By Derek Kutzer
Staff Writer
At the Oct. 21 Pagosa Springs Sanitation General Improvement District (PSSGID) meeting, Public Works Director Karl Johnson gave an update on future costs for the town’s sewer system rehabilitation project and its future needs.
The new numbers are based on updates to a rate study conducted by Roaring Fork Engineering, which completed a holistic system analysis and provided a rate study addressing the most urgent system rehabilitation needs.
The new numbers appeared startling to some PSSGID’s board members, who also sit as the Pagosa Springs Town Council, with member Leonard Martinez expressing that the new numbers seem “unreachable” for the town.
Town Manager David Harris said, “We knew this would be a tough pill to swallow,” but that it was time to start “righting the ship from past decisions.”
According to an agenda document on the matter, “There are a few key differences in why the rates are now much more than what we had laid out in 2023.”
At the meeting, Johnson explained that the original study did not include lift station overflow vaults, Category 3 pipeline projects over the next 30 years and the full cost of the town going in alone on a new downtown wastewater treatment facility.
Funding these needs would go on top of Roaring Fork’s original assessment that included category 4 and 5 collection pipe replacement projects, a new 1st Street lift station, old lagoon cleanup and a pipeline reversal project.
The initial assessment assumed that the PSSGID would continue in its agreement with the Pagosa Area Water and Sanitation District (PAWSD).
Under the current agreement, the PSSGID conveys its wastewater about 7 miles uphill to PAWSD’s Vista wastewater treatment plant through a series of pump and lift stations.
Also, under this agreement, the PSSGID is responsible for 25 percent of any upgrade costs to the Vista plant, which is currently in need of being upgraded to meet state of Colorado environmental regulations.
The original study assumed that if a new treatment plant was built that this same 25/75 percent split between PSSGID and PAWSD would continue, meaning the town would be responsible for an estimated $40 million for a new plant.
However, the updated study assumes that the town’s PSSGID would go in alone, raising the costs for the plant considerably.
The updated study recommends that the town go after bonds to pay for the sewer rehabilitation project.
It also states, “Assuming that all identified projects will be self-funded by the District through a combination of debt service and available reserves, significant rate adjustments will also be required over the next several years to maintain financial stability and meet debt coverage requirements.”
It adds, “To fund the projected debt service payments, customer rates will need to increase significantly over the next several years.”
Currently, the sewer rate for PSSGID customers stands at $71.16 per month, but the study states that this will need to rise to $96.07 per month next year and to $313.04 per month by 2031 for the PSSGID to stay afloat and pay for its debt service.
Mayor Shari Pierce expressed dismay at the numbers, saying that “a lot of customers are really going to struggle” with these increased rates.
Martinez said, “My goodness. It seems to me that those numbers are likely the death of a community. They are really, really unreachable” for most people.
When asked about grant opportunities, Johnson explained that “unfortunately, right now, at the federal level, funding is few and far between.”
The Town of Pagosa Springs has a measure on the November ballot, ballot measure 2A, which proposes to raise the sales tax rate by 1 percent within town limits to fund critical sewer repairs.
It was indicated that, should the measure pass, it’s less likely that the PSSGID would need to raise sewer rates.
If 2A does not pass, Johnson noted that the town would need to be careful to do any rate increases “in steps” to not shock customers.
He added that “if 2A does not pass, we are still gonna have to, at some point, make the decision of when do we make that decision to continue conveying uphill, while also saving money to build our own treatment plant,” which would allow the town to avoid sending the sewage to the Vista plant.
“It was my understanding that when we stop sending them [PAWSD] flow, then we would not be obligated for the 25 percent” to PAWSD for the Vista upgrades, Johnson noted.
Pierce said, “We hired these professionals to help us figure out what we have to do, so I’m struggling with what we have to do to keep this working and what that’s going to do to our families” in this community.
“It’s our responsibility to make sure it gets better now so it’s not worse for future generations,” she said.
derek@pagosasun.com
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