On Sept. 15, Pagosa Springs Town Manager David Harris kicked off budget season with the town’s initial budget proposal for 2027.
Harris explained to the Pagosa Springs Town Council that the budget meets the town’s budget goals of being structurally balanced, conservative and responsible, maintaining current service levels, while focusing on town priorities and remaining inline with the town’s financial policies.
The main purpose of the budget, Harris informed the council, is to establish a tax rate and fee schedule, sustain current operations, fund scheduled capital projects, and reflect the town council’s goals and priorities.
The council earlier established its top five priorities, listed as follows:
• Infrastructure/wastewater system.
• Growth of workforce housing.
• Downtown mobility and parking.
•Recreation and community spaces, with emphasis on Reservoir Hill.
• Civic leadership and partnership with the county.
Harris noted that this budget will fully consider the town-only 1 percent sales tax increase, approved by the voters, to help pay for the town’s repair and reconstruction of its wastewater system.
These revenues flow into a Sewer Infrastructure and Facilities Fund, which first came online in 2026.
A budget slide presentation, presented by Harris, shows that the town expects its total revenues for 2027 to stand at $26.5 million.
However, the town’s expenses for the year are budgeted to be over that amount, standing at about $30.5 million, leaving a shortfall of $4,029,453, the presentation states.
Some of the rising expenses stem from expenses in the general fund, which are up by $2.7 million compared to fiscal year 2026, the presentation shows.
The budget will go through a process where it’s reviewed, edited and discussed by the town council in a public forum.
Harris explained that, as scheduled, the council will hold budget workshops on Sept. 21 and 22 at 5 p.m. and will have a public hearing on Oct. 6 at 5 p.m.
If everything goes smoothly, it’s possible that the council could adopt the budget at the Oct. 6 public hearing, he noted, but they could also adopt it at the Oct. 20 public meeting, if need be.
The budget would take effect on Jan. 1, 2027.
After Harris’ budget presentation, the meeting was opened to questions from the council.
Council member Leonard Martinez expressed dismay that there was no mention in the budget of non-tourism-related economic development.
Martinez has stressed in previous meetings that Pagosa Springs should be seeking economic growth beyond the tourism economy.
He noted that he sees something “missing” in the budget.
“In the priority goals and in the council work plan … there is not a single message, anywhere, about a strategic initiative that we talked about … non-tourism-related economic development,” he said.
In addition, he explained that he’d like to see “some of the new housing [that the town purchased] that is coming available in March” to be available to police officers “as part of their salaries.”
He added, “I don’t see those kinds of things reflected here.”
With “tourism being the only thing that’s driving our revenues,” he said, “we are resting on a single point of failure.”
Council member Madeline Bergon took issue with potentially raising the sewer fee in the budget after the council went to the voters to ask for a sales tax increase to pay for the sewer reconstruction.
The budget, as proposed, has an increase from $71.25 per month to $81.50 per month for sewer fees, according to the presentation.
“I feel pretty strongly about not pursuing that hefty of a bump in sanitation monthly charges,” Bergon said. “Especially since it was mentioned in our campaigning for the sales tax increase that we were going to, in fact, lower people’s rates. Raising them by $10 seems atrocious to me.”
Mayor Shari Pierce explained that the council would definitely be having a conversation about this issue during budget deliberations.
Pierce said, “We also have to weigh the other side — the people in the county who are frustrated because, when they purchase in town, their sales tax has gone up.”
She added, “There’s a lot to take into consideration when making this decision.”
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