivers for these projects at its Aug. 14 meeting, where it deadlocked after voting 2-2 on approving waivers for two projects by Habitat for Humanity and local developer and former PAWSD board member Peter Hurley.
Board member Bruce Jones abstained from those votes, citing a lack of understanding of the situation.
The board also delayed consideration of an affordable housing project led by the Pagosa Springs Community Development Corporation (PSCDC) at the meeting.
The board began the September meeting by voting 4-1 to approve CIF fee waivers for three homes that Habitat for Humanity is constructing in the Pagosa Highlands Estates, which will be occupied by local families earning less than 80 percent of the area median income (AMI).
The value of the requested waivers is about $76,000.
PAWSD chairman Gene Tautges provided the lone no vote, citing that he believes that the area needs more apartments, not houses.
He added that he would want future affordable housing projects to be supported in a different way and for that support to involve more engagement from other entities.
Tautges mentioned a tiny home subdivision project that the Archuleta County Board of County Commissioners (BoCC) recently declined to approve and that the Town of Pagosa Springs has not built affordable housing on the land it purchased for the purpose.
Board member Alex Boehmer changed his vote from voting against the waivers in August to supporting it at the September meeting, although he noted that he wants PAWSD to do a new rate study and seek different approaches for potentially supporting affordable housing in the future.
He added that he would not necessarily support granting waivers for Habitat in upcoming years.
However, he commented that he believed from talking to Habitat and other board members that Habitat had legitimate reasons to believe the waivers would be approved and that this was why he was changing his vote.
Jones also voted in support of the waivers, along with board members Bill Hudson and Glenn Walsh, who both voted for the waivers at the last meeting.
The board then moved on to considering the PSCDC project, which involves building five homes in the Chris Mountain Village II subdivision.
The waivers requested by the PSCDC totaled approximately $126,000.
PSCDC Executive Director Emily Lashbrooke spoke to the board, explaining that she provided information the board previously requested in writing, including the AMI of the people aiming to purchase the homes and how much other entities had contributed to the project.
According to the information Lashbrooke provided, the income levels of the homebuyers in a previous phase of the project, which PAWSD provided waivers for in 2024, range between 80 percent and 90 percent AMI.
The information also states that other entities made significant contributions to the project, including $450,000 in committed funds from the Town of Pagosa Springs, $120,000 in engineering relief from La Plata Electric Association, $160,000 in donated services from real estate agents, half-price work from a variety of construction contractors and donated land from Archuleta County.
PAWSD provided $260,000 in fee waivers for the earlier phase of the PSCDC’s affordable housing project in 2024.
Lashbrooke stated that losing the fee waivers would also cause the houses to no longer be affordable under the deed restrictions placed on the properties since they could not be built at less than 120 percent AMI and would potentially compromise a Colorado Department of Local Affairs (DOLA) grant the PSCDC received to build infrastructure in the area, as well as Proposition 123 affordable housing funding that the organization received to build the homes.
She noted that the PSCDC likely could not build the homes if it does not receive waivers since that would violate the deed restrictions, and failing to build housing would violate the terms of its grants.
“The [PSCDC] has been put in a very bad position here, and I would just ask for your consideration,” Lashbrooke said.
Boehmer questioned if the PSCDC was violating the terms of its agreement with PAWSD on the previous waivers since, according to PAWSD’s minutes from 2024, PAWSD agreed that eight of the homes it provided waivers for must be sold below to people below 80 percent AMI and two to people between 80 percent and 100 percent AMI.
Lashbrooke denied that this had been the agreement and stated that the PSCDC would not agree to the terms that Boehmer claimed had been agreed upon since this would endanger Habitat for Humanity’s work.
Instead, she stated that she had agreed to eight homes in the “80 percent AMI” and two between 80 percent and 100 percent AMI.
Boehmer countered that PAWSD had approved minutes that indicated a different agreement.
Walsh stated that he had been at the meeting where the waivers were approved and he had believed that the eight units would be 80 percent AMI or below, although he is pleased with the AMI levels that the PSCDC is currently reaching.
