On March 4, the Pagosa Springs Town Council approved the first reading of an ordinance dedicating an easement on town-owned property to La Plata Electric Association (LPEA), allowing LPEA to use five acres on the property for a new electrical substation.
The town-owned property is located at 2140 County Road 500 (Trujillo Rd) and contains the former landfill and current Archuleta County recycle and transfer station.
The agreement will have LPEA pay the town $135,000 for the easement and 5 percent annual interest, paid in annual payments of $8,700 for a term of 30 years. LPEA will call it the Trujillo substation.
The town will maintain ownership of the land, and once the term has expired, it will “resort back to its natural state,” states an agenda document.
At the same meeting, the council also considered a companion item, passing the first reading of an ordinance to create a community infrastructure and economic development (CIED) account with the annual funds the town will receive from LPEA’s easement going to support that fund.
Town Manager David Harris explained the town will place the new CIED account “inside the town’s trust fund.”
“The use of these funds,” he said, “would be used to benefit the community, improving the quality of life for residents and businesses through the support of the electric system.”
He mentioned that the funds could be used for “infrastructure improvements, public safety and other public benefits,” and could help “to expand the economy of the town and thereby increase net revenues for the economic benefit of the town.”
He described the annual revenue from LPEA — $8,700 — as only “a drop in the bucket financially, but …in the long term, I think it will set forth a framework by which we can have an economic development fund” to “focus on our infrastructure.”
He added that the town should identify a future revenue stream to help fund the account “in a more robust manner.”
Council member Leonard Martinez suggested the “whole idea of economic development” is important considering the “per capita income” in Pagosa Springs versus the cost of living.
He expressed that this would help the community to “diversify its economy,” saying that he is excited to move forward with the LPEA easement and the economic development fund.
Council member Gary Williams expressed his “appreciation for LPEA for being really cooperative” through the agreement process, saying, “We’re all in this together, and we appreciate what you guys do for us.”
He did, however, urge LPEA to minimize the “visual impact” of its substation and to maintain the natural aesthetics of the area for people driving by the site.
When a motion was made to pass the first reading of the ordinance, authorizing the town to grant the easement to LPEA for the Trujillo substation, it was seconded and passed unanimously by the council.
For the LPEA easement to formally take effect, it will need to also pass a second reading of the ordinance, which will be considered at the council’s March 18 meeting.
LPEA first approached the town in 2024 to utilize the land for a new electrical substation, with the council discussing the topic at four meetings in June, July and December.
The council decided to table the discussion for future consideration at its June 4, 2024, meeting, ultimately deciding to negotiate a lease agreement at its July 25, 2024, meeting.
However, LPEA responded with its preference on using an easement agreement, rather than a lease, but with the same terms that the town offered in its original lease agreement.
“This route also allows for the Town to retain ownership and receive payment for its use,” states an agenda document on the matter.
After the council approved the easement agreement, it then considered the creation of the CIED account to be placed within the town’s trust fund.
An agenda document describes the fund going toward the following uses:
• “To benefit the community and improve the quality of life of residents and/or businesses through the support of electric system and other infrastructure improvements that have a public safety or public welfare benefit.”
• “To expand the economy of the Town and thereby increase net revenues for the economic benefit of the Town.”
• “Any other purpose the Town Council may, in its determination, supports [sic] economic activity or infrastructure improvements in the Town of Pagosa Springs.”
Mayor Shari Pierce explained that she wanted to thank Harris “for bringing this idea” to the council’s plate, adding that “this is one of the big reasons I wanted to hire you.”
Harris noted having the economic development fund set aside could “help us with our infrastructure, with possibly bringing in other industries,” adding that the creation of the account would be “a big step forward” for the town.
When a motion was made to approve the first reading of an ordinance to create a CIED account, it was seconded and passed unanimously by the council.
For the account to officially be created, it will need to also pass through a second reading of the ordinance, which will be considered at the council’s March 18 meeting.
The March 18 meeting is scheduled for 5 p.m. at Town Hall.
derek@pagosasun.com
