The Town of Pagosa Springs looks to be going to the November ballot to ask the town’s voters for a 1 percent town-only sales tax to address issues with its “failing” sewer system.
On Aug. 5, the Pagosa Springs Town Council approved the first reading an ordinance calling for a coordinated election and setting the ballot language.
An agenda document on the matter states, “The sewer system is failing and needs funding for repairs, wastewater treatment plant, and possible reuse system.”
The document further states, “A sales tax is the most efficient way to obtain the funding needed.”
Town staff has estimated it would take $80 million to $100 million to fully address the chronic issues with the sewer system.
“A 1% sales tax would generate an estimated $3.6 million in the first year and it will take an estimated 25 years to generate all the funds necessary,” the document states.
The ordinance, which will need to pass through a second reading of the council, would repeal the current sales tax and then re-adopt it to enact the new sales tax rate.
The decision comes after the town held a series of listening sessions on the issue, determining that the sales tax option — as opposed to raising fees for wastewater customers or raising property taxes — is the best option to pay for the critical system repairs.
Town Manager David Harris has stated that a public survey, and from “non-scientific” surveys of public sentiment at town-hosted listening sessions, show that the sales tax option is the most popular option among the public.
At the Aug. 5 meeting, Harris explained that he has also met with various groups throughout the county to “solicit their opinions of ‘what should we do?’ regarding our sewer system.”
He noted that the main public concern that he has heard “is the fact that we pump our affluent uphill.”
The current sewer system, operated by the Pagosa Springs Sanitation General Improvement District (PSSGID), conveys the town’s wastewater, through a series of pump and lift stations, 7 miles uphill to the Vista Wastewater Treatment Plant, owned and operated by Pagosa Area Water and Sanitation District (PAWSD).
According to the town’s website, challenges include an aging pipe system, averaging about 50 years of age, with about a third of the pipe system either failing or in need of immediate repair, and the continued costs of pump failures and maintenance to keep this system running.
Harris said, “We do about 325,000 gallons of sewage a day and maintain about 17.5 miles of sewer lines in the ground and we pump uphill about 7 and half miles.”
It was noted $15 million would be needed just to address critical upgrades and repairs to the identified category 4 and 5 problems with the current pipe system, reminding the council that the town issued $4.5 million in bonds to partially address these problems and to fund the cleanup of the old lagoon and for the purchasing of equipment to perform “in-house” repairs.
The PSSGID also faces a $2 million price tag for its share of upgrading PAWSD’s Vista plant to bring it into compliance with state regulation 85, as well as $25 million to upgrade the category 3, 2, and 1 aging pipes and up to $7 million for a lift station at 1st Street.
Harris added that if the town were to look at building its own treatment plant downtown, it would cost in the neighborhood of $40 million to $60 million, adding that costs “for infrastructure have gone through the roof, not just for our community, but nationwide.”
He continued, “All in all, we’re looking at $80 [million] to $100 million needed.”
The sales tax option, Harris explained, is the most viable option for funding because it would be generated by both residents and visitors alike “and is more equitable for our residents.”
He noted it would create a dedicated fund that can only be used for sewer infrastructure maintenance, but it would make retail and grocery purchases more expensive, adding that “for a family of four, the price of groceries would go up roughly about $15 per month.”
A non-scientific survey (due to its small sample size) conducted by the town shows that out of the three options presented — a sales tax increase, fee hike or property tax increase — 81 percent of the respondents favored the sales tax increase, he explained.
The town “is kind of the hub of our larger community. People come here definitely to go to school, go to church, to dine, to shop … so, they end up using our facilities, and, ultimately, one of the challenges is that we have to be able to flush our toilets,” he said.
Town Attorney Bob Cole explained that the sales tax ordinance language repeals the existing tax to be replaced with a new sales tax, if the voters approve it on Nov. 4.
Cole added that the ballot language restricts the revenues to be collected for the sole purpose of sewer infrastructure and maintenance.
“The ballot question proposes that the sales tax would begin Jan. 1 of 2026 … and it also proposes that the tax would remain in perpetuity until the town council or town voters initiated a provision to appeal it,” he explained to the council.
When opened to questions, council member Brooks Lindner said that he was “a little surprised” that the ordinance came before council so fast, with council member Leonard Martinez responding that the impression he got from the public listening sessions was that this was an “urgent” issue that people want to get started on.
Harris added that he got the impression that the public wished “we’d have gotten started on this earlier, so that’s kinda where this came about.”
Martinez said that he’s “all in on this” and is “willing, able, and ready to lead the campaign” to pass the measure.
Mayor Shari Pierce said that, in her talks with town residents, “I’ve not had a single one tell me that we should do anything different than this sales tax.”
Pierce explained that the campaign committee would target educating voters about the issue.
Council member Madeline Bergon expressed that she was “glad we are finally taking steps to address these issues and it feels really good to be taking these proactive steps,” with council member Matt DeGuise adding, “We’re beyond the Band-Aid step of this problem.”
Martinez explained the voter rate for town voters is about 500 to 600 people out of a total of 1,500 residents, and that he feels good about the number of people the campaign has “already touched” at the listening sessions and through other messaging means.
When opened to public comment, resident Bill Hudson worried that there was not enough time to get the message out, saying that “the ballot measures that have succeeded in this town have spent six months to a year selling the idea.”
He added that he thought April would be a more favorable election to get it passed.
Lindner expressed that he agreed with waiting until the April election.
“The urgency is meaningless if it doesn’t succeed … When you have more time, you have time to strategize against misinformation and the arguments that will come out against you. You have time to go on the offensive and anticipate what they are gonna say,” he said.
When a motion was made to approve the first reading of the ordinance to set an election and ballot language for the 1 percent town-only sales tax to support the sewer system overhaul, it was passed unanimously.
The council is anticipated to consider the second reading of the ordinance at its Aug. 19 meeting.
derek@pagosasun.com