Lashbrooke apologized for the misunderstanding.
Boehmer commented that he was not trying to be confrontational and he is pleased with the PSCDC’s previous work.
Tautges commented that he does not believe that providing affordable housing waivers is in the district’s mission and that there are “other players out there who maybe aren’t playing as much as they could.”
He commented that PAWSD faces significant costs from regulatorily required upgrades and high water loss levels, and that waiving fees would not be conducive to addressing these issues.
Archuleta County Commissioner Warren Brown then spoke, highlighting that the county donated land to support the Rose Mountains Townhomes affordable housing project, as well as donating funds to support maintenance on other rental affordable housing projects, donating 66 properties to various entities for affordable housing, providing grant matching funds for the PSCDC’s affordable housing projects, and waiving fees.
He stated that these actions amount to almost $5 million in value contributed by Archuleta County to affordable housing development in the community.
“These projects have started because of the county, arguably,” Brown said.
He added that Tautges was a recipient of a similar type of housing in the past and might not live in the community now without such assistance.
He noted that the infrastructure improvements in the Chris Mountain Village II subdivision might lead to approximately $5 million in income for PAWSD if the area is fully developed.
Brown commented that PAWSD’s mission statement is to ensure that local residents can rely on water and wastewater services now and in the future, and suggested that this mission requires investment in people and potential employees since those employees ensure the district continues to function.
“This is about people, not about homes,” Brown said.
He concluded that contributions by all local entities were crucial in moving the project forward and in receiving the grant funding it did.
Tautges replied to Brown by saying he appreciated his comments and stating that Brown was incorrect and that he would still be in the community if he had not received a loan to help him purchase a home.
Tautges commented that PAWSD was the first local district to contribute to support affordable housing and suggested that any money PAWSD is forgiving hinders its efforts to address its infrastructure and water loss issues.
He also suggested that contributions by other entities supporting affordable housing may be insufficient and that other organizations may not be contributing to the effort.
Pagosa Springs Community Development Director James Dickhoff pointed out that the community is short approximately 350 affordable housing units currently, according to a recent housing needs assessment.
He requested that PAWSD help inform the town about organizations that could contribute to affordable housing since it is deeply connected to promoting affordable housing and all of its partners are contributing to the effort.
He noted that building affordable housing is increasingly difficult in the community.
Tautges commented that the people he talks to in the community are broadly not in favor of the fee waivers.
He also suggested that meeting the affordable housing shortfall is unattainable and the community needs to “plan for the future.”
Tautges questioned the claim that the Chris Mountain Village II infrastructure improvements would bring in $5 million in income for PAWSD, noting that subdivisions are often built out slowly and that income may be decades in the future.
Hudson moved to offer a 75 percent waiver for the CIFs for the PSCDC project, which died for lack of a second, before Walsh moved to grant a full waiver, which Hudson seconded.
The board then discussed the motion, including discussing if a new rate study should be tied to the waivers.
Jones commented on the waivers, noting that he personally supports the affordable housing projects, but has significant concerns about PAWSD’s infrastructure issues and that the people who voted him on the board want PAWSD to “get its house in order.”
The board then debated if the costs of the waivers are actual costs and if the projects would occur without the waivers, with Walsh and Hudson commenting that these houses would not be built without PAWSD’s waivers and thus would not generate income for PAWSD in either case.
The board then voted 3-2 to deny the request for full fee waivers, with Tautges, Boehmer and Jones voting against, and Hudson and Walsh voting in support.
“It’s all been said, we have to work together. I guess we have to work harder,” Tautges said.
Hudson moved to offer a 50 percent fee waiver for the PSCDC and that PAWSD do a rate study to determine the best way to support affordable housing in the community without negatively impacting PAWSD customers.
This motion also failed 3-2, with Tautges, Jones and Boehmer opposed and Hudson and Walsh in support.
Those who attended the meeting to support Habitat for Humanity or the PSCDC then largely departed from the meeting.
