On March 18, the Pagosa Springs Town Council again considered bringing a town-only sales tax increase in front of the town’s voters to create a revenue stream which would pay for critical repairs and upgrades to the town’s aging wastewater system.
The town’s financial advisor, Joey McLiney, explained at the meeting that the town faces about $40 million worth of projects to fix and upgrade the sewer system.
McLiney added that a half-cent sales tax increase would create enough revenue to pay for the sewer system improvements, but that he wanted the council to consider a bigger increase to pay for other future infrastructure projects once the sewer system project is completed.
He stated that he was leaning toward a 1 percent sales tax increase, which would pay for the sewer system repairs and other projects and would also allow the Pagosa Springs Sanitation General Improvement District (PSSGID) to lower its rates for customers.
“You will have taken care of half of the identified projects in four years with a 1 percent sales tax [increase],” he said.
The ballot language could be specific only to address the sewer system, or it could be “broader” to allow the revenue to be spent on other capital projects, such as streets and vehicle upgrades, he explained, adding that the money the town currently has for capital projects “isn’t very much when you’ve got seven vehicles that need to be replaced.”
“We need to be broader with what we can use this sales tax for,” he said, adding that a 1 percent increase to the sales tax would also allow the PSSGID to “comfortably” lower its rates.
Town Manager David Harris chimed in, saying that the town’s general and capital improvement funds don’t allow for “much wiggle room for major projects.”
Harris noted that broadening the ballot language could help pay for things like vehicle replacement, completion of the Town-to-Lakes Trail and “other projects that are out there that we may want to consider” adding to the ballot language.
However, McLiney suggested that broadening the ballot language to allow for other projects beyond the sewer system could “muddy the water,” making it more complicated to gain voter approval, but he still tended to favor the 1 percent increase with the broader language.
An increase of 1 percent would “fix the sewer problem pretty darn quickly,” and would create “a pretty large pool [of money] to do almost anything you want, in terms of sewer,” including building a new waste treatment facility, he said.
The town currently uses a series of lift stations to transport its wastewater 7 miles to the Vista wastewater treatment plant, which is owned and operated by the Pagosa Area Water and Sanitation District (PAWSD).
As per an agreement with PAWSD, the town is responsible for 25 percent of any required upgrade costs to the Vista plant.
The plant currently faces required upgrades to meet state Regulation 85, having to do with phosphorus and nitrogen output, with the town’s cost estimated to be around $2.5 million.
Harris explained that the revenue stream created by the sales tax option would be paid by a mixture of town and county residents, as well as visitors.
“If you think about a shopper at any one of our stores, we have in-town residents, we have outside-of-town residents, and we have tourists who are paying that tax as well,” he said. “We have people who come to town to go to school, to go to church, to shop, they’re utilizing our facilities directly, so it’s a way to help spread the cost and the cost burden.”
Mayor Shari Pierce suggested that the council’s decision on this would be “a legacy decision,” adding, “We need to recognize the importance of repairing our system and also maintaining it in the future.”
She added that it is a “very distinct possibility” that the town would need to eventually build its own treatment plant in town.
“We have a lot of people who are very dependent upon the sewer system ... so we need to make sure that our decision that we are making is an appropriate amount to fund what’s necessary, but not more than we feel like can actually get passed in an election,” she said.
She noted that she does not know any other way that the town “could fund these necessary repairs,” adding, “This is not just something we want; it’s necessary.”
McLiney explained that adding a “sunset” to the ballot language would make it easier to pass, but suggested a longer sunset of perhaps 20 years, because “projects don’t ever go away.”
Pierce noted that the council had a lot on its plate to find consensus on the details of the sales tax increase proposal.
The council needed to decide on the amount of the increase, whether to include language that will allow the money to fund projects beyond sewer repairs, whether to include a sunset clause and how soon to bring the issue before the town’s voters, she added.
Council member Brooks Lindner expressed that if the council decides to bring the issue before the voters in the November 2025 election, it should stay focused specifically on the sewer system and only go for the half-cent increase, rather than the 1 percent increase.
He worried that November 2025 is “too soon” to run a successful campaign.
McLiney noted that the council would have until July to get it placed on the ballot and that this would give the council “enough time” to run a successful campaign, “if we have a very defined message.”
He added that he “would happily” push it back to either the November or April 2026 election if that’s what the council decided, but said that November 2025 “is doable.”
Lindner expressed that he was concerned about the council “talking about putting it on the ballot before we even know what the message is … and if we’re trying to decide this bigger issue of whether to put other things in the ballot language, which, to me, is a huge red flag.”
He added, “As soon as you start adding things to the ballot language, it just gets very complicated in terms of how people perceive that.”
He reiterated that this coming November is “way too soon.”
He stressed the importance of going through a “community engagement process,” and that the ballot language should reflect this community input.
McLiney reassured the council that he has 35 years of experience running similar campaigns, and that he thinks this issue won’t require “high-priced campaign groups” and polling firms to get over the finish line.
He added that if the council decided to focus on “the sewer project only, and include a $10 rate decrease, I could pass that tomorrow. That one is a layup.”
But, he expressed agreement that “when we start adding projects to it, it becomes more difficult.”
Lindner said he could support “adding more projects” if the election is “pushed out” further into the future.
“Adding more to it, and trying to go in November is not a good idea. And, either way, we need to start the community process,” he said.
Council member Leonard Martinez noted that he was frustrated when he first joined the council, because even though it made the sewer system its “No. 1 priority for the last five years, there were no resources put up for that … and this was a serious flaw.”
He explained that he has heard feedback from town residents who showed support for the sales tax increase, possibly even more than the half-cent one originally proposed.
He said this came from “a small sample” of people, but that “they see the benefit of this process we’re going through right now and funding this thing.”
He urged the council “to go faster,” saying that the November 2025 election should be the council’s “highest priority. We should get after it. We’ve been saying this for too long. We should do it.”
However, he expressed that he understood that “going for more than half a cent” and adding other projects to the list would add “complexity” to passing the measure, but that he thought this could be explained with the “positive message” of reducing rates for customers.
“This is so foundational to us. If this doesn’t work, we don’t exist, and so, to me, that’s how important this is. We have to get this right. November 2025 — let’s go for it,” he said.
Council member Gary Williams added that “this seems different” than the typical “bond issue,” in that “we’re not just asking for an increase in tax. We’re basically saying we either need to double your rates or we can share this cost by doing the sales tax.”
He suggested that the council should “yield to the professionals,” such as McLiney and Harris, to guide it through the election process, saying that there’s a “downside to waiting too long” for an election, “because you could get opposition from outside the town … adjusting the atmosphere.”
He added that he was in favor of going for it this November.
Pierce also said that she would “rather do it sooner than later,” but suggested that the council should not “muddy the water” with additional projects beyond the sewer system if it chose to go forth with a November 2025 sales tax election.
Lindner said that he “could get behind” the November 2025 election idea if the language stays focused on the sewer system only.
With this direction, Harris stated that he would begin putting together an “action plan,” which would include “focus groups, community meetings to explain what it is that we are doing and why we are doing it, and obviously we’ll have the council’s participation in that leading up to the fall election.”
Martinez expressed that he wants to make sure that reducing rates remains part of the conversation going forward, with McLiney saying that he wants language about reducing rates on the ballot.
“That is what will win the election,” McLiney said.
derek@pagosasun.com
