It’s budget season for the Pagosa Springs Town Council.
That means, through a series of work sessions and regular public meetings, the council will attempt to have its goals and priorities reflected in the town’s finances for fiscal year 2026.
Last spring, the council conducted a strategic planning retreat where it framed its broad vision for the future and its priorities for the upcoming fiscal year.
Out of that retreat, the council, as a body, stated, “We are an engaged community with access to natural spaces, opportunities for sustainable growth and respect for our heritage.”
The main points from its strategic vision statement included:
• “We have a cultural infrastructure with inviting spaces
• “Our downtown is the center of gravity
• “Residents are involved in the Town’s activities and direction
• “Our growth is planned, sustainable, and beneficial to our residents”
Leading into budget season, the council then updated its goals and objectives for the upcoming fiscal year’s financial budget.
The council decided to break these priorities into “tiers,” with tier 1 being of the highest priority for the budget and tier 3 being the lowest.
The council’s tier 1 priorities for the 2026 budget include the sanitation district; workforce housing; parks and trails maintenance; the geothermal system; and traffic management, parking and road maintenance.
On Sept. 22, at a special budget meeting, Town Manager David Harris presented the first draft of the new budget to the council.
Harris explained that the expected revenues for 2026 stand at $17.4 million and the total expenses for the year are expected to be $22.1 million.
Council member Matt DeGuise asked what the difference in revenues would be if the town-only sales tax increase, to pay for the troubled sewer system, passed in the November election, with Harris pointing out that it would add about $3.6 million to the revenue side.
Harris said, “We’ll put up a ‘what if’ budget in case that’s the scenario,” adding later that the costs for the design phase of a potential new wastewater treatment plant would also be in the “what if” budget.
Resident Bill Hudson stated during public comment that he was concerned that the proposed budget “did not reflect” the council’s tier 1 priority of increasing the workforce housing supply.
At the Sept. 30 meeting, Harris addressed this concern, saying that the proposed budget allocates funds for a multijurisdictional workforce housing coordinator, a housing needs assessment (required by the state), and the town has recently purchased properties intended to be used for workforce housing at 5th and Apache streets and in Aspen Village behind Walmart.
Council member Madeline Bergon added that the town also has policies of doing fee waivers for connecting to the sewer system and for applications and permit costs for workforce housing projects, and that short-term rental fees collected by the town go toward housing.
She added that while these policies are not explicitly stated in the budget, they do play a role in helping workforce housing projects.
Some on the council expressed concerned that workforce housing was explicitly stated as a tier 1 priority by the council, but was not explicitly reflected in the proposed budget.
DeGuise asked, “Did we allocate any funds for workforce housing?”
Harris again reiterated that the budget allocated funds for the housing coordinator, covers some “building costs” for Habitat for Humanity projects, and that the town had purchased properties with the intention to build workforce housing.
Development Director James Dickhoff explained that the town is “starting the process” of devising a “housing action plan” that will include “every single incentive that we can pull together” to support workforce housing projects.
Mayor Shari Pierce then added that Jeff Sams, the multijurisdictional housing coordinator, is still working with Texas-based developer Servitas to find a way to make the Enclave project “pencil.”
In 2022, the town entered into a predevelopment contract with Servitas to build workforce housing on town-owned property, and after several iterations, the project settled on the Enclave site, a three-acre property in Aspen Village south of Walmart.
Servitas proposed to build 70 units on the site, with 12 of those being townhome ownership units and the remainder being multifamily rental units, with the project aiming to provide housing for those earning between 60 percent and 140 percent of the area median income (AMI).
The entire project will average 90 percent AMI for the rental units, but has since stalled.
Both council members Leonard Martinez and Mat deGraaf stated that they would also like to see something more concrete about housing in the budget.
deGraaf expressed that, on the tier 1 issue of the sanitation, that the town did a great job of showing action, both in policy and in the budget, on addressing the problems with the system, but that he would like to see something similar with the workforce housing issue.
Martinez added that it’s hard to “track the impact of a strategic goal” without “the line item” in the budget.
He said that he realized, “We are doing things in policy, like fee waivers, etc., but we don’t have a line item here.”
Other concerns of the council at the meeting included expenditures on the town’s vehicle fleet and the costs to the town associated with the Colorado of Transportation’s (CDOT’s) U.S. 160 reconstruction project that will continue through 2026.
Pierce asked if some of the older, out-of-commission police vehicles could be repaired to extend their “useful life” rather than spending more money to buy new vehicles.
“I’m just making sure we are covering all of our bases and not getting rid of vehicles that could have a useful life left,” she said.
Council member Brooks Lindner asked why the budget shows fewer expenditures for the CDOT project in 2026 than in 2025 since the project’s second half would be happening in 2026.
Harris explained that town staff made their “best guestimate” here, but that it was estimated that the north side of the street, being worked on this year, had more costs associated with it because there are more utilities on that side of the street.
Dickhoff chimed in to say that “it’s more expensive this year, I believe, than next year,” due to the costs of the public utilities on the north side of the street.
The council will again consider the 2026 budget at another work session scheduled for Oct. 7, and then it will go through two public hearings on Oct. 21 and Nov. 6, with the adoption date set for the Nov. 6 meeting.
derek@pagosasun.com
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