The board then considered a fee request from Peter Hurley for a waiver of approximately $10,000 in water CIFs for his previously constructed 10-bedroom affordable housing project.
Hurley commented on the difficulty of building affordable housing projects as a private developer without grant support and land donations.
He commented that his personal opinion on the issue is similar to Tautges, but that PAWSD had collected the funds and he was now requesting them.
Hudson moved to reimburse Hurley for the CIFs, which Walsh seconded.
Tautges commented that Hurley’s project had apparently “penciled out” without the waivers and that he had an “issue” with Hurley coming back later to ask for waivers.
Jones commented on PAWSD’s issues with transparency surrounding the affordable housing fees, a topic which he noted he intentionally did not bring up “when the room was full.”
He questioned how the various theories board members had advanced about the actual cost of waivers impacted transparency about what costs the district is incurring.
The board discussed the history of its affordable housing waivers and surcharges, with Walsh suggesting that the district is being highly transparent and that the questions about transparency were “really irking me.”
Walsh added that he felt waivers should be granted to projects that will not happen without waivers.
Jones noted that Walsh took this stance while seconding a motion to give Hurley a waiver despite Hurley’s project happening without waivers.
Walsh replied that he seconded the motion because he wanted to discuss it, but he had not voted yet and would not vote for waivers for Hurley’s project.
Jones stated that he was not trying to call anyone a liar.
Hudson noted that the community is trying to work together to build affordable housing and that PAWSD rejecting projects like the PSCDC’s will also stifle other affordable housing projects that might not be proposed now.
“I think it’s insane to tell the community that we’re not going to support affordable housing,” Hudson said.
Boehmer and Hudson then argued about if PAWSD rejecting the PSCDC would discourage other projects from asking PAWSD for a waiver.
Boehmer suggested that the projects being proposed by the PSCDC and other entities would not meaningfully address the affordable housing problem due to how large the issue is.
Walsh questioned why PAWSD would reject projects that are incrementally adding affordable housing for not fixing the entire issue, comparing this to PAWSD not fixing leaky pipes since one pipe will not solve its water loss problems.
Walsh also commented that Hurley’s project was built before PAWSD raised its CIFs and that a project like that would not occur at the current rates, especially if it also had to pay PAWSD’s wastewater CIFs.
He added that affordable housing projects are more likely to occur within the Town of Pagosa Springs boundaries since the Pagosa Springs Sanitation General Improvement District (PSSGID), whose board is composed of the Pagosa Springs Town Council, is more supportive of affordable housing and will offer wastewater CIF waivers.
Jones commented that, in a private conversation before the meeting, Hudson had indicated that he supported fee waivers for projects below 80 percent AMI, but that he had changed his position and supported the PSCDC project, which is above 80 percent AMI.
“I’m really confused as the new guy why, when we have personal discussions, it seems like we’re going one way, but then, when there’s a room full of people, how we take a completely different perspective and then try to throw each other under the bus in front of those other people,” Jones said.
He added that, if the board cannot have candid private discussions about the positions of its members, it will lead to “a lot of disappointing things” and create the perception that the board is divided.
He commented that the board’s positions are often inconsistent and lacking in transparency, which he has a “big problem” with.
Following an exchange between Tautges and Hudson about Hudson not being given time to respond and Tautges questioning why projects are not penciling out now when they have in the past, Hudson replied to Jones that his comments that only supporting housing below 80 percent was his desire for board policy going forward, but that the board had not created that policy yet and he currently supports the PSCDC project.
Walsh commented on the differences between market and affordable housing, and clarified that PAWSD’s policy allows the board to choose to grant CIF waivers to housing between 80 percent and 120 percent AMI, which he stated is a necessary clarification since other board members were insinuating that PAWSD is violating its own policies.
He added that he believes PAWSD should eliminate the policy and move to deciding waivers on board discretion since there is no point in a policy if it does not provide predictability, which the current policy is not doing.
Tautges restated his views that other entities are not sufficiently contributing to affordable housing, stating that those asking for waivers should be looking for money to pay PAWSD’s fees elsewhere.
He added that the Town of Pagosa Springs has not provided lists of financial contributions for affordable housing projects like the PSCDC did.
Dickhoff stated that the town could generate such a list, but that the town provides a variety of support to such projects.
Jones commented that many of the financial contributions that the town or county provide, like donating land that it collects due to tax liens, is not the same as PAWSD’s contributions.
He added that PAWSD needs to determine what it has available to give to affordable housing instead of comparing its contributions to other entities since its current accounting is very “whimsical” compared to other entities.
Walsh responded to Jones’ “insinuations about looseness, lack of transparency” by stating, “quite frankly, I think it’s utter, complete nonsense.”
He added that PAWSD has been highly transparent about its affordable housing support.
Jones stated that he has never said that PAWSD is not transparent, but that people do not read its budgets and other documentation and that he joined the board to prove other people wrong about PAWSD lacking transparency.
He stated that he was asking about what PAWSD’s position on granting waivers is or where it would stop since the board currently cannot explain its decisions.
“The ideal that lack of transparency exists from the public eye is a very real concern,” Jones said. “Is it real on paper? Heck no.”
Tautges then brought the discussion to an end, commenting that the board members had all made their points.
“Everybody’s gotta work harder, gotta go out, find other entities, whoever they are,” he said. “Everybody said we’ve done the best we can; we’ve gotta work harder.”
Hurley asked if the board’s position is that affordable housing pays the affordable housing surcharge, which Walsh and Tautges confirmed.
Hurley noted that the theory of this is that those who get waivers would pay back into the waiver funds going forward.
He questioned what happens if an affordable housing project does not receive a waiver.
Tautges replied that the project must still pay the surcharge.
“So, basically, I’ve gotta go back to my 12 units, my 20-plus tenants and say, ‘Yeah, you’re in affordable housing, but you’ve gotta keep paying the affordable housing fee even though you got no benefit from it.’ Is that what the board’s position is?” Hurley said.
Tautges said that this is correct and questioned why this should not be true, noting that these projects are part of the “big family” that the board had been discussing.
“I don’t feel a part of the family yet,” Hurley said. “It depends on the vote.”
The board then voted 4-1 to reject granting waivers for Hurley’s project, with Hudson casting the sole vote in support.
Commissioner
discussion
At the Sept. 16 BoCC meeting, the board discussed PAWSD’s decisions, with Commissioner Veronica Medina commenting that she was pleased that PAWSD had voted to grant waivers to Habitat for Humanity, but expressing concern about how the denial of waivers will impact the PSCDC project and what PAWSD’s position may mean for affordable housing in the county in the future.
Brown, who serves as the BoCC representative on the PSCDC board, noted that those involved in the project are in a “precarious place” due to already having capital outlay expended.
He added the PSCDC is looking at options with the project, including the ramifications of ending the project.
He added that the issue may not be a “dead conversation” and that he hoped that the PSCDC might reach a “workable solution” and allow the project to move forward.
“Right now it sounds like we’re kind of just in limbo with the potential of opening this discussion up again and, if not, what is that going to mean,” Brown said.
He added that the project would take “a lot more work” now and that it “doesn’t bode well” that PAWSD is declining to support the project.
Medina commented that the state of Colorado recently clawed back significant amounts of Proposition 123 funding and that questions exist about if counties and municipalities involved in Proposition 123 projects may have more leeway in meeting their requirements due to changes in the program.
She added that the PSCDC has likely met the requirements of its DOLA infrastructure grant, reducing the chances that the county will be “on the hook” for paying back this grant due to not meeting its requirements.
Medina stated that she is concerned about affordable housing in the community and the lack of support from PAWSD.
She added that, contrary to some comments by PAWSD board members, the county does have a large number of partners for its affordable housing efforts.
Medina commented that she was hopeful that PAWSD would continue to discuss the issue and potentially find a solution to granting waivers.
“I am hopeful that PAWSD will continue being a great community partner and see what, if anything, they can do to continue in this effort moving forward,” Medina said.
josh@pagosasun.com
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